SUBMITTED TO

SUBMITTED BY:

H.S.Bedi NISHA
RANI

ROLL.
NO.19 (A)

REG.N
O. 10904952

SEC.N
O. RR1904
 ACKNOWLEDGEMENT

I am also thankful to my subject teacher Mr.H.S.Bedi sir which has

helped me a lot each and every time when I had some default. Words
are not sufficient to register my sincere to my loving parents for their
deep affection and unabated inspiration that really kept me going.
They were and unending source of strength and perseverance during
the course of the study’s place my thanks to all those who spread their
time and made it convenient for me to complete the research. Last but
not the least, I also wish to red cord my gratitude for any person or
persons my memory has failed to recall, who rendered his/her/their
support and services.

Yours obediently,
NISHA RANI
Roll no. 19(A)
Sec.RR 1904

Johnson and Johnson Introduction

Johnson and Johnson is a diversified health care giant with over 250
operations in sixty countries. The pharmaceutical division makes drugs for
an array of ailments including neurological conditions, blood disorders,
autoimmune diseases, and pain management. Johnson and Johnson has
medical and diagnostic divisions which offer surgical equipment,
monitoring devices, orthopaedic products, and contact lenses. Their
consumer division produces over the counter drugs and products for skin
and hair care, oral care, first aid,and women’s health products.
Johnson and Johnson’s credo is to meet the needs of its customers in a
responsible manner. Every decision they make is guided by the values it
proclaims. Essentially, their credo challenges them to put the needs and
well being of the customers they serve first. This credo was instituted
more than sixty years ago by Robert Wood Johnson, who was chairman
and a member of the company which was originally family owned. Today
it is a publicly traded company with this pact between the consumer and
the company still in place. This

philosophy is a pioneering example of corporate social responsibility as

well as a moral compass and a receipt for success. This formula has led
Johnson & Johnson to be one of a handful of companies that have
flourished through more than a century of change and is a testimony to its
endurance.
As the science of human health and well-being has grown, Johnson and
Johnson has been able to grow along with it. Their belief is that being
broadly based gives them a heads up over other companies. Since they
have 250 operating companies, they feel it gives them a local window into
emerging customer needs, scientific developments, and technologies
throughout the world. This allows them to take the information they learn
and use that information to make new products and Johnson & Johnson (J&J)
was founded 121 years ago based on the need for sterile medical supplies to
treat patient’s wounds. Post-operative mortality rates were a grim 90% and
after attending a seminar on “antisepsis” Robert Wood Johnson, an apothecary,
saw this as an opportunity to start a much needed company. With $100,000 in
capital and the help of his brothers, James and Edward, they established Johnson
& Johnson. Their prospect with J&J was “to manufacture and sell medical,
pharmaceutical, surgical and antiseptic specialties and analgesic goods.”
Johnson & Johnson quickly became a leader in the healthcare field and by 1910
(when Robert died) the company had already introduced revolutionary surgical
dressings, established a bacteriological laboratory and published the book
“Modern Methods of Antiseptic Wound Treatment.” They were able to grow
very quickly as a result of acquiring established companies and introducing new
products. J&J expanded internationally starting with Canada in 1919 and then
Great Britain in 1924.
By 1983, J&J was one of the world’s most successful health care companies with
their product lines consisting of consumer products (baby care, surgical
dressings, first aid, non-prescription drugs), professional products (surgical
dressings, sutures, diagnostic products), pharmaceutical prescriptions and
industrial products (nonwoven fabrics, edible sausage casings). The consumer
products group brought in the largest percentage of sales (43%) while the
industrial products brought in much less (4.1%). J&J’s competitors - Bristol-
Meyers, Procter & Gamble and Kimberly-Clark to name a few, were unable to
keep up with J&J’s continual introduction of new products which allowed J&J to be
In 1982, J&J’s sales totaled $5.8 billion with a net earnings after taxes of $523
million.sometimes create new businesses. Johnson & Johnson, through its
operating companies, is the world's most comprehensive and broadly based
manufacturer of health care products. The company is divided into three
segments: Consumer, Medicines and Nutritional (M&N), and Medical Devices and
Diagnostics (MD&D). Johnson & Johnson is organized on the principles of
decentralized management. The more than 230 Johnson & Johnson operating
companies employ approximately 116,000 men and women in 57 countries and
sell products throughout the world. JJHCS provides account management and
customer support services to key health care customers, including hospital
systems and group purchasing organizations, leading health plans, pharmacy
benefit managers, and government health care institutions. The company also
provides contract management, logistics and supply chain functions for the
major Johnson & Johnson franchises. The MD&D companies of Johnson & Johnson
seek to benefit from utilizing a shared services organization such as JJHCS in
several ways, including optimized customer relationships, flawless execution,
processes that are harmonized with supporting systems, and profitability through
leveraging expertise and resources for critical operations. Therefore, as a shared
service organization, execution of processes to ensure superior internal and
external customer experience is important.

History of company: Johnson & Johnson was founded more than 120
years ago on a revolutionary idea: Doctors and nurses should use sterile
sutures, dressings and bandages to treat peoples’ wounds. Since then,
we’ve brought the world new ideas and products that have transformed
human health and well-being. Every invention, every product, every
breakthrough has been powered by generations of employees who are
inspired to make a difference. In 1889, the Gilmour Brothers, a Montreal
agency, began distributing “our” products and effectively started our
Canadian operation. Rising demand for their high quality consumer
products clearly indicated that a Canadian subsidiary was needed.

