Operations Management Analysis of Johnson & Johnson

This assignment delves into the operational management practices of Johnson & Johnson. It analyzes various aspects such as production, supply chain, human resources, and technology utilization. The analysis aims to identify strengths and weaknesses in their current operations, propose improvements for greater efficiency and profitability, and evaluate the impact of their operational strategy on competitive advantage within the business environment.

Running head: OPERATIONS MANAGEMENT REPORT
OPERATIONS MANAGEMENT REPORT
Name of the Student
Name of the University
Authors Note

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Executive Summary
The report emphasized on the effectiveness of Operations Management through the given
company Johnsons and Johnson. The report focuses on three operation management decision
areas that include inventory, quality management and its job design and human resources. The
present activities of the firm are critically analyzed and ways to improve its performance has also
been recommended. Furthermore, the firm’s operational strategy has been evaluated to ascertain
the company’s present strength and weaknesses in the competitive business environment.

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Table of Contents
Introduction:....................................................................................................................................3
Analysis:..........................................................................................................................................3
A. Operations Management in Johnsons & Johnsons:................................................................3
B. Operational strategy for Johnson & Johnson:.........................................................................6
Recommendation:............................................................................................................................8
Conclusion:......................................................................................................................................8
References:......................................................................................................................................9

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Introduction:
Operation Management is a crucial part of management that is related with the
controlling and designing the production process. It is concerned with organizing, planning and
supervising the manufacturing, production and services provision. It makes the organization
more efficient by effectively turning inputs into output. Johnsons & Johnsons is a multinational
company that deals with medical devices, consumer and pharmaceutical packaged goods
(jnj.com. 2018). In the recent times, management combines and transforms different resources
applied in the operations subsystem of the firm. This resource is converted into valued added
services in an effective and controlled way as per the organizational policies (Hitt, Carnes and
Xu 2016). In the recent times, Johnsons & Johnsons has formulated all the strategies that lead to
overcome the magnitude of changes in its technological and managerial procedures.
Analysis:
A. Operations Management in Johnsons & Johnsons:
Quality management:
Johnson & Johnson is the most diversified and largest healthcare organization in the
world. According to Heizer and Render (2014) Johnson & Johnson takes major step to ensure
sustained and consistent high-quality, effective and safe products. The organization took action
after evaluating and settings targets to ensure standardization. As per the company’s citizenship
and sustainability report, it ascertained various material issues. This includes affordability and
access to health care, ethical performance, global performance, global health and compliance. As
mentioned by Slack, Chambers and Johnston (2010) ensuring safety and product quality is the

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major issue of Johnson & Johnson. The company best serves their customers with its quality
product to maintain its autonomy. The company has formed Johnson & Johnson Quality &
Compliance (J&J Q&C) so that consistent implementation and standardization of it’s across its
standards and policy across the organization.
As per Greasley (2009) Johnson & Johnson continuous and quality approach includes
management review process. This requires the firm to continuously improve the quality system
by ensuring adequacy, suitability and effectiveness. On the other hand as per Johnston, Clark and
Shulver (2012) Johnson & Johnson has achieved major proactive and integrated approach for
continuous and quality improvement. The organization continues look at safety and quality
throughout all product life cycles phases. Safety and health impacts are assessed for all of
organizational important product categories in every business segment throughout the world.
Johnson and Johnson recently are exploring innovative techniques to foster its proactive
quality culture in a continuous manner. As mentioned by Chase, Jacobs and Aquilano (2006) the
firm’s pharmaceutical segment is monitored continuously before the use of in-market products.
Effective decisions on quality matters are taken by the Quality organization.
Inventory management:
Johnsons and Johnson aggregated amount of materials that are unprocessed should be
used in production or manufacturing process raw material and its supplies has increased from
2015 to 2017 (jnj.com. 2018). Besides satisfying the market demand obtaining adequate
performance, the effectiveness of organization is known through its enhanced features. The
organization has online system for requests and orders that involves the authorized dealers. As
per Fitzsimmons and Fitzsimmons (2008) the company’s inventory management is massive

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complex. It is important that that the inventory management system is optimized so that the
needs of the patients is met in a more transformational way.
Effective inventory policies and high level of medical supplies services are essential
objectives of health care industries (Slack et al. 2009). The main focus of the operations
management of the firm is made by maintaining optimal inventory holding and ordering.
Johnson & Johnson addresses this decision is implemented through finished goods inventory by
applying just-in-time inventory management. The medicines and related products are
immediately shipped to fulfill the needs and orders of the customers. Johnson & Johnson holds
other products as a crucial finished goods inventory. To ensure optimal ordering of inventory and
holding, the company’s employees are also trained to increase the speed and transparency related
to order fulfillment (Johnston Clark and Shulver 2012). The application of mobile computers by
linking it to the databases and central computer has made the process more adequate. Moreover,
operations management optimizes the inventory size so that cost is minimized.
Job Design and Human Resources:
According to Smith, Maull and CL Ng (2014) in this strategic decision area the main
focus of Johnson & Johnson, the main focus is human resource development. Training and
development program is given by the organization to satisfy the concerns of the organization. As
per the website report, the organization has also research teams and support centers for the
purpose. The capability and adequacy are the major concern of organization in the fields of
operations management. The organization uses adequate training programs so that the employees
feel more empowered.

