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Johnson & Johnson’s Developing Product Integrity Strategy (November 2010)

At the Product Authentication & Security Summit (PASS) in September, David Howard, Global Director of Product Protection at Johnson & Johnson (JnJ), gave a paper outlining how this large medical and health products multinational had benchmarked best practices for a safe and secure supply chain. This process was part of JnJ's re-appraisal of its approach to product and patient protection, which culminated in the introduction in September of a new internal product integrity structure. Authentication News® talked to David to learn more about the experience and thinking that has led to this point.

First Steps

J&J is organised in to three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics. Within these segments it has numerous product-focused operating companies and  national or regional entities, creating a matrix organisational structure, with corporate-wide functions based primarily at the company's headquarters in New Brunswick, NJ. Sales in 2009 were $62b, split roughly equally between the US and the rest of the world, but this represents a significant shift this century, with domestic sales doubling but overseas sales tripling. It was this rapid growth in non-US activity that was one of the initial drivers to the company becoming active in product protection. As David Howard (DH) put it, 'We learnt we had a counterfeiting problem, but we had no knowledge of what made us vulnerable.'

In 2002 the company therefore established its first anti-counterfeiting council, chaired by DH, then Director of Package Development in the Pharma division. Within 18 months, in response to workload, product protection - or otherwise anti-counterfeiting - became his full-time role. At this time the company was reacting to counterfeits, actual or perceived threats, but it then developed a risk assessment tool specifically to help its individual divisions and companies identify the risk of counterfeit, diversion, tampering or other trademark infringement for each product or family of products. This proved successful in raising awareness of the issues, although there was probably a fair degree of guesswork that went in to the assessments!

By 2005 this risk assessment tool was introduced in to the pharma R&D process, putting it at the centre of product development. One reason for this was that David had become aware of taggants and other methods of in-product marking, so it was important to assess the potential risks to new products and consider the impact of adding taggants to the product. The risk assessment therefore became part of the stage-gate evaluation process of new products.

This approach was deemed to work and in 2006 David moved across to Medical Devices and Diagnostics as Director of Product Protection, to replicate the approach as it had been developed in the Pharma division.

J&J's MD&D segment comprises several product-focused companies, so a new product protection group was established within the division, involving the vice-president of brand protection, and the directors of product protection, supply chain integrity and market monitoring and enforcement. This model in turn was adopted by the Pharma business segment in 2007.

Evolution to Corporate Group

So by 2009 the company had separate product protection groups in two of its business segments, which communicated with each other but which weren't fully integrated. Accordingly, in 2009 Ron Guido, VP of Brand Protection and Supply Chain Integrity, initiated a company-wide review and assessment of this arena. The result was implemented in September, creating a hub and spoke structure that involves each business segment and regional operations, with specialists at the New Brunswick HQ.

The new group brings together the directors of product protection and/or integrity from the three business segments - Consumer, Pharmaceutical and Medical Devices & Diagnostics - with regional directors from China, Asia-Pacific, Latin America and Middle East and West. Central resources are provided by two directors of Product Protection, Pete Kowalchuk for track and trace and David Howard for authentication. With Ron Guido they comprise the core team of three specialists, whose task is to keep the company up to date with the latest developments and to guide its product protection strategy.

As David Howard explained in his paper at PASS, one such central function has been the further development of the risk assessment procedure and the benchmarking of best practices, drawn from within and outside J&J. This project took a year and resulted in a list of ten best practices which are now part of the company's Enterprise Supply Chain Leadership process, and which the new product protection group will initiate as pilot projects for the operating sectors.

Another aspect of the risk assessment review was a questionnaire to each group company to understand its awareness of the issues.  Unsurprisingly (to readers of Authentication News®), the most common answer to the question about the incidence of counterfeiting of product was 'Don't know'. Which, of course, challenges the new resources team to ensure that this changes over time to an answer which is quantitative or qualitative.

From Reactive to Proactive

Guido and Howard characterise this development over eight years as moving from reactive - in 2002 - to proactive. This is summarised in what might be termed the group's mission statement:

Product Protection is a proactive, integrated and multi-layered approach that utilizes both processes and enabling technologies to protect products and packaging while helping to secure the supply chain from illicit diversion and counterfeiting. The objective ... is to ensure the integrity of our products so that customers receive genuine Johnson & Johnson goods.

The reference to 'enabling technologies' shows that J&J view these technologies as core to this strategy. So as part of the core resources, they have also developed an authentication technology assessment tool, and authentication supplier assessment tool and a converter supplier assessment tool. They are also developing an internal brand protection supplier listing.

Talking to Authentication News, David Howard summarised this as the development of a bag of solutions, approved at the centre, which are available to the product or regional companies. The intention is to know which technologies have been deployed somewhere within JnJ, which are 'deployable' and which are, for whatever reason, not suitable. They are aiming for commonality across the JnJ family of products, but with each product-focussed company having the ability to select from this 'bag of solutions' those which are most suitable for its products to combat the risks identified through the risk assessment process.

Contact: David S. Howard, Global Director, Product Protection, Johnson & Johnson, 425 Hoes Lane, Piscataway, NJ 08855, USA; phone +1 732 562-7048