Quality Issues Faced by Johnson & Johnson

Table of Contents

• Abstract
• Background
  • Six Sigma Process
  • Quality at Johnson & Johnson, Inc
• Opportunities for Improvement
  • Recommendations
  • Quality and Total Quality
• Conclusion
• References

Abstract

In the last five years, Johnson & Johnson Incorporated has had a number of different problems with quality control. Amongst the many recalls that the company has had to place, they also tried to hide the fact that children’s Motrin had been contaminated by sending out agents to purchase the entire product off of the shelves. Although this was a tactic to try and mitigate reputation problems, in the end the lack of transparency only lead to more problems and to government interference. The following paper reviews the issues faced by Johnson & Johnson over the past few years and makes recommendations on how Johnson & Johnson will improve quality control through their organization.

Defining Quality Issues at Johnson & Johnson

Johnson & Johnson Incorporated is a diversified company whose main focus is on the healthcare industry. The company focuses on the Six Sigma quality process through which quality assurance is maintained. This process is used in the 275 different operations that the company holds. However, in the last five years Johnson & Johnson has had to recall a number of different products because of poor manufacturing standards. Despite claims of a high manufacturing quality control, it is clear that with the number of problems they have experienced that they have yet to reach a level of consistency that is required in order to provide products in the healthcare industry. Because of the number of problems that Johnson & Johnson has experienced in the last few years, the company is in need of strict improvement that consists of lowering their percentage of defects in order to keep the public safe.

Background

Established in 1887, Johnson & Johnson Incorporated is engaged in research and development along with manufacturing and the sale of a broad range of items that relate to the healthcare field. They represent a family of companies which span the healthcare industry through wide diversity of interests. There are more than 128,700 people working for the company in the 275 individual companies under their umbrella. They operate out of more than 60 countries with their worldwide headquarters in Brunswick, New Jersey. According to Reuters (2014) there are three main business segments through which the company operates: pharmaceutical, consumer, and medical devices and diagnostics. The subsidiaries that operate underneath the company umbrella include 146 manufacturing facilities which total about 21.6 ft.² of operating floor space.

Johnson & Johnson is the six Sigma quality process in order to assure that the products that they creates are the highest possible quality. According to Johnson & Johnson, Inc. (2014) “Johnson Controls has invested in the development of a cadre of “black belts” that are trained and certified in Six Sigma and lead the effort to measure, analyze, improve and control our business processes to meet ever-rising customer expectations”. In order to develop programs that are based on their corporate philosophy and the quality plan that they have put into place, project and task levels are addressed through project specific quality assurance programs. The company asserts that projects are conducted with quality management performing outside of the through which the direct program or project manager is developing a product and the quality management reports to the general manager of Johnson Controls security systems as opposed to the program or project manager in order to preserve an unbiased assessment (Johnson & Johnson, Inc., 2014).

Six Sigma Process

The Six Sigma quality process was first developed by Motorola in 1986. The purpose of this process is to improve the quality outputs by making sure that defects in the causes for those defects are addressed at the manufacturing stage. This includes making sure that manufacturing processes are perfect and that business processes are aligned with the needs of manufacturing. The tools through which this process is developed include statistical methods and ratings that indicate the percentage of products that are defect free. Measures and statistics are at the core of creating improvements to this system. The target of operation is 3.4 defects per every million activities which are presented as opportunities within the system (Pande, Neuman, & Cavanagh, 2000). The definition that Pande, Neuman and Cavanagh (2000) give for Six Sigma is as follows: “A comprehensive and flexible system for achieving sustaining and maximizing business success. Six Sigma is driven by a deep understanding of customer needs, a systematic use of data and statistical analysis, and careful management, development and reinvention of business processes” (p. xi). This definition is at the core of understanding the principles that are involved with Six Sigma.

Using the Six Sigma quality process means defining how the DMAIC (pronounced Duh-May-Ick) process can be utilized. The DMAIC process includes defining the project goals, measuring the process, analyzing the data, improving the process, and controlling   the process. One of the most important parts of this process is making sure that members of the organization are specifically assigned roles that will define their responsibilities so that implementation is clear and precise in terms of controlling quality (Kumar, 2006).

