19MBA115 Prateeksha G P

KLE SOCIETY’S
INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI
(Affiliated to Karnataka University, Dharwad &

Recognized by AICTE, New Delhi)
A PROJECT REPORT ON
“A STUDY ON INVENTORY MANAGEMENT OF JOHNSON & JOHNSON”
SUBMITTED TO
KARNATAK UNIVERSITY, DHARWAD

Towards Partial Fulfillment of Requirements for the Award of
MASTER OF BUSINESS ADMINISTRATION
DURING THE ACADEMIC YEAR 2019-2020
SUBMITTED BY
PRATEEKSHA G
PRABHUSWAMIMATH
MBA II SEMESTER
REG. NO: 19MBA115
Name of the Guide

NITIN M BHASKER
ACKNOWLEDGEMENT
It is a matter of great pleasure to acknowledge those personalities who have inspired, guided and
contributed immensely in bringing out this Project Report.
I express my sincere thanks to our Director Dr. P. B. Roodagi KLES’s IMSR, Hubli for giving
me an opportunity for learning.
I wish to take this opportunity to express my deep sense of gratitude to NITIN M BHASKER
for his valuable guidance in this Endeavour. He has been a constant source of inspiration. I
sincerely thank him for his suggestions and his help in successfully completing my project
report.
I would like to thank to my parents, my teaching and non-teaching faculties, my friends and all
those who have helped me directly or indirectly for the completion of this project work.
Date: 31/07/2020 Prateeksha G Prabhuswamimath

Place: Hubli MBA II Semester
DECLARATION
I, PRATEEKSHA G PRABHUSWAMIMATH, hereby declare that this project report entitled

“A STUDY ON INVENTORY MANAGEMENT OF JOHNSON & JOHNSON” has been
prepared by me during the year 2019-2020, under the guidance of Prof. NITIN BHASKER,
Faculty, KLE’s Institute of Management Studies and Research, Hubli. The project is towards
partial fulfillment of requirement for the award of Master of Business Administration Karnataka
University, Dharwad.
I confirm that this report truly represents my work undertaken as a part of my Summer In-plant
Project (SIP) this work is not a replication of work done previously by any other person. I also
confirm that the contents of the report and the views contained therein have been collected and
presented by me.
Date: 31/07/2020 PRATEEKSHA.G.

Place: Hubli PRABHUSWAMIMATH
Roll No: 19MBA115
INDEX
Sl.NO. Content Page No.
1 Executive Summary 1-5
2 Industry Profile 6-11
3 Company Profile 12-44
4 Introduction to Study 45-58
5 Research Methodology 59-61
6 Data Analysis and Interpretation 62-78
7 Findings 79-81
8 Suggestions 82
9 Conclusion 83-84
10 Annexure 85-86
11 Bibliography 87
JOHNSON AND JOHNSON
EXECUTIVE Page 1
SUMMARY
KLE Society’s Institute of Management Studies and Research, Hubli Page 1

JOHNSON AND JOHNSON
INTRODUCTION TO THE STUDY:

The project is very important part of MBA Program it gives the students the platform
to apply the theory into practical business situations. I have chosen the Finance as the
area of my major project. In Finance, exclusively I have selected INVENTORY
MANAGEMENT as the topic for the study. To do the project and learn about
inventory management I have selected an organization ― JOHNSON & JOHNSON
This project is carried at JOHNSON & JOHNSON COMPANY. Johnson & Johnson,
we believe good health is the foundation of vibrant lives, thriving communities and
forward progress. That’s why for more than 130 years, we have aimed to keep people
well at every age and every stage of life. Today, as the world’s largest and most
broadly based healthcare company, we are committed to using our reach and size for
good. We strive to improve access and affordability, create healthier communities,
and put a healthy mind, body and environment within reach of everyone, everywhere
The purpose of the project is to understand and analyze the present inventory
management system practiced in the company. And also to find new strategy tools to
control inventory that.have evolved over time. Inventory refers to the stockpile of the
products that firm would sell in future in the normal course of business and the
components that makes up the product.
Inventory includes raw materials, work in process and finished goods.
The management of inventory is different from the management of other current assets
in the virtually all the functional areas involved. The job of the financial manager is to
reconcile the conflicting viewpoint of the various functional areas regarding the
appropriate inventory level.
Inventory management is a very important function that determines the health of the
supply chain as well as the impacts the financial health of the balance sheet. most of
the organizations have a separate department or job function called inventory planners

JOHNSON AND JOHNSON
who continuously monitor, control and review inventory and interface with production,
Inventory is an idle stock of physical goods that contain economic value, and are held in
various forms by an organization in its custody awaiting packing, processing,
transformation, use or sale in a future point of time.
Any organization which is into production, trading, sale and service of a product
will necessarily hold stock of various physical resources to aid in future
consumption and sale. While inventory is a necessary evil of any such business, it
may be noted that the organizations hold inventories for various reasons, which
include speculative purposes, functional purposes, physical necessities etc.
TITLE OF THE PROJECT:
OBJECTIVES OF THE STUDY:
➢ To understand the inventory management technique adopted by JOHNSON &

JOHNSON.
➢ To understand different concepts related to Inventory Management.
➢ To analysis the effective use of inventory using ratio technique.
➢ To study the impact of inventory on the company’s performance.
NEED FOR THE STUDY:
A firm should have an adequate level of investment in inventories of raw materials,

work in progress and finished goods. The investments are neither inadequate nor
excessive. It should just be enough to sustain the production and sales activities. To
ensure adequate levels of inventories continuous monitoring and control of
inventories level is called for this involves setting up of inventories levels observing

JOHNSON AND JOHNSON
actual moment of inventories. This entire spectrum of activities is called as inventory

management or control.
At the same time, to ensure continuous production adequate levels of raw material and
work in progress are necessary. Inadequate levels affect the competitive position of
the company. Further, from the cost point of view, the unit is expected to produce
highest quality products at lower prices. The inventory control is one of the techniques
that can be used to achieve the grand objectives of producing the products at lower
cost.
SCOPE OF THE STUDY:
▪ This study is to find the facts and opinions of inventory management and control at
JOHNSON & JOHNSON.
▪ This study gives the brief information about the inventory management at JOHNSON &
JOHNSON.
RESEARCH METHODOLOGY:
Research Type: - Quantitative Research
Research Instrument: - Company Balance sheet and Profit and loss Account
Data Collection:-
Secondary Data:
Balance
Sheet
Company
Records
Internet and Website of the company

JOHNSON AND JOHNSON
FINDINGS:
From the study conducted at Johnson & Johnson. The following findings were observed:
▪ The graph-1 depicts that the inventory turnover ratio of the firm is being increasing trend
which is good for the company. In the year 2010 the ratio is increased to 3.55.
▪ The work –in-progress ratio in the year 2010 was 3.55, in the 2019 it has been decreased
to 3.12, in further year it was increased from 2.69 to 3.12. The above graph shows that
company is showing good performance.
▪ From the study of raw material conversion period we can observe that there is an
improvement in efficiency of control and adequate supply of material.
SUGGESTIONS:
▪ It is also suggested that to company the inventory conversion period should decrease
which help to make constant growth of the company.
➔ We see that the inventory conversion period constantly increased from 2010 to
2015 due to long holdings of inventory, since 2016 it has been reduced which
seems the company has focused on reducing the long holding period of inventory.
CONCLUSION:
▪ Inventory management is a vital function that helps and ensures the success of
manufacturing companies. Successful implementation of inventory will improve the
entire business significantly.
▪ JOHNSON & JOHNSON Limited enjoys a good stand in the global market and it has
continued to adopt changes to face competition in the market. The production and supply
procedures adopted at Johnson & Johnson are standard one.
▪ By Findings and Suggestions it reveals that the company has having good Inventory
Management. It has fully computerized inventory documents so it is more efficient and
effective tool.

