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Since its foundation in 1886, Johnson & Johnson has operated according to its belief in a shared responsibility to its customers, employees, stockholders, and the communities it serves. The organization constantly strives to deliver the highest quality products and fulfill customer orders promptly, while reducing costs in order to maintain reasonable prices and support its suppliers’ ability to make a fair profit. This determination to support the various members of its community motivated Johnson & Johnson to pursue an enhanced customer experience.
In order to excel in an extremely competitive market, Johnson & Johnson recognized that it needed to satisfy customer demand quickly and deliver a best-in-class customer experience without exceeding its inventory targets. The organization looked to transform its demand planning function so that it could predict the needs of its customers faster, improve its forecast accuracy, and optimize its external manufacturing operations to maintain the correct level of stock availability. This transformation intended to improve Johnson & Johnson’s forecast accuracy and Unit Fill Rate (UFR), which measures how many orders are filled via the available inventory.
To achieve these objectives, Johnson & Johnson opted for a dual-pronged approach:
Johnson & Johnson engaged Capgemini to establish a partnership based on its experience with global transformation projects and data science expertise. In addition, Capgemini’s “One Team” approach ensured alignment between the two organizations in terms of core values as well as a thorough understanding of the needs and challenges associated with the delivery.
Capgemini and Johnson & Johnson designed and implemented an innovative demand planning solution that features:
This solution provided a larger pool of data to draw from, resulting in a more precise baseline forecast. The team also improved the quality of Johnson & Johnson’s master data, which provided an accurate set of expectations for the organization’s manufacturing and delivery capabilities.
By combining this improved prediction capability with the new processes implemented in the various clusters, the CDP team ensured that Johnson & Johnson benefited from a stronger forecast while also equipping its local teams to better use and build on that prediction through process re-engineering.
Capgemini also worked with Johnson & Johnson to develop a new set of standard operating procedures for external manufacturing, including requirements planning, master data, purchase order management, and collaboration with regional supply planners and external manufacturers. This introduced standardization into Johnson & Johnson’s external manufacturing operations, ensuring the optimal inventory level to satisfy customer demand. Employee churn was managed by creating a comprehensive knowledge repository followed by a simplified process for quicker planner on-boarding and a structured training.
By transforming the external manufacturing processes, Capgemini enabled Johnson & Johnson to gain greater control over its inventory levels. This ensures that the organization can more effectively meet customer demand without exceeding its inventory targets. Johnson & Johnson now enjoys a more effective supply planning process that has resulted in an enhanced UFR performance. All in all, the solution has improved Johnson & Johnson’s demand and manufacturing planning, optimized its inventory, enhanced its visibility, and fueled superior collaboration with its external manufacturers.
Following successful project implementation, Capgemini and Johnson & Johnson set up a process to discuss, evaluate, and roll-out continuous improvement initiatives around centralization and automation of tasks, improved quality of analytics, and productivity improvements. This empowers both organizations to arrange additional governance, improve productivity, and reduce repetitive activities.
By delivering this innovative forecasting solution, Capgemini enabled Johnson & Johnson to achieve the following results:
External manufacturing planning:
Capgemini and Johnson & Johnson delivered a successful transformation project that not only supports Johnson & Johnson’s business interests, but also strengthens the organization’s ability to serve its customers. By achieving a more accurate demand forecast, Johnson & Johnson has improved its UFR, while consistently meeting inventory targets.
Demand planning and external manufacturing planning are both critical to the success of Johnson & Johnson and require a high level of process maturity and collaboration. It was an understanding of the importance of these processes that led Johnson & Johnson to partner with Capgemini in order to transform them.
By combining Johnson & Johnson’s industry knowledge and innovative vision with Capgemini’s substantial expertise and comprehension of the processes, the partnership achieved a level of success that was only possible through a collaborative effort.
Following this project, Johnson & Johnson has once again demonstrated its commitment to supporting its customers through constant innovation.
Capgemini has proven its capacity for innovative demand planning solutions and confirmed itself as a leading partner for future predictive analytics projects.
Through a structured collaboration process, Capgemini has also improved the flow of communication with suppliers, empowering them to support the business more effectively.
The partnership proved to be so effective that Johnson & Johnson has decided to roll out the demand planning solution to other geographies and has added 13 additional suppliers to the external manufacturing planning post go-live.
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