Quality at Johnson & Johnson, Inc.

When Congressman Edolphus Towns from New York decided to challenge the problems that Johnson & Johnson was facing from a quality perspective, he said that “The information I’ve seen during the course of our investigation raises questions about the integrity of the company,” he boomed. “It paints a picture of a company that is deceptive, dishonest, and has risked the health of many of our children” (Kimes, 2010). The House Committee on Oversight and Government Reform was taking the CEO of Johnson & Johnson to task over the problems that they had been having with the quality of their products. The McNeil consumer healthcare division that was in charge of making the over-the-counter drugs had requested eight recalls on their products which included approximately 136,000,000 bottles of children’s Tylenol. Three of their other front running drugs, Motrin, Benadryl, and Zyrtec were also being recalled. Dark particles had been discovered in some of the drugs and have the potential to be contaminants. As a result, the Food and Drug Association cited plant which caused it to shut down until at least 2011 (Kimes, 2006).

A more disturbing revelation was that contractors were hired in 2009 I Johnson & Johnson to secretly go store to store and buy every packet of Motrin rather than publicly admitting the problem and pulling them off the shelves immediately. This created a conspiracy through which the company was not only making poor quality products, but they were also instigating a cover up. CEO Colleen Goggins who was the head of the consumer products group which included the McNeil plant defended the actions of Johnson & Johnson by stressing that the recall was on drugs that had not been shown to cause any illness due to the contamination. One of the things that Congressman Towns cited as a reason for the inquiry was that Johnson & Johnson had failed to be transparent about the events concerning the potential contamination (Kimes, 2010).

This was in high contrast to the way in which the criminal activity of the perpetrator who was lacing Tylenol with cyanide in 1982 was handled by CEO Bill Weldon. Welding chose to be upfront and worked with the public and law enforcement in order to protect the public and tries to discover who had contaminated his products after seven people died. Even though the recall was expensive, costing the company $100 million, the reputation of Johnson & Johnson was preserved. Bill Weldon is still the CEO of Johnson & Johnson but in this case had been behind closed doors and not discussing the current issues at the McNeil plant (Kimes, 2010).

In 2013 the company had to recall Risperdal Consta which is marketed under their pharmaceutical unit called Janssen. Risperdal Consta is an injectable treatment for psychosis and the batch that was recalls was discovered to have evidence of mold which was found through routine testing. 200,000 bottles of liquid Motrin for infants was recalled a week earlier when tiny particles of plastic were discovered in the medication. Both of these products are made by outside companies and then distributed by Janssen, a division of Johnson & Johnson (Thomas, 2013).

There was speculation by industry analysts that these two recalls which occurred in such a short period from another once again raised questions about whether or not the company was providing appropriate oversight in manufacturing. In recent years, Johnson & Johnson has had to recall not only the drugs that have been mentioned, but also contact lenses and artificial hips. The only reason that the company is continuing to operate is because it has promised the FDA that it would create a distinct and substantive changes in three of its manufacturing plants. According to Eric Gordon who is an expert in the pharmaceutical industry and teaches business at the University of Michigan, Johnson & Johnson has clearly not repaired its quality control infrastructure and has yet to implement a useful quality control system (Thomas, 2013).

Problems have not been limited to the United States. In May of 2013 children’s Tylenol was recalled in South Korea because the acetaminophen was too high. In Latin America, Asia, and Europe, birth control pills released by the company had hormones that were not releasing from the pills properly into the body. In 2013 blood glucose meters and personal lubricant KY Jelly were also subject to a recall. In defense of Johnson & Johnson, John Gray is an associate professor at the Fisher College of business at Ohio State University stated that “Maybe a company under less scrutiny would choose to wait these out as opposed to issuing a voluntary recall” (Thomas, 2013). The small particles of plastic in the Motrin infant drops and the mold in the injectable antipsychotic were both without incident and likely not harmful (Thomas, 2013). Although the reputation of Johnson & Johnson has been diminished by the recalls of the last five years, it is clear that they are on a campaign to make sure that no further problems happen which means that they are very careful when contamination occurs.