JOHNSON AND JOHNSON
INDUSTRY
PROFILE

JOHNSON AND JOHNSON
Johnson & Johnson, incorporated on November 10, 1887, is a holding company. The Company
and its subsidiaries are engaged in the research and development, manufacture and sale of a
range of products in the healthcare field. The Company operates through three segments:
Consumer, Pharmaceutical and Medical Devices. The Company's primary focus is on products
related to human health and well-being. The Company's subsidiaries operated 119 manufacturing
facilities, as of January 1, 2017. The Company's research facilities are located in the United
States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands,
Singapore, Switzerland and the United Kingdom. The Company has over 230 operating
companies, which conduct business around the world.
SEGMENTS
Consumer:
The Consumer segment includes a range of products used in the baby care, oral care, skin care,
over-the-counter pharmaceutical, women's health and wound care markets. The baby care
category includes the JOHNSON'S line of products. Its oral care category includes the
LISTERINE product line. Its brands in the beauty category include the AVEENO, CLEAN &
CLEAR, DABAO, JOHNSON'S Adult, LE PETITE MARSEILLAIS, NEUTROGENA, RoC
and OGX product lines. The over-the-counter medicines category includes the family of
TYLENOL acetaminophen products; SUDAFED cold, flu and allergy products; BENADRYL
and ZYRTEC allergy products; MOTRIN IB ibuprofen products, and the PEPCID line of
heartburn products. Its brands in the women's health category outside of North America are
STAYFREE and CAREFREE sanitary pads, and o.b. tampon brands. Its wound care brands
include the BAND-AID Brand Adhesive Bandages and NEOSPORIN First Aid product lines.
These products are marketed to the general public and sold both to retail outlets and distributors
across the world.

JOHNSON AND JOHNSON
Pharmaceutical:
The Pharmaceutical segment is focused on five therapeutic areas, including immunology

(rheumatoid arthritis, inflammatory bowel disease, psoriasis and pulmonary diseases), infectious
diseases and vaccines (human immunodeficiency virus (HIV), hepatitis, respiratory infections,
tuberculosis and vaccines), neuroscience (Alzheimer's disease, mood disorders and
schizophrenia), oncology (prostate cancer, hematologic malignancies and lung cancer), and
cardiovascular and metabolic diseases (thrombosis and diabetes). The segment's products are
distributed directly to retailers, wholesalers, hospitals and healthcare professionals for
prescription use. The Pharmaceutical segment offers products, such as REMICADE (infliximab),
a treatment for various immune-mediated inflammatory diseases; SIMPONI (golimumab), a
subcutaneous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic
arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative colitis;
SIMPONI ARIA (golimumab) an intravenous treatment for adults with moderate to severe
rheumatoid arthritis; STELARA (ustekinumab), a treatment for adults with moderate to severe
plaque psoriasis and active psoriatic arthritis; PREZISTA (darunavir), EDURANT (rilpivirine)
and PREZCOBIX/REZOLSTA (darunavir/cobicistat), which are used for the treatment of HIV-1
in combination with other antiretroviral products, and CONCERTA (methylphenidate HCl)
extended-release tablets CII, which are used for the treatment of attention deficit hyperactivity
disorder.
The Company also offers various products, such as INVEGA (paliperidone) extended-release
tablets, for the treatment of schizophrenia and schizoaffective disorder; INVEGA
SUSTENNA/XEPLION (paliperidone palmitate), for the treatment of schizophrenia and
schizoaffective disorder in adults; INVEGA TRINZA/TREVICTA (paliperidone palmitate), for
the treatment of schizophrenia in patients after they have been treated with INVEGA
SUSTENNA for at least four months; RISPERDAL CONSTA (risperidone long-acting
injection), for the treatment of schizophrenia and the maintenance treatment of Bipolar I
Disorder in adults, and VELCADE (bortezomib), a treatment for multiple myeloma for use in

JOHNSON AND JOHNSON
combination with rituximab, cyclophosphamide, doxorubicin and prednisone for the treatment of
adult patients with previously untreated mantle cell lymphoma. The Company's products in its
Pharmaceutical segment also include ZYTIGA (abiraterone acetate), a treatment for metastatic
castration-resistant prostate cancer; IMBRUVICA (ibrutinib), an oral, once-daily therapy
approved for use in treating certain B-cell malignancies or blood cancers, and Waldenstrom's
Macroglobulinemia; DARZALEX (daratumumab), which is used for the treatment of
relapsed/refractory multiple myeloma; PROCRIT (epoetin alfa), to stimulate red blood cell
production, and XARELTO (rivaroxaban), an oral anticoagulant for the prevention of deep vein
thrombosis (DVT), which leads to pulmonary embolism (PE) in patients undergoing hip or knee
replacement surgery, to reduce the risk of stroke and systemic embolism in patients with
nonvalvular atrial fibrillation, for the treatment and reduction of risk of recurrence of DVT and
PE. It also offers products, including INVOKANA (canagliflozin), for the treatment of adults
with type 2 diabetes; INVOKAMET/VOKANAMET (canagliflozin/metformin HCl), which is a
combination therapy of fixed doses of canagliflozin and metformin hydrochloride for the
treatment of adults with type 2 diabetes, and INVOKAMET XR (canagliflozin/metformin
hydrochloride extended-release), a once-daily, fixed-dose combination therapy of canagliflozin
and metformin hydrochloride extended-release, for the treatment of adults with type 2 diabetes.
Medical Devices:
The Medical Devices segment includes a range of products used in the orthopedic, surgery,
cardiovascular, diabetes care and vision care fields. The segment's products are distributed to
wholesalers, hospitals and retailers, and used principally in the professional fields by physicians,
nurses, hospitals, eye care professionals and clinics. It includes orthopedic products, general
surgery, biosurgical, endomechanical and energy products; electrophysiology products to treat
cardiovascular disease; sterilization and disinfection products to reduce surgical infection;
diabetes care products, such as blood glucose monitoring and insulin delivery products, and
disposable contact lenses.

