http://www.jnj.com/connect/partners/suppliers?pageNo=2
http://www.epa.gov/smartway/
http://www.epa.gov/smartway/
http://www.epa.gov/smartway/
Johnson & Johnson - Index
Johnson & Johnson - report - Index
Q:
How do you gain a sense of comfort that your
external manufacturers are acting responsibly?
MCGRANAGHAN: We are using a combination of site visits,
questionnaires and assessments. It’s our goal that 100 percent
of our EMs will be in conformance with the Standards by
2010. At the end of 2007, we had evaluated nearly 20 percent
of our EMs. For the more mature aspects of our Standards
(such as EHS, quality and the employment of young people),
we have a high level of confidence that our EMs are in
conformance. But, as we are just starting to collect data
around labor and ethics, we are not yet able to report our
progress towards full Standards conformance.
I want to make a point about the challenges in this whole
area. Every day, it seems we hear news of corporations that
have encountered a problem that traces back into the supply
chain. It’s extraordinarily difficult to have full comfort due
to the complexity of global supply chains these days. Our
own mix of EMs can change from year to year, and even with
our assessments, they are just a point-in-time perspective.
On top of logistical challenges, assessment practices need
to be adapted for differences in social norms that vary by
country and by culture.
You mentioned environ-
Q: mental issues; can you give
some examples of how they are
reflected in the supply chain?
MCGRANAGHAN: I’ll mention two
areas — purchasing forest products
and understanding the carbon
footprint of our supply chain. Our
Forest Products Purchasing Guidelines
(see our website) are relatively new.
We issued them in 2006. They were
designed to help our business and
procurement professionals make
decisions on paper products and
paper-based packaging in alignment
with our environmental and sustainable
forestry goals. The guidelines
recognize the need to understand the
source and content of each product
and, if that source appears high-risk,
to verify its legality. We recommend
that our business and procurement
professionals seek products with more than 30 percent
recycled content, products with fiber from certified forests,
and products manufactured with chlorine-free processes.
At this early juncture, our more than 250 operating companies
are at many different stages along the implementation
path. Befitting the operating freedom that is characteristic of
Johnson & Johnson’s decentralized business model, the guidelines
for forest product purchasing are broad enough to allow
flexibility in application across our operating companies.
What’s going on relative to the carbon footprint
of your supply chain?
MCGRANAGHAN: We have begun partnering with our Global
Energy group to address an issue that is just cresting the
horizon — how to measure and manage the carbon footprint
of our external manufacturers and our products. We routinely
account for the environmental impact of our own facilities
and those we lease. However, at this point, we don’t capture
information from our suppliers to account for the portion
of their emissions that result from the manufacture of our
products. Parenthetically, few large companies do; it’s quite a
difficult task. It’s our hope, moving forward, to encourage our
suppliers to be transparent about their own carbon emissions.
What is the Company doing regarding
transportation of its goods?
MCGRANAGHAN: The Global Transportation Organization
(GTO), a division of the Johnson & Johnson Sales and
Logistics Company, LLC that handles shipping for our three
business segments, is participating in the U.S. Environmental
Protection Agency’s SmartWay
program. SmartWay is a voluntary
collaboration to increase transportation
energy efficiency while significantly
reducing greenhouse gases and air
pollution. GTO’s accomplishments
have been pretty impressive. First, in
the U.S. and Canada, they increased
the amount of business shipped by
rail, instead of by truck, by 18 percent
from mid-2006 to year-end 2007,
thereby decreasing net emissions.
Second, they began encouraging
carriers to become SmartWay
shippers, and used SmartWay
participation as a factor in the
selection of carriers. In 18 months,
GTO increased the amount of
business awarded to SmartWay
carriers by 30 percent. GTO gave
73 percent of its business to
SmartWay carriers in 2007. In
partnership with GTO, the Sales and
Logistics Company has reduced
the total number of truck shipments
by more efficiently utilizing trucks and filling trailers.
There is a very exciting technology that has also resulted
in remarkable emission reductions. Carriers are retrofitting
their trailer trucks with double-wide tires, which reduce the
number of tires from 18 to 10 and correspondingly boosts the
truck’s fuel efficiency. One household-name carrier GTO is
helping to become SmartWay-certified has increased its truck
miles per gallon to 7.1 from 6.1 through installing doublewide
tires and speed governors on its trucks. In the trucking
industry, that translates into direct reductions in fuel costs
and associated CO 2 emissions.
20 JOHNSON & JOHNSON 2007 SUSTAINABILITY REPORT
Q:
Q:
“We have begun
partnering with our
Global Energy group
to address an issue
that is just cresting
the horizon — how
to measure and manage
the carbon footprint
of our external
manufacturers and
our products.”