Opportunities for Improvement

The reputation of Johnson & Johnson may have been damaged by the recall and the subsequent cover-ups that occurred during the time of the contamination. The brand is very strong and still remains one of the most trusted product brands despite the problems that occurred with some of its products. The brand has been in existence for over 100 years and through a sterling reputation with the production of such products as Band-Aids, baby shampoo, and Tylenol, the company is not likely to go under because of these current events. The following opportunities are a list of actions that can be taken in order to improve brand reputation at this point after the issues from the McNeil plant:

1. The first opportunity confronting the company would be to properly respond to its mistakes, and own up to the quality process problems/breakdowns. An important part of this trust would be to build higher levels of continued transparency.
2. A part of quality would include reestablishing trust with consumers, the general public, and other related entities. It is possible that a public relations program that outlines their caution were products are concerned as well as their commitment to high-quality standards would help repair the relationship with consumers.
3. Getting back to what built the stellar reputation (J&J) established with the Six Sigma process, as the (CEO) stated, his actions are to undergo a comprehensive overhaul; buying new equipment, replacing leadership, and reorganizing the quality-control department.

Controlling the reputation with the public is a completely different issue than controlling the quality of what comes out of their manufacturing plants. Part of the problem appears to be decentralized organization in terms of manufacturers behave within the system. It would appear that the way in which to address this problem would be to develop stronger systems of management over quality-control in a more centralized system.

Recommendations

Johnson & Johnson has already applied the Six Sigma quality process, but it is clear that an overhaul still needs to be accomplished. A recommended quality management initiative would be to combine Six Sigma processes with total quality management. There is a daily struggle between production management and quality control management. There is a consistent and ritualistic battle between how the job isn’t done and what are the jobs been done correctly. In many ways, this battle is a waste because this is about detecting problems with quality rather than preventing problems with quality. The Six Sigma concept is based on the idea of prevention of problems and creating processes which limit the number of defective problems in production. As well, total quality management is also concerned with prevention rather than detection. The question that should be at the forefront of quality control and production control is “are we capable of doing this job correctly?” (Oakland, 2014, p. 12). The first question that Johnson & Johnson needs to answer is whether or not the plants that they have are capable of doing the job correctly. If they are not, then new equipment and new processes need to be implemented in order to create control over quality.

One way in which total quality management is different than Six Sigma is that it is user driven. The concepts behind TQM involve the people who are drug responsible for the creation of the product. Ideas for improvement come from those with the expertise and experience in using the processes and activities that are creating the product. TQM is highly adaptable to training and follow-up which means that everyone who comes after those with the appropriate experience will benefit from those experiences. Total quality management intends to change attitudes and skills so that there is a revolution in the culture of the manufacturing environment (Oakland, 2014).

Combining the measures and methods of Six Sigma through independent quality management with total quality management controls within the environments of manufacturing will provide for a double system of process in which outside observation and internal observation combine in order to create higher levels of quality. Knowledge management and total quality management are concepts on which Hung, Lien, Fang, & McLean (2010) have studied in terms of a relationship which can benefit a corporation. Because Johnson & Johnson is a company that relies on innovations in the medical field, it is important that knowledge management in total quality management is used in order to accomplish the goals that the company intends. Hung Lien, Fang and McLean (2010) found a positive correlation between knowledge management and total quality control, suggesting that knowledge management with the key to innovation with total quality management been the hinge between the two. Therefore, using total quality management along with Six Sigma processes is going to not only increase the quality of the products that are being released by the company, but it is going to encourage innovation as solutions to problems are presented both internally and externally. Through creating both internal and external quality-control, complacency can be mitigated and innovation can rise.

The problem that occurred was Johnson & Johnson is that they used one type of process quality control for an extended period of time that eventually began to become ineffective. Complacency comes when consistency in the use of something begins to diminish the effectiveness of its use. Because there was an assumption that Six Sigma was working to create quality process control, complacency allowed for a lack of control to actually exist. Johnson & Johnson needs to overhaul their processes as well as the individual plants where problems are taking place so that future problems can be mitigated before they actually occur. The goal of Six Sigma is to eliminate defects, but this has not been occurring at Johnson & Johnson so therefore they need to make sure that not only Six Sigma is continued to be used, but other processes such as total quality control are implemented in order to increase the level of control established.