JOHNSON AND JOHNSON
Future of the Industry:

Engineering the Future of Health
Johnson & Johnson leadership in the metal 3-D printing space allows Dr. Chip Tomonto to truly
develop personalized and customized medical solutions.
Building the Future of Health

Diane oversees Johnson & Johnson efforts to unleash the human potential by expanding the mind
and strengthening the body at the Human Performance Institute.
Designing the Future of Health

Listening to the concerns and needs of patients allow Sharon to pick up subtle nuances that
influence her designs – and eventually lead to improving the lives of others.
Reimagining the Future of Health

Discover how Roni Desai is contributing to the greater good by bringing her technology
expertise to Johnson & Johnson.
Coding the Future of Health

Learn how app developer Jackie Gaston is disrupting the IT industry.
Latest Innovation of the Industry:
Johnson & Johnson Innovation is committed to helping patients, our partners and communities
around the world manage the unprecedented impact of COVID-19.
Our response to COVID-19:
Since January, Johnson & Johnson has been working directly with governments, health
authorities and a range of companies and other stakeholders to mitigate and ultimately end the
COVID-19 pandemic. We have been:
• Collaborating to accelerate the development of a vaccine for COVID-19 and have

committed to providing a global supply of more than one billion doses

JOHNSON AND JOHNSON
• Screening antiviral molecules to determine if any could help treat those with the virus.
• Continuing to supply the critical medicines, devices and products customers and patients
depend on.
• Evaluating COVID-19 focused science and technologies outside our company and
providing support to start-ups who are actively exploring novel approaches to help
manage or end the pandemic.
• Supporting start-up residents in our JLABS incubators who are experiencing financial
hardship as a result of the COVID-19 outbreak.
• Taking precautions to support the safety and well-being of our employees, contractors
and the communities in which we live and work.
• Mobilizing to provide equipment, our products and financial donations to support

organizations and health care workers on the front lines.

JOHNSON AND JOHNSON
COMPANY
PROFILE

JOHNSON AND JOHNSON
J&J headquarters at One Johnson & Johnson Plaza in New Brunswick, New
Jersey
Type Public
Traded as NYSE: JNJ

DJIA Component
S&P 100 Component
S&P 500 Component
ISIN US4781601046
Industry Pharmaceutical
Medical devices
Consumer products
Founded January 1886; 134 years ago

New Brunswick, New Jersey, United States
Founders Robert Wood Johnson I

James Wood Johnson
Edward Mead Johnson
Headquarters One Johnson & Johnson Plaza,

New Brunswick, New Jersey
,
U.S.
Area served Worldwide

JOHNSON AND JOHNSON
Key people Alex Gorsky (Chairman and CEO)
Products See list of Johnson & Johnson products
Revenue US$82.059 billion (2019)[1]
Operating US$17.33 billion (2019)[1]

income
Net income US$15.119 billion (2019)[1]
Total assets US$157.73 billion (2019)[1]
Total equity US$59.47 billion (2019)[1]
Number of 132,200 (2019)[2]

employees
Subsidiaries Janssen Pharmaceutica

McNeil Consumer Healthcare
Vistakon[3]
Neutrogena
DePuy
Website www.jnj.com

JOHNSON AND JOHNSON
Johnson & Johnson is an American multinational corporation founded in 1886 that develops
medical devices, pharmaceutical, and consumer packaged goods. Its common stock is a
component of the Dow Jones Industrial Average and the company is ranked No. 37 on the
2018 Fortune 500 list of the largest United States corporations by total revenue. J&J is one of
the world's most valuable companies.
Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division
being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies
with operations in 60 countries and products sold in over 175 countries. Johnson & Johnson had
worldwide sales of $70.1 billion during calendar year 2015.[4] Johnson & Johnson's brands
include numerous household names of medications and first aid supplies. Among its well-known
consumer products are the Band-Aid Brand line of bandages, Tylenol medications, Johnson's
Baby products, Neutrogena skin and beauty products, Clean & Clear facial wash
and Acuvue contact lenses.
Johnson & Johnson is a global holding company that engages in the research and development,
manufacture and sale of a range of products in the healthcare field. The Company operates in

JOHNSON AND JOHNSON
three business segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer
segment includes a broad range of products used in the baby care, oral care, beauty, over-the-
counter pharmaceutical, women’s health, and wound care markets. The Pharmaceutical segment
is focused on the therapeutic areas of immunology, infectious diseases and vaccines,
neuroscience, oncology, and cardiovascular and metabolism, as well as pulmonary hypertension.
The Medical Devices segment includes a broad range of products used in the orthopedic,
surgery, interventional solutions, and eye health fields.
OUR COMPANY:
Caring for the world, one person at a time... inspires and unites the people of Johnson & Johnson.
We embrace research and science - bringing innovative ideas, products and services to advance
the health and well-being of people. Employees of the Johnson & Johnson Family of Companies
work with partners in health care to touch the lives of over a billion people every day, throughout
the world.
Our Family of Companies comprises:
• The world’s sixth-largest consumer health company

• The world’s largest and most diverse medical devices and diagnostics company
• The world’s fifth-largest biologics company
• And the world’s eighth-largest pharmaceuticals company
We have more than 250 operating companies in 60 countries employing approximately 116,000
people. Our worldwide headquarters is in New Brunswick, New Jersey, USA.
OUR CREDO:
We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers
and all others who use our products and services. In meeting their needs everything we do must
be of high quality. We must constantly strive to provide value, reduce our costs and maintain
reasonable prices. Customers' orders must be serviced promptly and accurately. Our business
partners must have an opportunity to make a fair profit.

JOHNSON AND JOHNSON
We are responsible to our employees who work with us throughout the world. We must provide
an inclusive work environment where each person must be considered as an individual. We must
respect their diversity and dignity and recognize their merit. They must have a sense of security,
fulfillment and purpose in their jobs. Compensation must be fair and adequate and working
conditions clean, orderly and safe. We must support the health and well-being of our employees
and help them fulfill their family and other personal responsibilities. Employees must feel free to
make suggestions and complaints. There must be equal opportunity for employment,
development and advancement for those qualified. We must provide highly capable leaders and
their actions must be just and ethical.
We are responsible to the communities in which we live and work and to the world community
as well. We must help people be healthier by supporting better access and care in more places
around the world. We must be good citizens — support good works and charities, better health
and education, and bear our fair share of taxes. We must maintain in good order the property we
are privileged to use, protecting the environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound profit. We must
experiment with new ideas. Research must be carried on, innovative programs developed,
investments made for the future and mistakes paid for. New equipment must be purchased, new
facilities provided and new products launched. Reserves must be created to provide for adverse
times. When we operate according to these principles, the stockholders should realize a fair
return.
ACHIEVEMENTS:
• In 1989, the Company was recognized as Outstanding Quality Company of the

Philippines jointly by the Philippine Productivity Movement and the Philippine Society
for Quality Control. Later, Johnson & Johnson Chairman Ralph S. Larsen would cite the
Philippine affiliate as “ahead of the pack among the Johnson & Johnson Family of
Companies” in quality improvement.

JOHNSON AND JOHNSON
• In 1991, Johnson & Johnson Worldwide conferred on the Philippine Company the
Johnson & Johnson Presidential Award for Safety in recognition of ten million man-
hours – approximately seven years of continuous operations – without a single workday
lost to accidents.
• That same year, the Company was also presented by Johnson & Johnson Worldwide with
Johnson & Johnson Worldwide Child Survival Program Award for its management of the
P10 million Johnson & Johnson grant to the United Nation’s Children Fund, or UNICEF,
for the Department of Health’s Child Survival and Maternal Care Program.
• Johnson & Johnson Philippines was awarded the 1992 Asian Management Award for
Outstanding Achievement in Operations Management conferred by the Asian Institute of
Management.
• In 1992, Johnson & Johnson Philippines was one of the eight affiliates to qualify for THE
SIGNATURE OF QUALITY® Award at the Commitment level. • In 1993, Johnson &
Johnson Philippines merited for the second year in a row, The SIGNATURE OF
QUALITY® Award, Commitment level. Following on its heels, Johnson & Johnson
honored its Philippine affiliate with the Entrepreneurial Excellence Award for
“outstanding growth and excellence in all aspects of the business” in light of its notable
achievements in the areas of profitability, market share, productivity, and quality
management.
• In 1994, the Company was awarded as the Outstanding Employer of the Year from the
Personnel Management Association of the Philippines (PMAP). In presenting the award,
the association commended the Company’s exemplary leadership and outstanding
programs “in the areas of labor relations, compensation, training and organizational
development which flourished under a participative work culture fostered by an open
management style.”
• In 1995, Johnson & Johnson Philippines had been recommended for THE SIGNATURE
OF QUALITY® Silver Award – only the second affiliate at the time to receive the honor.

