Posted By Jeff Moad, March 11, 2015 at 11:59 AM, in Category: The Adaptive Organization
Pharmaceuticals giant Johnson & Johnson this week agreed to plead guilty to a misdemeanor and pay a small fine to settle legal charges stemming from an embarrassing series of quality problems and management shortcomings that affected consumers of some of the company’s most popular products for infants and children.
J&J clearly hopes that the plea deal—under which it will pay a $20 million fine and forfeit an additional $5 million--will allow it to lay to rest the series of quality-related errors which started six years ago and saw the company ship doses of products—including Motrin for infants and children—which had been adulterated. The discovery and subsequent J&J actions led to an investigation by the FDA and the closing of the J&J plant in Fort Washington, PA, where the adulterated products were produced. (The plant remains closed.)
A J&J official statement said the agreement “fully and finally resolves the federal government’s investigation and closes a chapter on action that led the company to review and significantly improve its practices.”
While J&J hopes the settlement closes the book on the episode, it’s worth asking what would happen if J&J—or any other consumer goods manufacturer—faced a similar situation today in the era of pervasive social media.
Back in 2009, when J&J’s Motrin problems began to surface, the company’s initial instinct appeared to be to hide the problem, perhaps to avoid a recall. In subsequent Congressional testimony, former CEO Bill Weldon acknowledged the company had engaged in a “phantom recall” in which it allegedly hired consultants to remove products from store shelves rather than ordering a formal recall.
The FDA investigation also found that J&J failed to initiate a Corrective Action/ Preventive Action Plan—as required by good manufacturing practices—as soon as the problem was discovered.
Today, however, it would be much more difficult for J&J or any other company to pursue such an avoidance strategy in similar circumstances. That’s because, the minute consumers started noticing “black specks” in the bottom of their children’s medicine bottles—it was later identified as nickel-chromium-rich material—many of them would instantly post their concerns on social media. That would provide an early warning not just to consumers but also to the manufacturer.
In fact, growing numbers of manufacturers are using social media monitoring and Big Data Analytics tools to continually assess consumer sentiment and to get a jump on potential quality problems—or the perception of quality problems. By combining that “voice of the customer” analysis with advanced analysis of data streaming off of plant production equipment, manufacturers increasingly are able to spot problems earlier and track down their point of origin faster. (For more on this, see the upcoming April issue of the Manufacturing Leadership Journal. http://gil-evetnts.gilcommunity.com/journal/ )
Particularly in markets such as automotive where full recalls can be devastatingly expensive, the social media-inspired opportunity for manufacturers to respond early and openly to potential quality problems could prove much more effective than the kind of government regulation that proved ineffective in the J&J case.
Of course, that assumes a culture that is prepared to listen and quickly respond to its customers.
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit