When you enter the global headquarters of healthcare giant Johnson & Johnson (J&J) in New Brunswick, New Jersey, you are greeted by a life-size version of the company’s ‘credo’. This credo is the company’s guiding principles, which it uses to frame all of its decision-making.
While this was written in 1943, it is clear today just how closely the company tries to stick to these values.
The first paragraph states: “We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to provide value, reduce our costs and maintain reasonable prices. Customers’ orders must be served promptly and accurately. Our business partners must have an opportunity to make a fair profit.”
With this in mind, particularly the final sentence, J&J’s Medical Devices unit hosted a supplier day. While the procurement team outlined its strategic vision to develop new opportunities and markets, it also emphasised how suppliers would benefit.
The medical devices unit has recently grown considerably. New product innovations within the industry have exploded with the development of medical robots and patient wearables, and demand for such products has increased in countries such as China. J&J Medical Devices wants to be at the centre of this growth opportunity but knows it needs a motivated and engaged supply base to implement the product and process innovations required to achieve that.
Drawing those innovations out of the supply base has not always been easy for J&J Medical Devices, however. The unit has long relied on incumbent suppliers and largely focused on the North American market.
Refocusing suppliers and getting them on board with this new direction was where the supplier day came into play, as a means to kick-start a new growth drive.
In total, 170 suppliers joined J&J in New Brunswick with a simultaneous event in Shanghai, but a further 200 joined through a live feed that allowed them to watch the presentations and ask questions. These were a mix of new and incumbent organisations.
The message from a diverse group of senior J&J leaders – including Ralf Garczorz, J&J’s VP of Medical Device Supply Chain Procurement – was not to focus on what had come before, but to look to the future.
This wholly positive tone resonated well with suppliers Procurement Leaders spoke to on the day. There was genuine excitement about some of the new robotic technologies, fully connected end-to-end surgery processes and implants personalised to individual patients.
That excitement and commitment would not have been possible without the positive message and the team explaining how J&J would also change.
The day began with the team outlining the function’s vision and continued with an exploration of the new processes J&J seeks to implement to drive change.
Also, the team used the supplier day to launch a new bidding platform through which 100% of the company’s addressable spend would run.
Fernando Ragonette, director and program lead of supply chain procurement within J&J’s Medical Devices company, has developed the adoption of this platform and explained to suppliers why the team were launching it and the requirements and opportunities this would entail.
Ragonette was quick to explain that this wasn’t an e-auction platform.
“It is not a price race,” he explained, putting the minds of most suppliers at ease.
Rather, he said, the team had made internal changes to the way they looked at things; in the past, they looked at individual categories, now they would be category-agnostic and focus on products as a whole.
For suppliers, this meant having greater visibility over the whole suite of J&J Medical Devices’ products, bidding for work and proposing new innovations.
All the bids are analysed impartially through a Coupa-powered platform. They incorporate a range of information provided by suppliers, including cost, facility location and the business challenge it solves.
Ragonette and his team outlined the launch details to suppliers and answered numerous questions around payment terms (the same), restrictions on the number of bids (no) and whether there would be someone they could physically contact to talk through any issues (yes).
It was the positive message and the way in which Ragonette outlined the opportunity that seemed to resonate with the attendees. Making suppliers feel enthused and included will be conducive to a mutually beneficial relationship that will ultimately improve the lives of those who need it the most.