JOHNSON AND JOHNSON
MISSION , VISION , VALUES AND OBJECTIVES
M Mission
Bringing science and sense of sight to
life through world-class innovation
and customer experience
V Vision
To help people see better,
connect better,
live better

JOHNSON AND JOHNSON
V Values
Growth & innovation, Investing in future, Global diversity, Citizenship
and sustainability, Developing diversity, and Global supply base.
O Objectives
Scientifically sound , High quality products and services to help heal ,
Cure disease and Improve the quality of life.

JOHNSON AND JOHNSON
HISTORY of Johnson & Johnson
Set up by three brothers back in 1886, Johnson & Johnson continues to keep evolving
Johnson & Johnson was founded over 125 years ago in the year 1886. However, it wasn’t until
1959 – 73 years and 2 major acquisitions later – that J&J developed its significant presence in
the pharmaceutical industry.
Where it all began

In 1886, three brothers – Robert Wood Johnson, James Wood Johnson and Edward Mead
Johnson – began the company, Johnson & Johnson, in New Brunswick, New Jersey in the United
States. It’s said that the Johnson brothers were inspired to start the business in order to create a
line of ready-to-use surgical dressings, after hearing a speech by antiseptic advocate Joseph
Lister, in 1885. Robert Wood Johnson served as the first president – the company became
incorporated in 1887 and throughout the nineteenth century, Robert worked to improve
sanitation practices.
“It’s said that the Johnson brothers were inspired to start the business in order to create a line of
ready-to-use surgical dressings…”
A year later, J&J pioneered the first commercial first aid kits, which were initially designed to
help railroad workers, but soon became the standard practise in treating injuries. In 1894, J&J’s
heritage baby business began, by the launch of maternity kits. These kits had the aim of making
childbirth safer for mother and babies. Johnson’s Baby Powder also went on sale during this year
and was extremely successful. Robert Wood’s granddaughter, Mary Lea, was the first baby to be
used on the baby powder label.
Between 1896 and 1897, J&J enabled a huge step forward for women’s health when it
manufactured the first mass-produced sanitary protection products.

JOHNSON AND JOHNSON
When Robert Wood died in 1910, his brother James Wood became president, before James’ son,
Robert Wood Johnson II became president in 1932.
One of J&J’s subsidiaries is Ethicon, which is a manufacturer of surgical sutures and wound
closure devices. It was incorporated as a separate company in 1949 so as to expand and diversify
the J&J product line. Following World War II, Ethicon’s market share in surgical sutures rose
from 15% to 70% worldwide.
In 1959, J&J acquired McNeil Laboratories in the US and also Cilag Chemie, AG in Europe.
These two acquisitions enabled the company to gain a significant presence in the field of
pharmaceutical medicines for the first time. One McNeil product was the first prescription
aspirin-free pain reliever, Tylenol (acetaminophen) elixir for children. Under J&J’s acquisition,
the product became available without a prescription a year later and earned the status as the pain
reliever doctors and paediatricians recommend the most, according to the company’s history.
The joining of Janssen

It was in 1961 that Belgium’s Janssen Pharmaceutica N.V. joined the J&J Family of Companies.
Its founder, Dr Paul Janssen, is recognised as one of the “most innovative and prolific
pharmaceutical researchers of the 20th century”.
Today, Janssen is one of the world’s leading research-based pharma companies and markets
prescription medicines in the areas of gastroenterology, women’s health, mental health,
neurology and HIV / AIDS, to name a few.
“Dr Paul Janssen is recognised as one of the “most innovative and prolific pharmaceutical
researchers of the 20th century”.”
United under the common name of J&J, Janssen is now split into three different businesses –
Janssen Research & Development, Janssen Healthcare Innovation and Janssen Diagnostics.
Some of the most well-known Janssen products include diarrhoea treatment, Immodium
(loperamide), antipsychotic Risperdal (risperidone) and Alzheimer’s disease drug, Reminyl
(galantamine).
Risperdal is well-known due to the controversy in the US following its product launch in 1994.
Juries in several US states found J&J guilty of hiding information about adverse effects of the

JOHNSON AND JOHNSON
antipsychotic medication. In 2012, J&J agreed to pay US $181 million to 26 states in order to
settle these claims.
J&J in the 70s and beyond

Between 1976 and 1989, James E. Burke was Chairman and CEO of J&J. During this tenure,
J&J entered into the areas of vision care, mechanical wound closure and diabetes management. It
was also during this time that J&J opened the first operating companies in China and Egypt.
During the 1990s, Ethicon’s Endo-Surgery pioneered minimally invasive surgery, which uses
very small incisions and helps patients recover faster than with traditional surgery.
In 1994, the first coronary stent was created by J&J and was called the Palmaz-Schatz stent. This
move revolutionized cardiology – coronary stents keep vessels open so blood can flow to the
heart. Later, another of J&J’s companies, Cordis Corporation, introduced the first drug-eluting
stent, which helped prevent the arteries from re-clogging. Cordis was founded in Miami in 1959
and develops and produces medical equipment to treat patients who suffer from cardiovascular
disease.
Beginning in 2003, J&J became involved in a series of litigations with Boston Scientific
involving patents covering heart stent medical devices. Both parties claimed that the other had
infringed upon their patents. The litigation was settled in 2009, when Boston Scientific agreed to
pay $716 million in September and an additional $1.73 billion the following February.
William C. Weldon became the Chairman and CEO of J&J in 2002. Under his leadership, the
company entered new therapeutic areas. One of these new areas was HIV / AIDSs, which came
about through the acquisition of Tibotec-Virco BVBA, to help address the vast unmet needs of
patients with HIV / AIDS and other infectious diseases like tuberculosis.
In 2006, J&J acquired Pfizer Consumer Healthcare for $16.6 billion in cash. The acquisition
included worldwide leading brands such as Listerine oral care products and the Nicorette line of
smoking cessation treatments.
J&J in 2012 and beyond

JOHNSON AND JOHNSON
Alex Gorsky was appointed Chief Executive Officer of Johnson & Johnson in 2012.
Today, the J&J Corporation includes over 250 subsidiary companies, with operations in over 57
countries and products sold in over 175 countries around the world. The company focuses on
three main areas: Consumer, Medical devices and diagnostics and Pharmaceuticals.
In 2012, worldwide sales were $67.2 billion, while the total investment in research and
development was approximately $7.7 billion.
While no one can predict the future for J&J and its subsidiaries, the company’s pharmaceutical
segment has an idea of where it wants to be after it announced plans to submit 10 new product
filings for regulatory approval over the next four years. These products are aimed at addressing
serious unmet medical needs, such as Hepatitis C, schizophrenia and influenza.
“Our investment in transformational innovation has enabled strong growth that has allowed us
to continue investing in our future portfolio. With a steadfast focus on the most serious unmet
medical needs, our approach is to identify the best science — internal and external — to deliver
new options and solutions to patients. Today, we have an industry-leading pipeline of truly
differentiated products and a track record of success resulting in more new molecular entity
(NME) approvals per year at a lower development cost than the industry average.”
Paul Stoffels, M.D., Chief Scientific Officer, Johnson & Johnson, and Worldwide Chairman,
Pharmaceuticals Group.
According to IMS Health, the total global pharma market is expected to grow approximately
4.5% annually and reach a market size of around US $1.2 trillion by 2017. J&J’s
pharmaceuticals segment was the fastest growing pharma business in the US, Europe and Japan
in 2012.

