johnson & johnson (j&j) & logistics management solutions (lms) health & personal...
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Johnson & Johnson (J&J) & Logistics Management Solutions (LMS)
Health & Personal Care Conference
April 12, 2011
Johnson & Johnson Overview
Founded in 1886 in New Brunswick, NJ
World’s most comprehensive & broadly-based
manufacturer of health care products
Over 110,000 employees
Selling products in over 175 countries
Facilities in over 50 countries
Over 210 decentralized operating companies
Consumer ProductsConsumer Products
GTO Overview
Function like an “Internal 3PL/Shared Service” with responsibilities for Transportation activities across the enterprise
Product PortfolioConsumer ProductsMedical Devices Pharmaceuticals
Scope In / Out / Within North America
Modes of Transportation Air Ocean Truckload LTLIntermodalCold Chain
Global Transportation Organization Mission Statement
GTO Team Structure
J&J – LMS Relationship
Relationship Overview
In 2007 we sought out a partner to:Provide tactical level support in several areas, including:
Freight Payment bill resolutionTrack & Trace
Initial value proposition enabled:Continued GTO growth within J&J with available resources Continued focus on key areas of competency including
Sourcing & Supplier Performance International Trade ComplianceOperations
Relationship with a partner with a demonstrated track record of service and performance in the Transportation space
Growth & Expansion
As value was demonstrated early on additional
opportunities were identified, including:
Project based support work
Trade Customization / Display tactical support
On-site load planning at remote distribution centers
Compliance review / filing
Call Center Operations
Off-hours support for CPFR functions
Integration into the business
On-site account management played a key role in
relationship development
Detailed understanding of J&J business & requirements
Immediate / visible support when needed
Continued discussions on business and any challenges
allows a collaborative problem solving approach
SAP / TMS Upgrades
Freight Payment enhancements
As value was demonstrated marketing became easy, both
within GTO and J&J
Integration into the business
Master Service Agreement (MSA) provides a clear understanding
of rules of engagement as it outlines:
Pricing structure
Supply of services
Confidentiality agreements
Indemnification
Employment practices
Subcontracting
Audit functions
Severability
Insurance
Data Safeguards
Dispute resolution process
Keys to success:
Ensure requirements are clearly documented
Ensure KPI’s are established upfront
Develop a shared understanding of success
Quarterly business reviews enable visibility to total
business relationship and provide an opportunity for
higher level visibility of relationship
Maintain open lines of communication
On-going involvement of leadership from both sides
Keys to success:
Leverage best practices of both organizations:
Training & development
Technology
Market Intelligence
Invest the time in developing the relationship
Ensure roles & responsibilities are clearly understood (co-
employment)
Thank you!
Information-based 3PL
Established in 1996 in St. Louis, MO
21 On Site Command Centers in North America
Transportation Management Services & Software
LMS Company Overview
January of 2007 - GTO RFP for Tactical Logistics Support
TMS SupportExport and Compliance Support Freight Payment Resolution and SupportShipment Tracking & TracingCall Center / Transportation Planning
Provided On and Off Site Personnel based on business need Dedicated Account ManagerInitial team of 5 providing tactical support
Partnership Engagement
Started with tactical non strategic roles.Initial engagement allowed for LMS to learn the complexities of the JJ organization as well as the role of the GTO.Inclusion of Account Manager and team members in business planning meetings allowed LMS and JJ to identify additional opportunities for our partnership.Created a transparent pricing model that eliminated negotiations and allowed for scalability.Developed processes to expedite opportunities in order to react quickly to the dynamic needs of JJ.
Partnership Evolution
Communication is KeyContinual Evaluation
Ongoing Identification of Opportunities to:Lower CostProvide Better ServiceAugment Current Process with TechnologyProvide a platform that allows for easy expansion and contraction based on JJ business partner needsManage to KPI’s and Pay for PerformanceBetter back up Creative Solution Development
Partnership Optimization
Quarterly Business Reviews – CriticalDefinition and agreement on performance metrics – distributed regularly to team and managementValue driven mind set vs. Short term win mind setJointly created goals - short and long termInclusion of 3pl in project planning and business changes (SAP implementations; Upgrades; Acquisition implementations etc) Defined processes to handle new opportunities (SOW) and issue resolutionTrust and transparency in the relationship
Partnership Best Practices
Learn the landscape and adapt to it!Do not under or over estimate your valueQuick fixes do not work – take the time to do it rightBe creative with solutions and processesAlways be flexibleBe open to new and different ways of working together – embrace change!Trust and communicate at all levels
Partnership Lessons
Coming together is a beginning.Keeping together is progress.Working together is success.
- Henry Ford
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