In 2014, with almost half of its employees (more than 50,000) working in supply chain, more than 15,000 customer orders per day and around 350,000 customers globally, Johnson & Johnson committed to build the best end-to-end supply chain in the world . Combining internet of things (IoT) sensors, cloud computing and advanced analytics, J&J has connected the entire supply chain to achieve this challenging goal. “With IoT, we have the opportunity to bring all that data together in one place and then apply some very sophisticated analytics like machine learning and predictive modeling to better understand what is likely to happen to you as a patient”, explains Stuart McGuigan, J&J’s CIO . Regulatory matters have also influenced J&J’s supply chain digitalization efforts. In 2013, Congress passed the Drug Supply Chain Security Act (DSCSA), which requires pharmaceutical companies to implement end-to-end traceability of prescription drugs distributed in the United States by 2023 , fueling the implementation of traceability projects.
Kathryn Wengel, worldwide vice-president of J&J Supply Chain (JJSC), highlights three main areas where digitalization and, specifically, IoT technologies have had an impact on JJSC: End-to-end supply chain customer type technology (traceability, on-shelf availability and real-time data); Core Product Technologies; Operational Technologies (use of IoT in manufacturing plants to make better real-time decisions) .
End-to-end supply chain technologies
JJSC has been on the forefront of developing new technologies to ensure end-to-end product traceability. In October 2014, less than a year after the DSCSA was passed, J&J piloted a project to fully serialize their products and dive into the changes in systems that would be necessary to fully comply with the act . “It is still rare to be able to fully trace every element of a product from origin through to individual patient outcomes via digital health records and real-world evidence” says Wengel, “The rapid advancements in computing, Big Data and technology are enabling rapid innovation […] We’re not just making products anymore. We also make a product’s digital twin. This twin is the basis for how we collaborate across the healthcare supply chain” . IoT has enabled J&J to trace products from their raw material stages all the way to the end-customer. Real-time data provided by IoT sensors and monitors embedded in vaccines, for example, can assure they remain frozen when shipped to sub-Saharan Africa .
Core Product Technologies
J&J is also investing in core product IoT technologies to allow real-time diagnosis and treatments. Research and development of new self-correcting contact lenses and other platforms that provide real-time data on the health of a patient’s eye is one of the areas where J&J is applying IoT to improve patients’ treatments .
Internet of Things has also enabled J&J to change its manufacturing processes. IoT in-line sensor technology changed the way they manufactured Prezista, an HIV medication, and made J&J the first pharmaceutical company to win FDA approval to shift a product from batch to continuous manufacturing. Before the technology was introduced, the drug was produced in batches and production had to be stopped at various steps when samples were sent to a laboratory to be tested. IoT in-line sensors embedded in the equipment have eliminated these steps by performing tests online in real-time. “Our use of IoT-enabled continuous manufacturing opens up a much greater world of flexibility, a dramatic reduction in cycle time, and allows us to use our people resources more efficiently” explains Wengel .
Current Performance and Future Obstacles
On May 2017, Gartner released its annual Top 25 Supply Chain Index, ranking Johnson & Johnson as the 13th best supply chain worldwide, climbing up 8 spots from its 2016 ranking and establishing J&J as the only healthcare supply chain on the list  . However, to become the best supply chain in the world in future years, J&J will have to outperform other giants such as Unilever (1st) and Inditex (3rd). One of the main obstacles to achieve such goal revolves around cybersecurity.
In a recent study conducted by Gartner, 35% of respondents ranked security concerns as one of the greatest barriers to IoT success . This is specifically important in the healthcare landscape, where hacks or security breaches could have significant impact on patients’ lives. Recently, Johnson & Johnson announced a vulnerability in one of their insulin pumps . Using sophisticated equipment and in proximity to the pump, Jay Radcliffe, a cyber security researcher, discovered that a remote hacker could access it and trigger unauthorized insulin injections , which could cause hypoglycemia and, in extreme cases, be life threatening.
Can J&J outperform other customer goods and textile supply chains and become the best supply chain in the world? What about security concerns? Can they overcome this obstacle in the healthcare landscape and provide safe, versatile and connected medical devices?
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