JOHNSON AND JOHNSON
MANUFACTURING PLANT LOCATION:
SALES OFFICE:

JOHNSON AND JOHNSON
PRODUCTS OF JNJ:
J&J Product focused on bringing more productive products and expanding the market rapidly. It
has a history of over 100 years and its business has grown tremendously stepping at higher
margin and satisfying consumer needs by giving superior quality of products.
CONSUMER PRODUCTS:
These are one of the best products in J&J. Products under this category are outlined below.
• Baby and Child Care
• Skin Care
• Oral and Wound Care
• Nutritional Products
Johnson's Baby and Child Care
Johnson and Johnson company gives vast numbers of baby products which cover every baby
from top to toe with pure and gentle protection. Johnson's Baby products are a giant leader in the
market giving vast products to new born babies. J&J gives a wide range of products which gives
ample room to consumers to buy them without any second thoughts. These products are further
categorized into Johnson's Baby Top-To-Toe wash, Baby Skincare wipes, Baby mildness Cream,
Baby Milk Lotion, Baby oil, Baby Hair oil, Baby Shampoo, Baby Powder Blossoms, Baby Soap
Blossoms, Baby Care Collections and Baby Head-To-Toe wash, Baby Bedtime Lotion, Baby
Bedtime Moisture Wash, Baby Bedtime Bubble bath wash.
Johnson's Baby Top-To-Toe wash
This product has a unique formula that babies would never cry nor scream. It is safer and gentle

JOHNSON AND JOHNSON
to baby's eyes It can be also used on babies with sensitive skin. It is soap free and dye free
product which helps cleaning of new born skin gently and smoothly.
Johnson's Baby Skincare wipes

J&J introduced this product in order to clean your baby other than using cloths and water to wipe
your baby. The product is termed as "Baby Skincare wipes" which is a material used to wipe
your baby clean which is extra soft and gentle and it is designed for baby's dedicated skin. The
benefits of this wipes are many, which cleans and moisturize baby clean, it protect the baby's
skin from any dust.
Johnson's Baby mildness Cream
J&J introduced this product in order to protect the baby from skin irritation, rashes etc. This
cream is proved to be a clinically mildness and protects every baby from heat and preserve
natural softness of baby skin. Once this cream is applied on the baby' skin it moisturizes very fast
and brings softness to baby skin.

JOHNSON AND JOHNSON
Johnson's Baby Milk Lotion

J&J introduced this product in order to protect the baby from skin getting harder. This lotion is
proved to be a clinically mildness and protects every baby from heat and preserve natural
softness of baby skin. Once this lotion is applied on the baby' skin it moisturizes very fast and
brings softness to baby skin. This lotion is filled with Milk protein and is Non Greasy.
Johnson's Baby oil

J&J introduced this product to be applied on baby's skin which will moisturize the skin faster.
This oil is mild, pure and gentle and filled with Vitamin E and Aloe Vera which will soften the
skin of the baby.
Johnson's Baby Hair oil
J&J introduced this product to be applied on baby's hair which will make softer and healthy. This
hair oil is mild, pure and gentle and filled with pro vitamin and avocado which helps to keep
baby's hair softer and very healthy. This oil is very lighter and non greasy and very easy to use.

JOHNSON AND JOHNSON
Johnson's Baby Shampoo

J&J introduced this product to be applied on baby's hair which will clean baby's hair and scalp.
This product has a unique formula that babies would never cry nor scream. It is safer and gentle
to baby's eyes. It has added conditioner which will softens baby hair and it show a good shine
after applying and washing it.
Johnson's Baby Powder Blossoms

J&J introduced this product to be applied on baby's entire body termed as baby's powder with
long lasting floral fragrance in it. This was introduced and was clinically proved keeping in view
that it can be applied on baby's delicate skin. By applying this powder on baby, it keeps the little
one with great fragrance. It also keeps babies softer and very smooth to touch.
Johnson's Baby Moisturising soap Blossoms

J&J introduced this product to be applied on baby's entire body termed as baby's moisturising
soap with long lasting floral fragrance in it. This was introduced and was clinically proved
keeping in view that it can be applied on baby's smooth skin. By applying this soap on baby, it
keeps the little one fresh with floral fragrance.

JOHNSON AND JOHNSON
Johnson's Head-To-Toe Baby wash

This product was introduced for use on baby's entire body and hair. This product has a unique
formula that babies would never cry nor scream. It is safer and gentle to baby's eyes It can be
also used on babies with sensitive skin. It is soap free and dye free product which helps cleaning
of new born skin gently and smoothly.
Johnson's Baby Bedtime Lotion

This product was introduced for use on baby's entire body and hair during the night and to make
your baby fall sleep easier throughout the night peacefully. The procedure for applying this
lotion is that, before your baby sleep, make a warm bath and a gentle skin massage with
Johnson's Bedtime Lotion. Once this lotion is applied, the baby will get a peaceful sleep at night.
This product also have proved clinically and tested to be safer for baby's skin and bring the skin
soften and smooth.
Johnson's Skin Care
The Johnson's skin care has many brands but there are two big brands will is explained here. One
of them is Neutrogena and the second termed as famous brand Clean & Clear.

JOHNSON AND JOHNSON
Johnson's Neutrogena
Neutrogena is one of the biggest of all the skin brands which is famous in the world. It helps to
improve the health of the skin and give your skin an awesome look.
The brand has an extensive range of products from Cleansers, Acne, Moisturising, Anti-Aging,
Body& Bath, Cosmetics, Sun Protection, Hair Care and also Men's Skin care.
Cleansers: There are many types of cleansers which mainly consist of Daily Cleansers, Acnes
Cleansers, Anti Aging Cleansers, Sensitive Skin, and Makeup Removers. It also consists of
many forms such as Facial Cleansers, Facial Scrubs, Bar, Toners, Acne treatments, wipes, pads
and towelettes.
Acne: There are many types of Acne which mainly consist of Acne Cleansers, Acne Kits &
Treatments, blemish & Spot Treatments. It also consists of many forms such as Facial Cleansers,
Facial Scrubs, Bar, Toners.
Moisturizers: There are many types of Moisturizers which mainly consist of Facial, Body
moisturizers, hand and foot, eye etc.

