Creating a Competitive Advantage through Sourcing

Speaker:Vasco Grilo, VP, Global Pharma R&D Sourcing, JOHNSON & JOHNSON

Very little reference that needs to be done internally in order to create these models in order to enhance the roles of suppliers. There are tremendous opportunities of developing strong relationships with suppliers. This is key for internal reliance with business partners. Once you have the support of the internal stake holders, you have to look at your supplier base. The tools to segment the supply base are important. J&J uses several – growth focused, risk management, Segment relationship value, which is how suppliers understand them. Are we really a customer of interest for the supplier and can they ever establish a real relationship with the supplier while also looking at the commodity market, certain commodities are strategic, some are critical. What does a strategic relationship look like? Key characteristics: assurance of supply (joint balance of power), quality (quality improvement council), service (supply chain optimization), cost/value (supply chain optimization) and innovation (first choice of new supplier in new product development). You can only do this with a certain number of suppliers.


It’s about compliance. Once you go through the relationships and capture the benefits from the suppliers. This is a key area of work for Johnson and Johnson. What are the opportunities? Identify Assumptions that must bear true, pressure test assumptions, and invest and implement.



How do you value innovation form a supplier? In terms of the ability of a particular supplier, a supplier might come forward with a new model for supply chain logistics. That might not necessarily be seen on an R&D budget. Where is it touching? Sometimes on the top line. Can you get this faster in the market? Segmentation: businesses cases or historical innovation: which stage of the process?

Updated:

Here is a short clip from this presentation