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Johnson & Johnson should use proper workflow so that it could integrate creative and
innovative ideas. Moreover, while making the decisions for inventory and operational
management the company should engage in automation system. This helps in monitoring and
controlling its overall inventory. This would further help in evaluating, monitoring and checking
the productivity level of Johnson and Johnson. The pharmaceutical company should also use first
in first out method so that earlier products are sold first before any new goods are introduced in
the market (Choi, Cheng and Zhao (2016). staff motivation is important in the long-run as it
would help Johnson & Johnson to achieve maximum satisfaction of the employees and also
creates performance appraisal.
B. Operational strategy for Johnson & Johnson:
Johnson & Johnson main objective is related to maximizing profit and market growth as a
long-term strategy. Johnson & Johnson has adopted strategy for global standardization and has
lowered its cost by customization of products. Operational strategies consist of customer driven
approaches that fulfill the desire and requirements of its potential target market. The quality of
the product has been increased through proper innovation and added values (Chan et al. 2017).
Johnsons and Johnsons have continuously enhanced its core competencies and on an ongoing
basis has developed new strengths. The internal environment is evaluated to ascertain the
strategy plan that internally affects the organization.
Strengths:
Johnson and Johnson being leading health-care brands have been ranked the best among
its competitors in the industry. Abundant financial resources are used by the organization and
further exploited by Research and Development department so that committed staffs are

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employed. They further create and innovates hygiene products due to usage of latest technology
and company’s brand image. Moreover, the focus is on the product leadership that offers its
consumers the best product in the overall industry (Knoppen et al. 2015). The employees of
Johnson & Johnson are well motivated and have provided its employees various incentives. This
ranges from personal to personal benefits including bonus for annual incentive, long-term
incentives and severance benefits. The organization has expanded all around the world at an
international level. The better world-wide distribution skills because of its global standardization
strategy have allowed the firm to generate efficient market strategies by cost reduction (Hitt,
Carnes and Xu 2016). This approach generally arrives through fast product development and
economies of scale that is based on stable relationship with the distribution agents.
Weaknesses:
The major business strategy of Johnsons and Johnsons is to control cost. This leads rise to
major drawback as it results in low customization. The organization is highly dependent on the
success of its launch product that is vulnerable due to uncertainty. Conflict with its partner and
portfolio companies also creates havoc in the operation management of the company. The
ingredients used in the products are unsafe as per the government reports (jnj.com. 2018). The
brand image of the company is adversely affected due to negative words of mouth. Therefore, it
creates a negative impact on productivity of the organization. Moreover, the manager also lacks
the flexibility required to overcome the existing challenge for changes required in the local
market.

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Recommendation:
Certain improvements are required in the Johnson & Johnson Company. The firm should
adopt more centralized approach for management so that the employees are more motivated. The
firms need to be more involved in certain initiatives by developing incentives and rewards for
achieving the goals of the organization. Though Johnson & Johnson has a great collaborative
relationship but outsourcing would help the firm in lowering the cost of production. The
organization hires it employees completely based on their experience and ability but relocation
of staff can also helps the firm to strengthen the company’s management structure. The operation
management decision of the firm should adopt additional core strategies to evaluate and adopt
itself according to the changing environment.
Conclusion:
Johnson & Johnson operation management area has been analyzed and its operational
strategy has been reviewed. The firm’s operational management areas, where decision for quality
management, inventory management and job design and human resources. It can be concluded
that the organization’s operation management decision is adequate but need to be more
optimized and updated to yields maximum profit in the long-run. The present activities related to
the organization have been analyzed and effective ways for the improvement of information is
also considered. The operational strategy of the firm has also influenced and enhanced the firm’s
competitive advantage in the business environment. Moreover, the strength and weakness
evaluated from the operational strategy showcased the firm’s existing position in the business
market.

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References:
Chan, H.K., Lacka, E., Yee, R.W. and Lim, M.K., 2017. The role of social media data in
operations and production management. International Journal of Production Research, 55(17),
pp.5027-5036.
Chase, R. B., Jacobs, F. R. and Aquilano, N. J., 2006, Operations Management for Competitive
Advantage, 11th Ed., McGraw-Hill.
Choi, T.M., Cheng, T.C.E. and Zhao, X., 2016. Multi‐Methodological Research in Operations
Management. Production and Operations Management, 25(3), pp.379-389.
Fitzsimmons, J. A. and Fitzsimmons, M. J., 2008, Service Management: Operations, Strategy,
Information Technology, 6th Edition, McGraw-Hill, New York.
Greasley, A., 2009, Operations Management, 2nd Edition, John Wiley & Sons APM, 2013, APM
Body of Knowledge, 6th Ed.
Heizer, J. and Render, B., 2014, Operations Management: Sustainability and Supply Chain
Management, 11th Global Ed., Pearson Prentice Hall
Hitt, M.A., Carnes, C.M. and Xu, K., 2016. A current view of resource based theory in
operations management: A response to Bromiley and Rau. Journal of Operations
Management, 41(10), pp.107-109.
jnj.com (2018). Johnson & Johnson Homepage | Johnson & Johnson. [online] Available at:
https://www.jnj.com/ [Accessed 19 Mar. 2018].

10OPERATIONS MANAGEMENT REPORT
Johnston, R., Clark G. and Shulver, M., 2012 Service Operations Management: Improving
Service Delivery. 4th edition. FT Prentice Hall.
Knoppen, D., Ateş, M.A., Brandon-Jones, A., Luzzini, D., Van Raaij, E. and Wynstra, F., 2015.
A comprehensive assessment of measurement equivalence in operations
management. International Journal of Production Research, 53(1), pp.166-182.
Slack, N., Chambers, S. and Johnston, R., 2010, Operations Management, 6th Edition, FT
Prentice Hall.
Slack, N., Chambers, S., Johnston, R. and Betts, A., 2009, Operations and Process Management -
Principles and practice for strategic impact. 2nd Ed., FT Prentice Hall.
Smith, L., Maull, R. and CL Ng, I., 2014. Servitization and operations management: a service
dominant-logic approach. International Journal of Operations & Production
Management, 34(2), pp.242-269.