JOHNSON AND JOHNSON
Johnson's Clean & Clear

Clean & Clear is one of the best of all the skin brands which is famous in the world. It helps to
fight acne, and brings good skin care used by younger generation and fight against acne, dirt and
blackheads.
The brand has an extensive range of products from Cleansers, Scrubs, Moisturizers, Acne
Treatments, Body Washes, and Face Wash.
Cleansers: There are many kinds of cleaners. One of them is the morning burst facial cleanser
which is the best for cleansing and glow the skin. This cleanser is added with vitamin c and with
fresh citrus scent, leaving your skin feel clean, energized and ready to face your day.
Scrubs: There are many kinds of Scrubs. One of them is the Blackhead Clearing Daily Scrub
and Blackhead eraser scrub. Blackhead Clearing Daily Scrub is oil-free and to be applied on the
face and gently scrubbed and the results will be great. Blackhead eraser has multi action beads
that help to remove the dirt, oil, and dead skin from the face.

JOHNSON AND JOHNSON
Moisturizers: There are many kinds of Moisturizers. One of them is Skin Balancing
Moisturizer. This helps to moisture dry skin while preventing breakouts. Its oil-free keeps skin
smoother and softer.
Johnson's Oral and Wound Care
Johnson and Johnson company gives vast numbers of Oral and Wound care products. J&J gives
a wide range of products which gives ample room to consumers to buy them without any second
thoughts. These products are further categorized into brands like Band-Aid, Listerine and
Savlon.
Band Aid: Band Aid is one of the leading products in the entire world and has become a generic
name in the wound care market.
Types of Band Aid:
Band Aid Water / wash proof: It is an antiseptic bandage which is ready to use by adults for
emergency or any type of wound. There are many air holes which allow air to pass through the
medicated area and help to cure the wound faster. There are many types of band aid for kids too.

JOHNSON AND JOHNSON
Band Aid Flexible: It is an antiseptic bandage which is ready to use by adults for emergency
or any type of wound. It provides continuous protection to areas like elbows, knees and fingers.
There are also many types of Band Aid which is necessary for Basic Care, Just for Kids, Variety
Pack, Durable Protection and Advanced Protection.
Listerine: Listerine is one of the leading market giant in the mouthwash category. Listerine is the
best mouthwash which helps in reaching the whole mouth, where even some brush won't reach
them and reduces oral problems causing plaque etc. Listerine fights germs that cause bad breath,
and gum problems. Once you rinse for some seconds with Listerine during night, it allow you to
get protected from germs that cause gum and plaque. One has to note that, the rinse shouldn't be
swallow and it to be kept far from kids and infant.

JOHNSON AND JOHNSON
Johnson's Nutritional Products
These are one of the best products of Johnson and Johnson consists of Nutrition and products of
Healthier Diets. One such type of Nutritional product is Splenda
Splenda: This is a leading brand in the substitute for sugar and sold in more than 50 countries
across the world. It is a low calorie sweetener which was launched in India during the 2011. It
contains sucralose which is made from sugar but it is not a sugar.
Splenda is very easy to fit into a purse, a laptop bag and very easy to carry it anywhere. This way
you can always be sure to have this tablet in the tea or coffee without the sugar. Splenda can be
used in tea, coffee, lassi, milkshakes, pastries etc.

JOHNSON AND JOHNSON
STRUCTURE OF THE COMPANY:

Johnson & Johnson ltd act upon the rules and regulations of the Companies Act, 1948. The
company has well defined structure. It have the following departments:
1. HR/ Personnel department.
2. Accounts departments.
3. Purchase departments.
4. Store department.
5. Quality Assurance& Quality Control.
6. IT department.
7. R&D department.
8. Sales& Excise department.
ORGANISATIONAL STRUCTURE:

JOHNSON AND JOHNSON
COMPETITORS:

JOHNSON AND JOHNSON
SWOT ANALYSIS:
STRENGHTH
1. Johnson & Johnson is one of the World’s Most Admired Companies
2. The United Nations awarded Johnson & Johnson the Humanitarian of the Year Award for our
leading role in its Healthy Mother, Healthy Child initiative.
3. One of the “Top 100 Companies for Working Mothers” every year since the list was initiated
26 years ago.
4. Johnson & Johnson has strong brand presence in form of advertising media and print media
for a number of products.
5. Excellent distribution network as the brand is supplied to remote villages and faraway places
6. J&J is a brand trusted by mothers the world over
7. Johnson & Johnson has an excellent product portfolio and high quality offerings
8. It includes some 250 subsidiary companies with operations in over 57 countries and products
sold in over 175 countries
9. More than 100,000+ people are employed with J&J

JOHNSON AND JOHNSON
WEAKNESSES
1. Strong competition means limited market share growth for Johnson & Johnson
2. Being a global brand means operations are disturbed by market fluctuations
OPPORUNITIES
1. Acquisitions of other smaller companies and increasing Johnson & Johnson's presence
2. Bringing out a range of more portable products for economy class and increasing rural
penetration
3. Johnson & Johnson can tir-up with corporates, schools, colleges, hospitals etc for their
business
THREATS
1. Increasing competition can reduce market share of Johnson & Johnson
2. Spurious brands with the name similar to existing brand name
3. Availability of cheap substitutes and low priced competitors

JOHNSON AND JOHNSON
MICHAEL PORTERS FIVE FORCES
Johnson & Johnson Porter Five Forces Analysis
Strategic Management Essays, Term Papers & Presentations
Porter Five Forces Analysis is a strategic management tool to analyze industry and understand
underlying levers of profitability in a given industry. Johnson & Johnson managers can use
Porter Five Forces to understand how the five competitive forces influence profitability and
develop a strategy for enhancing Johnson & Johnson competitive advantage and long term
profitability in Drug Manufacturers - Major industry.
Brief overview of Johnson & Johnson
Johnson & Johnson is one of the leading firms in the Drug Manufacturers - Major. Over the
years Johnson & Johnson has redefined the ways of doing business in Healthcare. Johnson &
Johnson is listed at New York Stock Exchange (NYSE) and have a market cap 363.63B USD.
What are Porter Five (5) Forces
In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed five
forces that have significant impact on a firm's profitability in its industry. These five forces
analysis today in business world is also known as -Porter Five Forces Analysis. The Porter Five
(5) Forces are -
• Threat of New Entrants

• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat from Substitute Products
• Rivalry among the existing players.

JOHNSON AND JOHNSON
Porter Five Forces is a holistic strategy framework that took strategic decision away from just
analyzing the present competition. Porter Five Forces focuses on - how Johnson & Johnson can
build a sustainable competitive advantage in Drug Manufacturers - Major industry. Managers at
Johnson & Johnson can not only use Porter Five Forces to develop a strategic position with in
Drug Manufacturers - Major industry but also can explore profitable opportunities in whole
Healthcare sector.Johnson & Johnson Porter Five (5) Forces Analysis for Healthcare Industry
Threats of New Entrants
New entrants in Drug Manufacturers - Major brings innovation, new ways of doing things and
put pressure on Johnson & Johnson through lower pricing strategy, reducing costs, and
providing new value propositions to the customers. Johnson & Johnson has to manage all these
challenges and build effective barriers to safeguard its competitive edge.

JOHNSON AND JOHNSON
How Johnson & Johnson can tackle the Threats of New Entrants
• By innovating new products and services. New products not only brings new customers to the
fold but also give old customer a reason to buy Johnson & Johnson ‘s products.
• By building economies of scale so that it can lower the fixed cost per unit.
• Building capacities and spending money on research and development. New entrants are less
likely to enter a dynamic industry where the established players such as Johnson & Johnson keep
defining the standards regularly. It significantly reduces the window of extraordinary profits for
the new firms thus discourage new players in the industry.
Bargaining Power of Suppliers

All most all the companies in the Drug Manufacturers - Major industry buy their raw material
from numerous suppliers. Suppliers in dominant position can decrease the margins Johnson &
Johnson can earn in the market. Powerful suppliers in Healthcare sector use their negotiating
power to extract higher prices from the firms in Drug Manufacturers - Major field. The overall
impact of higher supplier bargaining power is that it lowers the overall profitability of Drug
Manufacturers - Major.
How Johnson & Johnson can tackle Bargaining Power of the Suppliers
• By building efficient supply chain with multiple suppliers.

• By experimenting with product designs using different materials so that if the prices go up of one
raw material then company can shift to another.
• Developing dedicated suppliers whose business depends upon the firm. One of the lessons
Johnson & Johnson can learn from Wal-Mart and Nike is how these companies developed third
party manufacturers whose business solely depends on them thus creating a scenario where these
third party manufacturers have significantly less bargaining power compare to Wal-Mart and
Nike.

JOHNSON AND JOHNSON
Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best offerings available by paying the
minimum price as possible. This put pressure on Johnson & Johnson profitability in the long run.
The smaller and more powerful the customer base is of Johnson & Johnson the higher the
bargaining power of the customers and higher their ability to seek increasing discounts and
offers.
How Johnson & Johnson can tackle the Bargaining Power of Buyers
• By building a large base of customers. This will be helpful in two ways. It will reduce the
bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its
sales and production process.
• By rapidly innovating new products. Customers often seek discounts and offerings on
established products so if Johnson & Johnson keep on coming up with new products then it can
limit the bargaining power of buyers.
• New products will also reduce the defection of existing customers of Johnson & Johnson to its
competitors.
Threats of Substitute Products or Services
When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example services like Dropbox and Google Drive are substitute to
storage hardware drives. The threat of a substitute product or service is high if it offers a value
proposition that is uniquely different from present offerings of the industry.
How Johnson & Johnson can tackle the Treat of Substitute Products / Services
• By being service oriented rather than just product oriented.

• By understanding the core need of the customer rather than what the customer is buying.
• By increasing the switching cost for the customers.

JOHNSON AND JOHNSON
Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense then it will drive down prices
and decrease the overall profitability of the industry. Johnson & Johnson operates in a very
competitive Drug Manufacturers - Major industry. This competition does take toll on the overall
long term profitability of the organization.
How Johnson & Johnson can tackle Intense Rivalry among the Existing Competitors in Drug
Manufacturers - Major industry
• By building a sustainable differentiation

• By building scale so that it can compete better
• Collaborating with competitors to increase the market size rather than just competing for small
market.

JOHNSON AND JOHNSON
THEORITICAL
BACKGROUND

JOHNSON AND JOHNSON
INVENTORY MANAGEMENT
MEANING OF INVENTORY
Inventory is a list for goods and materials, or those goods and materials themselves, held
available in stock by a business. It is also used for a list of the contents of a household and for a
list for testamentary purpose of the possessions of someone who has died. In accounting
inventory is considered an asset.
NATURE OF INVENTORY
Inventories are stock of the product a company is manufacturing for sale and components that
make up the product.
1. Stock of manufacturing product and the material that make up the project.
2. Raw material are those basic input that are converted into finished produced through the
manufacturing process. Raw materials inventories exit are those unit which have been
purchased and stored for further production.
3. Work in process inventories are semi manufactured product, they represent product that
need more work before finished product sale.
4. Finished goods inventories are those completely manufacturing products which are ready
for sale. Stock of raw materials and work in process facilitate production, while stock
of finished goods is required for smooth marketing operation. Thus, inventories serve as
alike between the production and consumption of goods.
5. stores and spares firm also maintain a fourth kind of inventory, supplier or stores and spares.
supplies include office and plant cleaning materials like soap, broom, oil, fuel, light, bulbs
etc these production processes.

JOHNSON AND JOHNSON
TYPES OF INVENTORIES
Inventories play a major role in a business or depending on nature of the businesses. The
inventories may be classified as under.
(I) Raw Materials

Materials and components scheduled for use in making a product. These are the basic
inputs, which are converted into finished products through manufacturing process. Raw
material inventories are those units, which have been purchased and stored for future
production
(II) Work in process / Progress

Materials and components that have begun their transformation to finished
goods. Materials issued to the stop floor, which have not yet become finished products
they are value added materials to the extent of labor cost incurred.
(III) Finished Goods

A finished goods is a completed part that is ready for a customer order.
These goods have been inspected and have passed final inspection requirements so that
they can be transferred out of work-in-process and into finished goods inventory. From
this point, finished goods can be sold directly to their final user, sold to retailers, sold to
wholesalers, sent to distribution centers, or held in anticipation of a customer order.
NEED FOR INVENTORY
❖ Transaction motive:
Every firm has to maintain some level of inventory to meet the day-to-day requirement of sales,
production process, customer demand etc. In the finished goods as well as raw material are kept
as inventories for smooth production process of the firm.

JOHNSON AND JOHNSON
❖ Precautionary motive:
A firm should keep some inventory for unforeseen circumstances also like loss due to
natural calamities in a particular area, strikes, lay outs etc so the firm must have some finished
goods as well as raw-materials to meet circumstances.
❖ Speculative motive:
The firm may be made to keep some inventory in order to capitalize an opportunity to make
profit due to price fluctuations
BASIC REASONS TO KEEPING AN INVENTORY:
There are three basic reasons for keeping an inventory:
1. TIME: The time lags present in the supply chain, from supplier to user at every stage, requires
that you maintain certain amount of inventory to use in this “lead time”.
2. UNCERTAINTY: Inventories are maintained as buffers to meet uncertainties in demand,

supply and movement of goods.
3. ECONOMIES OF SCALE: Ideal condition of “one unit at a time at a place where user needs
it, when he needs it “principle tends to incur lots of costs in terms of logistics. So bulk buying,
movement and storing brings.
OBJECTIVES OF INVENTORY:
The main aim objectives of inventory management are operational and financial. The operational
objectives mean that the materials and spares should be available in sufficient quantity so that
work is not disrupted for want of inventory. The financial objective means that investments in
inventories should be remain idle and minimum working capital should be locked in it.
The following are the objectives of inventory management
1. To ensure continuous supply of materials spares and finished goods so that production should
no supper at any time and the customer demand should also be met.

