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Johnson and Johnson CEO Again Reaching Out to the Financial Press- Is This Enough?

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We noted in our Q1-2011 quarterly newsletter that throughout 2010, the most visible occurences of supply chain disruption and lack of supply chain risk mitigation concerned healthcare and medical products provider Johnson & Johnson.  A company that had a previous stellar reputation for quality and rapid response to crisis sadly lost its way with little public evidence of broad management accountability and response. The CEO of Johnson and Johnson, William Weldon, conducted yet another interview which was published in Monday’s Financial Times. (paid subscription or free preview account required)  In the interview, Mr. Weldon stressed that all divisions were performing strongly with previous issues of quality controls now taken in hand.  Mr. Weldon further indicated to FT that he has taken on personal responsibility to oversee the resolution of quality issues and FDA oversight with products made at three separate production facilities.  The article quotes Mr. Weldon, “I think we […]


Qantas and Rolls-Royce Monetarily Settle Over Mid-Air Aircraft Engine Failure Incident

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An announcement today adds another dimension to last November’s mid-air explosion involving a Qantas Airbus A380 superliner equipped with a Rolls Royce Trent aircraft engine that could have resulted in a large loss of life without the actions of a well-trained flight crew. Qantas announced today that is has reached a 95 million Australian dollar ($100 million USD) confidential settlement with Rolls-Royce to cover the airline’s disruption costs.  Readers may recall our previous Supply Chain Matters February commentary regarding monetary quantification of the engine failure incident caused by a suspected manufacturing defect.  With this announced settlement with Qantas, the Rolls-Royce costs are now at $190 million, including nearly $90 million in 2010 direct costs incurred by Rolls in directly dealing and responding to this one incident. A statement from Rolls-Royce indicates it expects “some small additional costs” in 2011. Rolls currently holds a 65 percent market share among the combined […]


Floods Impact Southern China

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Many days of torrential rains are affecting millions of people across six different provinces of southern China including Guangdong province.  According to a report in the China Daily, the floods have cut-off roads, breached dikes, caused mudslides and multiple deaths. Flash floods forced nearly 1,000 enterprises to suspend production within Zhejiang province.  Many airline flights at airports such as Shanghai have been cancelled or delayed. The flooding has been described as the worst in decades, similar to what has been reported in the U.S. Midwest and Mississippi River region.  Farmers have been severely impacted and the Xinhua news agency reports that annual vegetable production may have been impacted by as much as 20 percent, which is not good news for China’s consumers.  There was already widespread concern regarding the rising cost of food prices and associated inflation and these floods could add more increased price pressures for food and staples. […]


China Imposes Prison Terms in iPad Value Chain Information leak

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In case you might have missed the Wall Street Journal report last week (paid subscription may be required) a Chinese court sentenced three people to prison terms for collaborating to steal information from a supplier to Apple’s iPad2 products. In this case, the head of a Chinese electronics accessories manufacturing firm Shenzhen MacTop Electronics Co. allegedly paid a former employee of Hon Hai Precision Industry research and development employee for information relative to the iPad2 back cover, in order to get a jump on producing protective cases for this device. Xiao Chengsong was sentenced to 18 months in prison and fined 150,000 yuan. Lin Kecheng, the former Hon Hai employee was sentenced to 14 months in prison and fined 100,000 yuan. Supply Chain Matters has commented often on the secrecy surrounding Apple’s vale-chain and how any and all information leaked from various nodes of Apple’s supply chain are often valuable […]


Impressions from the MIT Crossroads 2011 Forum

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Last week I had the opportunity to attend the Crossroads 2011 conference which was sponsored by the MIT Center for Transportation and Logistics, a very visionary forum in researching and predicting the future of global supply chains.  The goal of Crossroads 2011 was for select MIT faculty to outline the disruptive innovations that could shape the future of global supply chains and the talks were fascinating. The presentations addressed ultra-low power design technology and self-powered applications, personal health devices, advanced robotics, alternative energy and other technologies. While some attendees may have questioned the overall timing and disruptive tendencies of these technologies, they were certainly fascinating and made one think about the notion that technology marches forward, even if we are sometimes not ready to embrace its implications. One presentation that especially captured my interest was that delivered by Dr. Joseph Coughlin, Director of the Age Lab at MIT.  Dr. Coughlin’s […]


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