Executive Appointments at Johnson and Johnson Reflect on Mitigating Quality Incidents

The aftereffects of intense scrutiny given to Johnson and Johnson’s efforts to address and mitigate its significant manufacturing quality problems have had some new twists in December.  Earlier this month the company promoted two senior executives in what is being termed as a race to succeed William Weldon, the current Chairman and CEO of the company. Sheri McCoy, who headed J&J’s pharmaceutical business unit, and Alex Gorsky, who headed the medical devices and diagnostics division, were both named vice-chair in the office of the Chairmen. Appointment of potential successors is not new in J&J corporate culture, and at face value, provides a means of proactive successor management.

The implications for addressing and mitigating quality breakdowns, however, lie within the new responsibilities given to each of these elevated executives.  Mr. Gorsky is reported to be given responsibility of the new company-wide manufacturing and supply chain group tasked with addressing and mitigating all manufacturing quality issues. Ms McCoy gains oversight of the consumer business unit that includes the McNeill Consumer Healthcare division, the center of previous problems and plant shutdown.

We trust that both of the elevated executives have the motivation to put personal competitive instincts aside and come together with a unified plan of action and executive commitment to address significant manufacturing issues. Some could argue that having a single executive in-charge of both process remediation and the implications for business decision-making makes for clearer action and accountability. That role apparently remains with chairmen and CEO Weldon who must continue to directly answer for any further incidents.

There was a further development in the most recent recall of certain Rolaids antacid  products due to suspected foreign materials in the product.  The incoming chairman of a U.S. congressional committee probing J&J’s series of product recalls has called for regulators to expand inspections to the contract manufacturer involved in manufacturing the Rolaids product.  The contract manufacturer was identified as BestSweet Inc. of Mooresville North Carolina.  J&J’s McNeill Consumer unit had previously declined to publically name this contract manufacturer. BestSweet is noted as a supplier of cough drops and soft chew tablets for various private store brands, including CVS Caremark Corp. and Walgreens, and the congressional committee wants to determine if the FDA has any history of citings or incidents concerning BestSweet.

As we often observe in product recall incidents, the downstream supply chain implications are often the ones initially overlooked by regulators and the traditional media.

More news concerning J&J will surely come in 2011, and we trust it will be more positive in nature.

Bob Ferrari

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