In 1919 Montreal became the first subsidiary of the Johnson & Johnson
Family of Companies outside of the United States. It was there that we
first incorporated our company, Johnson & Johnson Inc.

Today, Johnson & Johnson Inc. has it headquarters in Markham, Ontario.

Approximately 400 passionate and dedicated colleagues work together in
our Markham, Montreal and Guelph offices. This team is supported by
more than 1,000 manufacturing and research and development (R&D)
colleagues, based at our Guelph and Montreal manufacturing sites.
Johnson & Johnson Products Inc., a manufacturing site and R&D facility
remains in Montreal. This 673,000-square-foot site operates 24 hours a
day, seven days a week and has a staff of approximately 700 employees.
Johnson & Johnson Products Inc. manufactures world-class feminine
hygiene products such as STAYFREE®, CAREFREE® and o.b.® Tampons.

The manufacturing site for McNeil Consumer Healthcare, division of

Johnson & Johnson Inc. is located in Guelph, Ontario. The location
originally started in 1974 and began to manufacturing Johnson & Johnson
baby products four years later. By 1980, the site began producing
TYLENOL® brand products and grew to 100,000 square feet by 1984.
Through the 1990s, our Guelph plant added more products to their
manufacturing lineup and by 2000 began manufacturing for the U.S. as
well. Today, our “Guelph Campus” spans more than 205,000 square feet
and produces our over-the-counter (OTC) products for Canada including
TYLENOL® and MOTRIN® IB and BENYLIN.®

In addition to manufacturing, Guelph is also home to our Canadian OTC

Research and Development Facility — including new product development
and analytical laboratory — and warehousing facilities.

Product range:

It is analgesics or baby care, endoscopic surgery or interventional

cardiology, oral care or wound care, the Johnson & Johnson Family of
Companies make products that help people live healthier lives.

Below is a select list of some of our products introduced in the past 12 to

18 months.

Consumer Products

AVEENO® Intense Relief Repair Cream

The Intense Relief Repair Cream is a rich cream developed with leading
dermatologists to provide relief from irritated, dry skin on contact and helps hold
moisture for up to 24 hours.
AVEENO® POSITIVELY AGELESS™ Firming Body Lotion
Clinically proven to go beyond long-lasting moisturization to help visibly improve
the appearance of skin’s firmness on the décolletage, upper arms and waist in as
little as two weeks.

AVEENO® POSITIVELY AGELESS™ Warming Scrub

The Warming Scrub gently exfoliates to remove dull, dry skin, while lifting away
dirt, oil and makeup, without over-drying or irritating sensitive skin.

AVEENO® POSITIVELY RADIANT™ Tinted Moisturizer with SPF 30

The Tinted Moisturizer is formulated to provide natural-looking, lightweight
coverage with the hydrating benefits of a lightweight daily moisturizer to nourish
skin.

CLEAN & CLEAR® ADVANTGE® Blackhead Eraser™ Exfoliating

Cleanser
A water-resistant battery-operated, hand-held applicator that helps to get of
stubborn blackheads and prevent new one from forming.

CLEAN & CLEAR® Makeup Dissolving Facial Cleansing Wipes

Ultra soft, pre-moistened cloths that gently dissolve all traces of dirt, oil and
makeup, including long-lasting, extended-wear makeup, for clean skin in one,
easy step.

CLEAN & CLEAR® Makeup Dissolving Foaming Cleanser

A daily cleanser that is specially formulated to cleanse skin and effectively
remove makeup in one, easy step.

CLEAN & CLEAR® Soothing Eye Makeup Remover

Specially formulated to gently and effectively dissolve long-wear eye makeup
and waterproof mascara in one step.

JOHNSON’S® HEAD-TO-TOE® Foaming Wash

A new, gentle cleansing product that contains mild ingredients and the updated
JOHNSON'S® NO MORE TEARS® formula.

JOHNSON’S® HEAD-TO-TOE® FRAGRANCE FREE BABY LOTION

A clinically proven mild lotion designed to be gentle enough for baby's delicate
face. Especially designed for newborns, this NO MORE TEARS® formula
moisturizes baby while helping maintain its natural moisture balance to help
protect baby from dryness.
JOHNSON’S® Baby Bubble Bath & Wash

JOHNSON'S® Baby Bubble Bath & Wash contains an all-new formula

combining the NO MORE TEARS® extra gentle baby wash formula with
big, bath time bubbles.

Product mix: Operating in over 50 countries with more than 100,000

people, Johnson & Johnson USA has been ranked 4 times in the “Fortune Top 10”
list of the most admired companies in the US. Johnson & Johnson (J&J) India, a
subsidiary of Johnson & Johnson USA, is one of the leading players in the Indian
pharmaceutical and consumer products business. It has employee strength of
over 1,800. It started business in India in 1947 in Bombay with Johnson’s Baby
Powder, and, over time, introduced other products like toothbrushes, Johnson’s
Baby Cream and Prickly Heat Powder.