Quality and Total Quality

One of the important parts of improving the quality control of Johnson & Johnson will be making sure that appropriate measurement and assessment takes place. Oakland (2014) writes that “the key to successful performance measurement at the process level is the identification and translation of customer requirements and strategic objectives into an integrated set of process performance measures” (p. 138). Measurement needs to be used with the intention of improving performance. This will mean that in the manufacturing plants, the goal will be to get below 3.4 per million defects in the product. The only way to do this is to ensure that all of the processes are refined to the point where mistakes rarely if ever happen.

The four top philosophers in the field of quality are W. Edward Deming, Joseph M. Juran, Armand, V. Feigenbaum, and Philip B. Crosby. While they have different ideas about how to get to quality, one thing they all agreed about was that quality was the first principle in competitiveness. Quality needs to be addressed to strategic importance and through investing in top management whose primary concern is quality. Although they all had different ideas about defining quality, quality was most often considered consistent, defined, and developed through prevention rather than detection (Kelada, 1996). Through developing a system in which detection is no longer the goal and prevention is the highest priority, Johnson & Johnson will be able to improve their systems and in turn improve their relationships with consumers.

The concept of continuous improvement needs to be at the core of how Johnson & Johnson improves their processes in the manufacturing divisions. Without continuous improvement, stagnation can lead to problems which developed defects in the product. Continuous improvement usually leads to innovation, which connects back to the concept of knowledge management and total quality management as methods towards innovation. Every business needs to continue to improve in order to compete. Although it is common for companies to want to rely on innovative marketing as a method of competition, improved quality and higher levels of product quality are also effective and meaningful as a method of competition (Oakland, 2014).

Conclusion

Johnson & Johnson, Incorporated have had a century of experience in the health industry. Most of the products that they provide are standards in the industry. The company on the whole has a great track record and it is only been recently that the number of manufacturing problems has begun to mar that reputation. All companies that exist for long time tend to stagnate at some point and their processes need to be reinvigorated. Through developing new quality processes through their existing Six Sigma quality process and incorporating total quality management ideals into the manufacturing process, the company will be able to develop a system that is both internally and extra only influence. This will mean that the expertise of those on the inside of the process can be utilized to improve quality just as much as oversight from people outside of the process eliminates bias where the pressure to perform can sometimes overtake the needs to have high-quality. Johnson & Johnson will likely survive his latest problems because of their long-standing relationships with consumers, but if they continue to have quality problems is possible that their long-standing position in the medical industry could be harmed.

References

• Hung, R. Y. Y., Lien, B. Y. H., Fang, S. C., & McLean, G. N. (2010). Knowledge as a facilitator for enhancing innovation performance through total quality management. Total Quality Management, 21(4), 425-438.
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• Kelada, J. N. (1996). Integrating reengineering with total quality. Milwaukee, WI: ASQC Quality Press.
• Kimes, M. (19 August 2010). Why J&J headache won’t go away. CNN Money. Retrieved from https://money.cnn.com/2010/08/18/news/companies/jnj_drug_recalls.fortune/index.htm
• Kumar, D. (2006). Six sigma best practices: A guide to business process excellence for diverse industries. Ft. Lauderdale, FL: J. Ross Pub.
• Oakland, J. S. (2014). Total Quality Management and Operational Excellence: Text with Cases. Routledge.
• Pande, P. S., Neuman, R. P., & Cavanagh, R. R. (2000). The Six Sigma way: How GE, Motorola, and other top companies are honing their performance. New York: McGraw-Hill.
• Johnson  Johnson company profile (2000) (Johnson Johnson company profile 20140401)ReRRRReuters. (2014, April 1). Johnson & Johnson, Inc. company profile. Retrieved May 19, 2014, from https://www.reuters.com/finance/stocks/companyProfile?symbol=JNJ.N
• Thomas, K. (12 September 2013). New recalls by Johnson & Johnson is concerned about quality control improvements. The New York Times. Retrieved from https://www.nytimes.co m/2013/09/13/business/new-recalls-by-johnson-johnson-raise-concern-about-quality-control-improvements.html?adxnnl=1&adxnnlx=1403211687-ZPX/VzWcRVNTjafmHNIr9Q