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International Visibility Bringing Actionable Visibility to the J&J Supply Chain

International Visibility Bringing Actionable Visibility to the J&J Supply Chain Health and Personal Care Logistics Conference 10 Jun 09. International Visibility. Agenda. Value and Opportunity Deliverables Project Development & Considerations Key Actions and Steps

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International Visibility Bringing Actionable Visibility to the J&J Supply Chain

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  1. International Visibility Bringing Actionable Visibility to the J&J Supply Chain Health and Personal Care Logistics Conference 10 Jun 09

  2. International Visibility • Agenda • Value and Opportunity • Deliverables • Project Development & Considerations • Key Actions and Steps • JP Morgan Service Overview • Implementation Key Components • Key Lessons Learned

  3. Where is value derived from improved supply chain visibility? • Lower stock-outs • Lower discounting • Lower penalties and expenses Increased Revenue Growth Reduced Inventory Reduced Transportation Expense Reduced Distribution Expense Areas of potential value • Lower safety and cycle stock • Improved demand management • Improved visibility to inbound inventory “Pull vs Push” • Improved load/asset utilization • Improved transit times • Reduced expedited shipments • Improved procurement activities • Labor planning and scheduling • Reduced compliance costs • Reduced customs clearance issues • Improved asset utilization

  4. Supply Chain Visibility Deliverables Actionable Visibility to In-Transit Shipment Management • Where is my shipment • Planning accuracy • In-transit decision opportunities • What is my shipment’s current status • Moving on routing plan • Customs filing • Potential risk

  5. Supply Chain Visibility Deliverables Actionable Visibility to In-Transit Shipment Management • Delay management • Pro-active response • Interested parties kept informed • Decision support • Compliance management • Support to broker partners • Additional layer of monitoring • Oversight and independent reporting on provider performance (4PL)

  6. Supply Chain Visibility Deliverables Actionable Visibility to In-Transit Shipment Management • Data warehousing • Centralization for metric reporting • Routing compliance • Cost analysis

  7. Supply Chain Visibility Project Development and Considerations • Business Requirements • Business needs • System deliverables • Leveragable future state capabilities • Implementation business impacts • Partner Identification/Assessment • Domestic TMS capabilities • Technologies • Knowledge of international transportation • In/out sourcing

  8. Supply Chain Visibility Project Development and Considerations • Sourcing Event • Executive Sponsorship • Communication Plan • Manage expectations • Funding

  9. Supply Chain Visibility Project Development and Considerations • User socialization • Training • Hyper-Care • Feedback with tangible response results • Monitoring • Survey • ACTIVE ENGAGEMENT

  10. 3PL resources actively engage when • Expected status update is not received • Delay notification is received Expected Lane routing transit Segments Day 1 Day 3 Day 4 Day 8 Day 15 Day 17 Day 18 Day 22 Pickup Arrival at port Confirmed on board Arrival at port Customs clearance Depart destination port Delivered Ready to ship International Visibility In-Transit Alert/Exception Reporting and Management

  11. International Visibility Daily Report for Open and Delivered Shipments Critical Data Elements and Associated Event Alerts: Available to ship Booking Planned Pickup Actual Pickup Destination Port Planned Arrival Destination Port Actual Arrival Planned Delivery Actual Delivery

  12. International Visibility Web Portal Entry Point and Available Tools Live Track and Trace Group or individual shipment searches Multiple search criteria Hyper link to individual record data Critical reporting on regulatory holds/ releases

  13. International Visibility J.P. Morgan Service Overview • Overview – JPMorgan delivers a combination of value added services and transaction management with the support of a solid technology infrastructure. • Visibility – Full Track and Trace Visibility • Online access to shipment data • Integrated with J&J Event Management for Event Reporting • Reporting • Complete set of Custom Shipment Metrics • Complete set Vendor Score Card Data including: • Vendor Performance data • Vendor Data Quality Compliance • *Proactive Alerting – Upcoming Service deliverable, available 4th Quarter 2009 • Value Added Services • Broker Referrals • FDA Release Management • Emergency Shipment