Facility lay out:

Employee Health

Let’s say you’re a Johnson & Johnson employee who wants to take better
care of your health. You could visit the medical department for some
advice, an exam or maybe a quick checkup, or attend a Company lecture
on health and hygiene, or pick up one of the many pamphlets the
Company publishes, or even get some exercise in one of the on-site
facilities for employees – the swimming pool, or maybe the tennis court.
Maybe you would consider joining one of the employee athletic teams.
Johnson & Johnson made the first ever mass-produced sterile surgical
dressings and sutures, the focus at the Company was on strict cleanliness
and antiseptic procedures — to the extent that the Company’s germ-free
manufacturing environments were cleaner and had stricter standards than
those of most hospitals of the era. Johnson & Johnson also published a
number of pamphlets and bulletins on contagious disease prevention,
public health, maternal and child health, and more.

On-Site Facilities
Johnson & Johnson had an outdoor tennis court, an indoor area in the
Laurel Club for either tennis or badminton, and a swimming pool for
employees that was connected to the Cotton Mill. The pool had showers
and a dressing room, with separate hours for men and women. Among
the classes given for female employees 100 years ago were dancing and
calisthenics. Employees also had a variety of sports teams. Male
employees formed the Johnson & Johnson Athletic Association, which had
a baseball team and competed at the New Brunwsick, N.J. YMCA in early
1919. That competition included basketball, tug of war contests,
swimming races and diving.

Empower employee :Johnson and Johnson company provide the all

employee is responsible for maintaining quality control of the part and
product .The four men were given input into the shop’s working hours
(8.a.m to 2.45p.m)and have had opportunity made available for job
advancement.

Provide a good employee benefit package: Employee retention is

one of the top concerns of manger.johnson offer full-range of benefit
including 90% coverage insurance premiums ,bonuses and vacation and
retirement package.

Entertainment and Gifts: Johnson & Johnson companies are expected to

adhere to industry standards for providing hospitality, meals and gift to
health care professionals.

Fee-for-Service Agreements: Johnson and Johnson companies are

permitted to enter into agreement with physicians and other health care
professional who provide services. (clinical research, advisory board
participation, product development, and promotional speaking
engagements) that are of bona fide value to the company.

Educational grants and fellowships: Johnson & Johnson may provide

grants to support legitimate educational activities directed towards health
care professionals or patients. Fellowships are grants o institutions or
professional societies dedicated to medical education. The funding
enables health care professionals to gain additional knowledge and
training in a medical specialty.

Charitable contributions: charitable contributions are limited to

organizations that focus on health and human services, community needs
or educational programs related to medicine and health care.

Facility location:

Client Background
Johnson & Johnson (J&J), with approximately 98,500 employees, is the
world's most comprehensive and broadly-based manufacturer of health
care products, as well as a provider of related services, for the consumer,
pharmaceutical and professional markets. Johnson & Johnson has more
than 194 operating companies in 51 countries around the world, selling
products in more than 175 countries.

Culture
An organization's culture—its structure and values—is the single most important factor for
overcoming acute challenges and for transforming the industry one facility at a time.

Problem
One of the J&J facilities in the United States had a common problem for
many facility managers and Information Management (IM) departments:
How do we locate people in our facility? With hundreds of employees and
offices/cubicles and thousands of square feet, it isn’t always easy to locate
someone in the building. The printed distribution of maps gets too
outdated and cumbersome to distribute. They needed a quick available
way to locate people on the site without having to distribute hundreds of
printed maps.

Many times the staff, IM in particular, had to go to an area of the facility

and walk around trying to find the right office or cubicle.

Solution
J&J’s 100+ CADD users and Engineering Document Management (EDM)
System, offered an innovative web-based solution that could be accessed
by everyone on the local Intranet. The solution was to place AutoCAD on
one of their Internet Information Servers (IIS) and have a custom map
generated for the Intranet user. The user could select an office/cubicle to
find and a custom map showing that location would be sent back to them
in the browser. The map would be in AutoCAD Drawing Web would allow
the user to dynamically zoom, pan & print their custom map – without the
need for AutoCAD on their desktop.

Benefit
In this case, J&J was able to provide an intuitive web-based Facility Map
Generator for their Intranet users.

Their IM department was able to now quickly locate an office/cubicle when

they were needed to provide support at the user’s workstation. Their
employees also spent less time wandering around an area looking for a
meeting area or office. Overall, navigation around their site improved by
implementing the solution.

Provide a web site where your customers can fill out information that in-
turn sends them back a design drawing over the web – without the need
for them to have AutoCAD!
Keep your company’s CADD Standards in a user-friendly browser-based
environment that gives them quick access to standard libraries of
symbols, procedures and manuals.
Employees
The Johnson & Johnson Family of Companies offers a wide range of
services to its employees.

At the Your Benefits Resources™ (YBR) Web site, you can access personal
benefits information and perform benefits transactions, including:

• Manage your Savings Plan account

• Enroll in or change your health care and insurance plans
• Initiate retirement
• View provider directories and health plan comparison charts
• Use benefits estimators and calculators
• Read information about the benefit plans
• Access benefits forms
• Contact a carrier

Capacity Management
This document describes our personal view of the meaning, principles and
some of the problems of Capacity Planning and Control. It provides a new,
lean, agile and holistic vision of capacity management including new
principles, based on our own research and experience, but encompasses
existing principles which we believe are beneficial including the work of:
Burbidge; Shingo; Taguchi; and the early work of Goldratt & Fox; and
Wight. It also discusses the limitations of popular computer based
scheduling systems and how to avoid them. It also provides an appraisal
of Advanced Planning and Scheduling (APS), Work flow, BPM and MRP2
systems, Finite material and capacity planning (including OPT, and PERT
networks)

Links to other best practices and training at bottom of page.

There are two components of capacity management:

 A. Capacity Planning (creating sufficient, flexible, capable, capacity & a valid,
best, "do-able", resilient, plan, to accommodate demand)
B. Capacity Control (ensuring the plan is met by managing resources)

Without capacity (and materials) to meet the demand, the plan cannot be
valid.

A. Capacity Planning
There are, in a typical business, four levels where capacity planning (&
control) is required (as shown below). At each of these levels there may
be a one-to-many relationship with the level below. There are certainly
differences in both planning detail and planning horizon required to satisfy
each level. For example at strategic planning level one, product groups
(not necessarily individual products) are being forecast with an horizon of
perhaps years. At level four, when you are managing an individual
resource, you are dealing with detailed operating instructions for an
individual process and horizons of perhaps seconds:
Taking each of these levels in turn:

1. Strategic Capacity Management (as a part of business planning) includes

capacity management activity to:
• Define longer term capacity goals (time phased resources required
to meet the business plan)
• Capability
• Capacity
• Impact of New Product Introduction / old product kill
• Manage gross and long term capacity to meet it which will include
the following considerations and actions:
• Devise upsize / downsize strategy (output or responsiveness)
• Manage volume & variety change
• Place products in business units / locations & position
capacity geographically (to source supply)
• Devise strategies to manage seasonal demand /
demand variability
 • Attack the 6 drivers of performance & 5 attributes of
resources to provide:
• Resource Viability & Core Competence
• Capacity (line) balancing
• Replacement theory (Repair or replace?)
• Create resilience and consistency of service in
the supply chain
• Create / update disaster recovery plan
assessing risk / business continuity (See
Process FMEA)
• Define "Critical Mass" to be viable
• Providing competitive performance & meeting
Critical Success Factors (CSF's) for the business
• Resources capability (but avoiding the use of
Overall Equipment Effectiveness (O.E.E.)!
• Manpower planning / succession planning
for key skills
• Make vs. Buy
• Agility: (Redesign a “Hard Capacity Box”): (We discuss
three types of hard capacity constraint and how to
avoid or minimise the impact of them using a number
of tools & techniques such as "capacity exchange
curves", "the capacity battery principle", "redundant
methods", and "reducing the impact of forecast error",
in our S04: Strategic Capacity Management Training
Course). These constraints are characterised below:

1. Hard Ceilings, where it is extremely difficult to

add capacity e.g. expensive plant or equipment
working at full capacity, or a scarce skill. (Also
see Participative Sales & Operations Planning.)
2. Hard Floors, where fixed costs in the business
are high and it is difficult to remove them, due
expensive equipment or scarce skills employed
and where underutilisation in the lean times can
create financial difficulties
3. Hard Walls, (sometimes referred to as band
width, i.e. the inability to accommodate
simultaneous variety, even though there is
sufficient overall capacity, resulting in queuing),
where plant or people are insufficiently flexible
to accommodate the range of varieties or
changes in mix in particular but also volume (no
multi-purpose / quick change equipment, or lack
of versatility or mobility in the people (See Agile
Manufacturing.)
2 Redesign Supply Chains to achieve flow
1 Define simplified control systems for levels 2-4
1 Simplify the process & create value streams (Reducing the need for
scheduling)
3 Turn the capacity plan into the business plan
1 Justify capital expenditure (CAPEX), or produce profitability forecasts
4 Manage the implementation as part of programme management
2 Development, Sales and Operations Management (Management of the
demands on the business and the gross capacity to meet it and make it happen!)
(The Sales & Operations part of this process is mainly covered in a separate
article from our early work in this area "Participative Sales and Operations
Planning".) (See below.)
1 We have two general views of this process, as we will explain further:

1. If you basically, sell what you can make, you need a

"Participative Master Production Scheduling Process" assisted
by a simple capacity modelling system, (to organise
resources to deliver it, which basically is answering the
question, "When?")
2. Otherwise, you need or a full "Development, Sales &
Operations Management Process" to make the trade-offs
between the difficulty of selling vs. the difficulty of providing
and to additionally manage the development and sales
processes, which answers the three questions, "What, If and
When?".