  14. International Visibility Implementation – Key Components • Integration • Message Set – Utilization of custom message to ensure full data coverage. Critical to maintain that standard across all partners. • Connectivity – Secure FTP • Partner Selection / Participation • Partner selection for initial implementation is key • Selection needs to ensure critical mass of shipment data to ensure adequate visibility coverage • Partners ability to deliver quality data, ensure proper process and met data requirements are critical to selection process

  15. International Visibility Implementation – Key Components • Data Flow Across partners – Process Coordination • As Goods flow through the supply chain – It’s critical that data and process flow are managed to ensure that each partner in the process has the information necessary to send event updates to your visibility partner • Typical Time line (Vendor on Boarding Process) • Initial Implementation - Is dependent on the number of Partners needed for critical mass and their time lines for integration and Process changes – Expect 4-6 Months at a minimum • Subsequent Partner On-Boarding – Should be possible within 90 days

  16. International Visibility Implementation – Key Lessons Learned • Vendor Selection / Participation • Early identification of key vendors to obtain critical data mass and ability to adapt technology and process to the requirements is key to successful Implementation • Importance of Process flow to Data Quality • It’s critical to emphasis with each vendor the importance of Process with regards to ensuring data quality. • Partners positioned later in the shipment life cycle are often dependent on Data feeds or Physical document flow for the data they have report to their visibility partner. It’s important to understand the data flow from partner to partner to ensure that both technology and process ensure each partner has the required data to report correctly. • Importance of Cleary defined and Steady Visibility Reporting requirements • Data Layouts, Definition and requirements need to be fully documented and Stable to ensure time compliance by all vendors involved. • Control Scope – A large initiative with many vendors and requirements – Important to lock in Scope and standardize very early in the project.

  17. ROI Assessment

  18. Pilot Lane – Cordis El Paso to Amsterdam (Roden) ELP to AMS Lane: April 2008 Through October 2008

  19. Key Milestone Breakdown in the Total Transit Time • 3 Subgroups Tracked: • Frt. Received at Origin to COB • COB to Frt. at Final Destination • Frt. at Final Destination to Customs Released • Several Key Learnings: • Easy to isolate volatile portion • You must understand Alternate Routings • Nothing is ever as simple as it seems • Time Stamp integrity • Process on the ground

  20. Pilot Lane – Cordis El Paso to Amsterdam (Roden) ELP to AMS Lane: April 2008 Through October 2008 ORIGINAL VIEW

  21. Pilot Lane – Cordis El Paso to Amsterdam (Roden) ELP to AMS Lane: October 2008 Nov 2008 VIEW

  22. Change over time Average Time: +.5 Days  in reality it is more accurately stated now Std Deviation: - 0.69 vs. Overall and – 1.03 vs. April start Min – Max Range: Down from 6. 4 days overall and 5.5 April to 1.7 October Of Note: No Milestone Alerts on shipments MTD in November

  23. Reapplied to new lane • ELP to BRU started in Q4 2008 and has grown into a dominate lane for Cordis. • Recreating the same results.

  24. First 2 months performance without changes in the process

  25. Marked improvements since 1/25/09 changes.

  26. Recap of ELP to BRU Lane 2008 (Nov & Dec)Post Jan 25, 2009 Changes # of shipments                       66              18 Avg Shipment Time                       6.38 Days                       4.75 Days Median                                  6.16 Days                       4.52 Days Std Deviation                          2.02 Days                       0.89 Days Minimum Shipment Time           3.03 Days                       3.07 Days Maximum Shipment Time           13.00 Days                      6.14 Days % Within Max time % (6 days)            34.85%                          77.78% • We are working with Cordis to make a few more changes and then regroup to understand possible Inventory Coverage reductions for the increased predictability on the lane based on this project. Cordis will execute and report via their CIP’s • We want to expand with Expeditors where possible and with the GTO based on their ability to include the same control features in the JPMCV project. • We have added Vision Care lanes to the process now and will conduct a review in the next couple of weeks.

  27. International Visibility Questions?

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