• Traditionally development planning has been excluded from

the Sales & Operations Planning process, but we have found
that not only does development vitally influence the timing of
sales & operations plans, but it also can consume significant
amounts of operational resource, so needs to be integrated
into this process. However in some businesses with stable
products it is possible to make simplifying assumptions about
the amounts of resource needed for development.
• Also in addition to development, sales and operations
planning we need to ensure that the plan is met which means
that this is not simply a planning process but also a control
process to make it a complete "Development Sales &
Operations Management" (DS&OM) process. The output of
the planning process is the next, one plan to which everyone
in the business unit will work. How to design this process is
well beyond the scope of this article and it takes us 2-3 days
to explain in our training. (M04 / SSC08 and M05 below) But
some of the key issues follow:
2 It is important to distinguish between constraint types when capacity
planning. Hard ceilings in particular need to be considered in this high level plan,
but walls and floors may also be significant at this level.
3 Tools, techniques & methods to manage this level include "Participative
Master Production Scheduling", "TAKT time" & "Rough Cut Capacity Planning"
(see below).
4 There are 11 separate degrees of sophistication which can be applied to
capacity planning and control, ranging from the crude approximations of input /
output control below, to artificial intelligence / heuristics. Generally the more
complex the situation, the more sophistication needed. This will be covered in a
future article, but is included in our current Level 3 training (below).
5 Whilst often forgotten in the complications of the budgeting process,
capacity has to cope with peak demand not average demand in order to satisfy
individual customer needs. The difficulty is to satisfy peak demand constrained
by a budget containing average costs. This often leads to capacity lagging
behind demand in an upturn even if the demand is accurately predicted.
Conversely even if a downturn in demand is accurately predicted, the backward
looking financial control systems do not create cost reduction tension until too
late. This is a problem which management accounting has not yet properly
addressed, but fortunately most general managers have a weather eye on the
order book and sales pipeline to try to keep costs and income in line. However
this check should be a routine part of the Development, Sales & Operations
Management process at level 2. (This problem is acute in seasonal businesses or
where demand varies considerably, and requires additional sophistication in
planning.)
6 Advanced Planning and Scheduling (APS) begins to miss the point that if
sophisticated models are needed, perhaps the manufacturing system is too
complex and should be simplified. ("Period Batch Control" and "Production Flow
Analysis for Planning Group Technology" by the late Jack Burbidge). This thinking
has led to the popularity (but not yet wide-scale adoption) of the concept of "lean
manufacturing" and "lean supply chains", which is covered in more detail
elsewhere on the site.
7 The "Theory of Constraints" (TOC) penned by Goldratt & Fox in their book
"The Goal" argued that the capacity of the supply chain system was governed by
the capacity of its weakest link (the bottleneck) and that overproduction in other
areas would simply produce unwanted inventory. Therefore high level control
needs to be exercised to avoid local optimisation. Capacity planning can
therefore be simplified by creating representative models of the real world using
a capacity model based on critical or bottleneck resource availability and by
interpreting the demand on that resource alone to determine the overall likely
output. This technique is called "Rough Cut Capacity Planning" and provides a
rough check that demand and capacity are in balance.
8 This whole process was originally envisaged to be the role of an individual
called a "Master Production Scheduler" ("Manufacturing Planning & Control
Systems" by Volman, Berry and Whybark), who would present the output plan to
operations to produce. This concept was inherently flawed in that only that
person owned the plan. If this check (which can usually be done on
spreadsheets) is in place, a process can then be built around this to involve the
stakeholders in a planning process. This technique "Participative Master
Production Scheduling" (PMPS) ensures input from the participants to the plan
and thereby commitment to its achievement by those stakeholders.
9 By its very nature Master Production Scheduling (MPS) attempts to smooth
demand to produce a stable operations plan and thereby either, produces items
earlier than needed, or increases some batch sizes beyond immediate
requirements in anticipation of future requirements, both of which may be
competing with capacity required for immediate customer requirements, and
produce unnecessary inventory. These practices have to be viewed as sub-
optimal to producing what the customer wants, when they want it. However in
many businesses demand is influenced by seasonal or other factors which make
stable demand impossible. Or many processes or suppliers' processes are
inflexible, which make changeovers from one job to the next, time consuming.
The danger is that these constraints may be viewed as immovable objects when
in fact they can often be easily removed or alleviated. (See Agile Manufacturing.)
10 When capacity is approached by the demand, lead-times start to increase
disproportionately. In the figure below the first period is full and there is some
capacity available in the second period to accept further orders (capacity is
"Available To Promise" / ATP). So currently the lead-time is 2 periods. If a small
order is taken which fills this capacity the lead-time is now 3 periods. It is
interesting to note that the sales process from which the promises are derived
often ignores the dynamism of this relationship and the fact that relatively small
increases in demand will dramatically increase lead-time. This results in
unachievable promises being made to customers, and unrealistic Master
Production Schedules, which, if driving the materials plan, via an MRP1 or MRP2
system, will fill your raw materials store with short lead-time items that you do
not have the capacity to utilise. Also this leads to frustration, false expediting
and a breakdown of the planning system.

• When a new product is launched the lead-times are in fact longer than
they will be later, because later, the learning curve will have been
climbed, supplier relationships established, snags removed from the
design etc. It is interesting to note that this reduced lead-time is often not
later, reflected in the sales process.

3. Workflow Management / Scheduling (Scheduling of individual functions,

cells or process areas)
• In the mid 1970's the commercial availability of computers
also spawned capacity planning tools, whose models were
very sophisticated even by comparison with today's systems.
It is mathematically possible to create a comprehensive model
of the manufacturing or supply chain processes run on
powerful computers, which use a variety of optimising
techniques, in recently created "Advanced Scheduling
Systems", in order to schedule work. (Previous Technique of
the Week 020: "Close Scheduling" provides an introduction to
scheduling.)
• Also MRP2 Systems took the MRP1 plan and scheduled operations to
create a "work-to" list at operational level in the early 1980's.
• However it is difficult to justify the additional cost and
administration that these systems require, if:
• Less sophisticated processes such as an effective master
production scheduling process supported by a rough-cut
capacity model is implemented first.
• Simple scheduling systems such as "Level Scheduling" (See
Previous Best Practice of the Week 005: "Level Scheduling")
based on good work sequencing is employed.
• Simple loading / planning boards are adequate. (See Previous
Technique of the Week 017: "Loading Boards")
 • Work-In-Process is kept small by the use of Input / Output
Control (as shown below) or "Pull / Kanban" systems (see
Materials Management & Stock Control).

Input / Output Control

• Actual input should not normally exceed actual output to

avoid work in process building up and complicating the
process
• Planned and actual output should be equal (On Time In Full)
(see Previous Best Practice of the Week 046: "OTIF Measuring
On-time Delivery")
• Planned input should not normally exceed planned output
unless you are going through a period of priming, ramp up, or
ramp down
• There are a number of mechanisms which can be employed to
manage workflow at level 3 before considering scheduling systems
including:
• Pull Systems (see Materials Management & Stock Control) or
Kanban systems
• Input / Output control / TAKT control
• Out Tray Management (See Previous Best Practice of the
Week 035: "Out Tray Management")
• Queue management (checking the length of a queue and
acting on out-of-tolerance queues) (Future article)
• Measuring Operational Effectiveness (OTIF)

Finite material and capacity planning (including OPT, and Advanced

Scheduling Systems, and PERT networks)

There is no doubt that mathematical approaches to scheduling are both

valid and precise. You should bear in mind though that you can be
precisely wrong!, and there are some practical problems. Businesses are
complex, uncertain places. So to be accurate the mathematical models
must reflect the complexity and statistical uncertainty of reality. This
leads to a number of practical problems.

1. It requires a specialist to run it.

 2. Potentially very large computer models are required, which are unstable if
there is uncertainty e.g. Absenteeism, quality problems, process
breakdowns / unreliability etc.
3. It is very difficult to understand why the "work to" list says what it says,
and the plan is imposed not agreed.
4. Administration of the data is very high which means:
a. It is labour intensive
b. It becomes inaccurate very easily

These systems were widely used before the implementation of processes

formed around natural groups (cells) and Kanban systems, which have
proved far simpler and in many cases superior.

"Drag & Drop" electronic loading boards have some utility in resolving
scheduling problems where a manual loading board has reached its limits,
but they suffer the same disadvantages above.

There are a number of issues relating to the maintenance of valid

computer capacity models:

• The continuity of support

• The validity of models with uncertain processes
• The ownership of the resultant plan
• The understanding of the resultant plan
• The lack of stakeholder participation in the process

There is a further issue also relating to the documentation of the process,

which can become a barrier to change. For example in the
pharmaceuticals industry, process control documentation is of paramount
importance as a quality assurance and control mechanism. However the
documentation of the capacity planning parameters can create similar
significant administration.

You need to take a staged approach to implementing sophisticated

scheduling tools of any description. What you need to do is:

• Remove complexity from your operation by Organisational Redesign

techniques
• Remove variability from your processes
• Increase the agility of your processes
• Evaluate advanced systems with a view to redesigning your operational
planning and scheduling
• Redesign your planning process to take into account the remaining
variables
• Select the degree of sophistication you now require to deal with the
remaining complexity
• And then postpone spending the £100,000 or more on the computer-
scheduling tool by implementing the simple methods first and then
justifying the next level of sophistication a stage at a time
These arguments are still valid in the context of infinite capacity plans
contained in many MRPII systems. We describe this process in detail in our
courses M02 Advanced Scheduling Systems & M23 Capacity Management.

4. Process Management (E.g. individual settings, speeds, feeds, skills, set /

make ready times etc.)

At level four we have been involved in some interesting & lively

debates about:

• What is the best method (running speeds, feeds, process settings,

least waste, shortest lead-time etc.)? This is where Taguchi
methods (Design Of Experiments) is particularly useful. (In one
recent example we showed that by reducing conveyor speed, more
throughputs could be achieved.)
• Identifying and then driving skills development (versatility /
mobility) using skills matrices (See Previous Best Practice of the
Week 006: "Scarce Skills Management")
• Processing frequency / batch size, & in particular why work must be
done in large batches, which "Level Scheduling" and "SMED"
(below) specifically address.
• The worst case changeover time we have encountered so far
is 9 hours for a single "efficient" process. This was
accompanied by significant run down and run up materials
losses, inhibiting flexibility significantly. The best result we
have seen so far is 2 minutes for changeover of a large,
vehicle body panel, press die. It is this area that "SMED"
(Single Minute Exchange of Die) techniques ("A revolution in
Manufacturing: The SMED System" by Shigeo Shingo) has
much to offer.
• How to measure process effectiveness & what are the real
influences on process effectiveness. (See below.)
• The degree of automation which is appropriate in particular
circumstances.

We deal with these issues in courses M11 Simple Ways to Maximise

Output & Workflow & OM02 Managing & Improving Individual Skills
& Overall Skill Levels.

B. Capacity Control
Firstly we believe that the 3 dimensional approach of Overall Equipment
Effectiveness (OEE) is inadequate, and the six big losses of OEE
incomplete. In fact we have identified 21 so far, each of which needs to be
resolved individually. (See Previous Technique of the Week T007: "CARAP"
(Process effectiveness measurement, or why OEE / OME is for the birds)")

Secondly much is made of the process of capacity planning and in

particular in the availability of sophisticated re-planning tools. A university
professor recently stated that all of their post graduate research projects
in manufacturing systems engineering were dedicated to seeking the holy
grail of the ideal scheduling algorithm. However if as much attention was
paid to meeting the plan instead of constantly changing it we think the
process would be significantly more productive and also constantly
improving.

Thirdly much is also made of "sweating the assets" or "maximising

productivity". In fact there is only one asset in your business that needs to
be operationally sweated & that is the bottleneck. Often this bottleneck is
a service area or sometimes, if the order book is low, the sales
department. (See Malpractice M006: Hitting the numbers.) Sweating a
non-bottleneck will produce unwanted output! To illustrate of this point,
answer the following question:

How much output should operations ideally produce if the order book is
empty?

The answer of course is zero and of course ideally they should incur zero
cost (a zero capacity floor) in doing so. So why are operations measured
on maximising output?

The key question is how can we de-bottleneck, perhaps by reassigning

underutilised resources. We have developed a new way of defining
resource capability, de-bottlenecking and getting more output from them
which we teach in M05 Simple Capacity Planning & Control.

Capacity control operates at all four levels and between the

levels:

1. Strategic / Business Planning (where typically budgetary type controls

operate) but this plan must be "do-able" (established by modelling it using
the level 2 Rough Cut Capacity Planning tools)
2. Development, Sales and Operations Management / Master Production
Schedule, where the overall plan is measured and performance against
the plan analysed and actions taken to bring output into line with demand,
but any conflict between the business plan and what customers want has
to be reconciled at this level, not passed to level 3 unresolved.
3. Workflow which is typically short term, which can be minutes, hours or
days depending on the lead-time, where short term actions are taken to
bring the plan and achievement into line. There is a particular
phenomenon called "interference" well known to methods study
practitioners many years ago, which states that simultaneous variety may
result in one job's progress being in conflict with another delaying one or
the other. This means that the level 2 plan when scheduled at level 3 may
be impossible. Therefore this plan's aim is always to deliver the level 2
plan or report back where interference prevents this, for resolution at level
2 and, if substantial, has become the justification for the more
sophisticated scheduling tools mentioned earlier.
4. Process Management conformance to requirements. (E.g. Why everyone is
not using the same "best" method.) Ultimately these resources have to
 deliver the level 3 plan but in gross terms have to deliver the levels 1-2
plans. This therefore forms the development priority (and plan) for this
level.

The difference is really the level in the organisation where the decisions
need to be taken, which depends on the impact. This tends to be strategic
& long term at business level, but tactical & short term where the horizon
also tends to be shorter for local decision making. However the feed
forward revised plans and feedback loops between levels on performance
should be timely!

The timeliness of control is a key element, which can be illustrated as

follows:

In the left hand diagram if action is taken in a timely way to respond to a

required increase in output, the deviation can be corrected fairly easily. If
the action is delayed the shortfall / backlog (in this case) in the right hand
diagram has accumulated and recovery is much more difficult. In one case
we were involved in, a 28 week recovery plan was needed to remove a 3
week backlog.

There needs to be a mechanism to exercise the control involving the

stakeholders. This implies a meetings structure to discuss the issues and
to resolve the problems. These may include:

• Programme management at level 1

• The Master Production Schedule meeting at level 2
• And perhaps a start of shift / sunrise team meeting at a lower level.

In the case of a food manufacturer with 8-hour customer required lead-

times, a meeting was held between the production supervisor and the
production planner every hour.

.
Quality management

The quality and safety of our Johnson & Johnson company products is our
priority. The work starts with the design of their products to ensure they
match requirements. Then they select raw materials and ingredients.
These must be checked against their requirements to ensure purity,
safety and efficacy. Finished products must also undergo testing before
they can be sold

Our commitment to safety continues after products reach the

marketplace. Johnson & Johnson company work to ensure products are
used appropriately by:

• Monitoring safety data and conducting studies of products to identify

potential safety issues
• Educating doctors and other health care professionals on the appropriate
use of our prescription medicines and medical devices
• Helping people understand how to use medicines and health care
products wisely

Sophisticated tools and systems help us to identify factors that may affect
product quality, efficacy and safety. With this knowledge, we continually
improve our product design and manufacturing processes.

The safety and quality of ingredients and materials is essential. Johnson &
Johnson use advanced technologies to bring the best and most effective
health care products to our customers and patients. They also work with
regulatory authorities around the world to ensure patient safety and that
the environment is protected.
Ingredient Safety
Nanotechnology
Genetically Modified Organisms
Pharmaceuticals in the Environment
Protecting the Environment

From the development phase to addressing the safety of products on the

market, Johnson and Johnson take steps to ensure high standards of
quality, safety and efficacy.
Product Safety
Anti-Counterfeiting Measures

Our quality systems aim to ensure our products perform the way they are
supposed to and meet all regulatory requirements.
Dedication to Quality

In addition to doing their own manufacturing, our operating companies

also rely on other firms to produce finished goods and ingredients. The
Johnson & Johnson Standards for Responsible External Manufacturing help
us select partners who operate in a manner consistent with our values,
and they help our manufacturing partners understand our expectations.
Standards for Responsible External Manufacturing

Our companies also help health care professionals, patients and

consumers understand how to use their products in a safe, effective way.

Inventory management:

Existing database since 1990:

1. Direct and indirect stationary sources

2. Complete project database

3. No mobile sources

Internally developed web-based energy:

I. Annual reporting by 261 facilities worldwide

II.monthly tracking tool provide to each facility.

Mobile emission:

1. Tracked by strategic sourcing for US/PR since 2001

2. Will track worldwide 2003-2005

No process emission

HFC emission

1. Completed inventory in 2002 in UR/PR

2. Using estimated leakage determined to be<1%

3. Reporting of all HFC,HCFC & CFC WW in 2003

Stationary sources for small facilities

I.evaluted and determined to be <1%

Energy tracking system:

Added table of emission factor

Added additional fuel source, green power/green tags together.

Johnson & Johnson inventory:

.Document and report by: facility, company, operating group, country,

worldwide

.Trend from 1990 to present

.Track on-site renewal and green power purchases

.Track ladfill gas, bio-diesel

.Track renewal energy certificates

.Accommodate sequestration

.Energy efficiency improvements

.Combined heat and power

.On-site renewable

.Green power purchase

.Carbon trading and sequestration

.Increase fuel efficiency and implement alternative fuels for Johnson and
Johnson fleet.

Supply chain management:

Last week was not a good one for Johnson and Johnson in the light of
public persona. On Friday, the company’s McNeil Consumer Healthcare
division announced the voluntary recall of several hundred batches,
roughly 50 million bottles, of well-recognized over-the-counter medicines
including Benadryl, Motrin, St. Joseph’s Aspirin and Tylenol. The recall is
motivated by consumer complaints of a musty-smell in bottles of Tylenol
product, which could involve other products. A few people have reported
digestive problems from taking the subject medicines. This latest recall is
in addition to previous recall conducted in November and December. The
company has set-up a special web site to provide consumer information
on this recall.
There are many news articles circulating throughout the Internet but the
most interesting article was published today in the New York Times
business section. In Recall, a Role Model Stumbles, makes reference to
the Harvard Business School Model which, according to the article,
teaches executives to “communicate clearly with the public about a crisis,
cooperate with government officials, swiftly begin its own investigation of
a problem and, if necessary, quickly institute a product recall.” The
concept was developed based on the 1982 incident involving J&J’s
exemplary and responsive conduct when several people died after taking
alleged tainted Tylenol pills. The article also takes note of the fact that
U.S. government regulators stated that the company should have acted
far more quickly after reports of the moldy smell were first evident as far
back as 2008. To make matters even worse in relation to the J&J brand,
simultaneously, the weekend edition of the Wall Street Journal ran two
articles, J&J Accused of Kickbacks to Omnicare, and FDA Chastises J&J
Over Tylenol Recall, (subscription may be required) which both did not
present an entirely positive persona for this manufacturer of consumer
healthcare products.

What should make this all the more interesting for our community is that
the suspected cause of the problem is noted as appearing further down in
the supply chain. In the actual FDA inspection report referenced in the
Times article, the moldy smell is indeed acknowledged in 2008, occurring
within certain lots of Tylenol Arthritis Relief Caplets. That report notes
that it was not until August of 2009 before McNeil had acknowledged a
potential quality control problem. The FDA noted that a field alert was not
initiated by McNeil until September of 2009, and the December recall was
initiated at the time of the FDA’s follow-up inspection.

A McNeil report in December concluded that the most probable cause was
“the proximity of chemically treated wood from pallets and empty bottles
transported from the bottle manufacturer to the product packager.” The
FDA report however notes that McNeil did not extend its investigation to
other products that may have received the same packaging containers.
The FDA report goes on to cite McNeil Healthcare for not proactively
following-up on its quality control procedures related to root cause of the
smelly complaints in a timely period, as well not following written
procedures for the cleaning and maintenance of equipment used in the
manufacture and processing of drug products.

Industry observers are noting that McNeil has underreacted to a limited

problem, which is quickly turning into a public relations and potential
brand identity problem. More important, however, is that this an industry
and a company that prides itself on superior quality and the data in the
FDA report does not seem to reflect a six-sigma oriented quality process
response. If the root-cause of the problem is actually the bottle
manufacturer, then the obvious question is why haven’t corrective actions
been taken in all these months to resolve the trace chemical problem in
pallets? Other questions that comes to mind is whether the supplier or a
Logistics provider was utilizing cheaper wooden pallets as a lower cost
alternative, or whether this problem just exists for McNeil vs. other
manufacturers? Instead, McNeil has invoked the ire of the FDA in
perceived “foot dragging” and placed its brand in a negative light.

The latest McNeil press statement notes that the company has determined
that the moldy smell was caused by trace amounts of the chemical TBA in
wooden pallets, and that the company has now ceased delivery of
products on the suspected pallets and ordered “shippers” to discontinue
their use. Could this action have been accomplished much sooner in this
overall saga?

Somehow, McNeil’s quality processes did not respond in a timely manner,

and the FDA has called the company to action in an embarrassing fashion.
As I pen this post, while the J&J consumer blog a first in the
pharmaceutical industry, has today acknowledged the announcement of
this recall, there are still no personal management comments indicating
what supply chain actions are being taken to insure ongoing consumer
safety. A fundamental tenet of supply chain risk management is that
when a problem is deemed to be significant, than acknowledge that
problem and initiate timely mitigation. Selective use of social media such
as blogs and Facebook may have helped in reinforcing McNeil’s
commitment. The again, the lawyers may be saying something otherwise.

J&J is a stellar and well run company, and it’s a shame that an incident of
packaging material and manufacturing processes has percolated for such
an extended period. J&J has 15 days to respond back to the FDA. It’s
responses in the coming days and weeks to this current situation of a
limited problem blossoming to a larger problem will determine if we have
yet another case study on how perceived limited product quality risk can
blossom to a much broader scope.

REFFERENCES:WWW.google.com

www.wikipedia.com

www.doc.com