JOHNSON AND JOHNSON
2. To avoid both over and under stocking of inventory.
3. To maintain investment in inventories at the optimum level as required by the operational and
sales activities.
4. To keep material cost under control so that they contribute in reducing the cost of production
and overall costs.
5. To eliminate duplication in ordering stocks. This is possible with the help of centralizing
purchases.
6. To minimize losses by deterioration, pilferage, wastages and damages.
7. To design proper organization for inventory management. Clear cut accountability should be
fixed at various levels of the organization.
8. To ensure perpetual inventory control so that materials shown in stock ledgers should be
actually lying in the stores.
9. To ensure right quality goods at reasonable prices. Suitable quality standards will ensure
proper quality of stocks. The price analysis will ensure payment of proper prices.
10. To facilitate furnishing of data for short term and long term planning and control of
inventory
IMPORTANCE OF INVENTORY MANAGEMENT
1. Counting Current Stock:-

All business must know what they have on hand and evaluate stock levels with respect to
current and forecasted demands.
2. Keeping accurate records:-

Any time arrive at or leave a warehouse, accurate paper work should be kept , itemizing the
goods. When inventory arrives, this is when you will find breakage or loss on the goods you
ordered. Inventory leaving your warehouse must be counted to prevent loss between the

JOHNSON AND JOHNSON
warehouse and the point of sale. Even samples should be recorded, making the salesperson
responsible for the goods until they are returned to the storage facility. Records should be
processed quickly, at least in the same day that the withdrawal of stock occurred
3. Managing Employees:-
Buyers are the employees who make stock purchases for your company. Reward system
should be set in place that encourage high levels of customer service and return on investment
for the product lines the buyer managers.
Warehouse employees should be educated on the costs of improper inventory management. Be
sure they understand that the lower you’re your profit margin, the more sales must be
generated to make up for lost goods. Incentives programs can help employees keep this in
perspective. When they see a difference in their paychecks from poor inventory management,
they are more likely to take precautions to prevent shrinkage.
Each stock item in your warehouse or back room should have its own procedure for
replenishing the supply, find the best suppliers and storage location for each the record this
information in official procedure that can easily be accessed by your employees.
Inventory management should be a part of your overall strategic business plan. As the business
climate evolves toward a green economy, businesses are looking for ways to leverage this
trend as part of the "big picture". This can mean re-evaluating supply chain and choosing
products that are environmentally sound. it can also mean putting in place recycling
procedures.
TECHNIQUES OF INVENTORY MANAGEMENT:

1. Determination of stock levels:
Carrying of too much and too little of inventories is detrimental to the firm. If the inventory
level is too little will face frequent stock outs involving heavy ordering cost and if the
inventories level is too high it will be unnecessary tie-up of capital. Therefore, an efficient
inventory management that a firm should maintain an optimum level of inventory where
costs are the minimum and at the same time there is no stock - out which may results in loss
of sale or stoppage of production. Various stock levels are discussed as such.

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a) Minimum Level
This represents the minimum quantity of the material must be maintained in hand
atall times. The quantity is fixed so that production may not be held up due shortage of the
material. In fixing this level, the following factors are taken into consideration.
Lead Time:
A purchasing firm requires some time to process the order and time is also required
by the supplying firm to execute the order. The time taken in processing the order and then
executing it is known as lead time. It is essential to maintain some inventory during this
period.
Rate of consumption:
It is the average consumption of materials in the factory.
The rate of consumption will be decided on the basis of past experience and production
plans.
Nature of materials:
The nature of material is also affects the minimum level. If a material is required
only against special orders of the customer then minimum stock will not be required for such
materials. Minimum stock level can be calculated with the help of following formula.
b) Re-order level
It is the point at which if stock of a particular material stores approaches, the
storekeeper should initiate the purchase requisition for fresh suppliers of that material this
level is fixed somewhere between the maximum and minimum levels is such a way that the
difference of quantity of the material between the re-ordering level and the minimum level
will be sufficient to meet the requirements of production up to the time the fresh supply of
the material is received. Re-ordering level is fixed with the help of following formula

JOHNSON AND JOHNSON
Re-order Level = Maximum consumption * Maximum Reorder period.
c) Maximum level:
It represents the maximum quantity of an item of material which can be held in stock
at any time. Stock should not exceed this quantity. The quantity is fixed so that there may be
no overstocking.
Maximum stock level = Re-ordering level + Re-ordering Quantity - (Minimum

Consumption * Minimum Reordering period)
Maximum stock level is fixed by taking into account the following factor.
1. Amount of capital available for maintaining factors.
2. God own space available.
3. Maximum requirement of the stores for production purposes at any point of time.
4. Rate of consumption of the material during the lead time.
5. The time lag between indenting and receiving of the material.
6. Possibility of loss in stores by deterioration, etc. There are certain stores which
deterioration in quality if they are stored over a long period.
7. Cost of maintaining stores.
8. Likely fluctuation in prices. For instance, if there is the possibility of a substantial
increase in the coming period, a comparatively large maximum stock level will be fixed. On
the other hand, if there is the possibility of decrease in prices in the near future, stocks are
kept at a much reduced level. The seasonal nature of supply of material. Certain materials
are available only during specific periods of the year, so these have to be stocked heavily
during these periods.
9. Restriction imposed by the government or local authority in regard to materials in which
there are inherent risks e.g. fire and explosion.
10. Possibility of change in fashion and habit which will necessitate change in requirements
of materials.

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d) Danger Level:
This means a level at which normal issues of the material are stopped and issues are
made only under specific instructions The purchase officer will make special arrangements
to get the materials which reach at their danger levels so that the production may not stop
due to shortage of materials. Danger level is determined with the following formula
Danger Level = Average Consumption * Maximum re-order period for emergency purchase
e) Average stock level:

The average stock level is determined by the following formula,
Average stock level = Minimum stock level + 1/2 of order quantity.
2. Determination of safety stock level:
Safety stock is a buffer to meet some unanticipated increase in the usage. The usage of
inventory can't be perfectly forecasted. It fluctuates over a period of time. The demand for
materials may fluctuate and delivery of inventory may also be delayed and in such a
situation the firm can face a problem of stock-out. The stock-out can prove costly by
affecting the smooth working of company.
In order to protect against the stock-out arising out of usage fluctuations, firms usually
maintain some margin of safety stocks. The basic problem is to determine the level of
quantity of safety stocks. Two stocks are involved in the determination of this stock i.e.
opportunity cost of stock-outs and the carrying costs. The stock outs of raw materials cause
production disruption resulting into higher cost of production. Similarly, the stock-outs of
finished goods results into the failure of the firm in the competition, as the firm cannot
provide proper customer services. If the firm maintains low level of safety frequent
stockouts will occur resulting into the larger opportunity costs. On the other hand the larger
quantities of safety stocks involve higher carrying costs.

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3. Ordering systems of inventory:
The basic problem of inventory is to decide the re-order point. Indicates when an order
should be placed. The re-order point is determined with the help of these things.
a) Average consumption rate.
b) Duration of lead time.
c) Economic order quantity.
When the inventory is depleted to lead time consumption, if order should be placed. There
are three prevalent systems of ordering and a concern can choose any of these;
I. Fixed order quantity system generally known an economic order quantity (EOQ)
System.
II. Fixed period order system, orders periodic reordering system or periodic review
system.
III. Single order and scheduled part delivery system.
4. Economic order quantity (EOQ):
A decision about how much to order has great significant in inventory management. The
quantity to be purchased should neither be small nor big because costs of buying and
carrying materials are very high. Economic Order Quantity is the size of the lot to be
purchased which is economically viable. This is the quantity of materials, which can be
purchased at minimum cost. Generally, economic order quantity is the point at which
inventory-carrying cost is equal to order cost. In determining EOQ, it is assumed that the
cost managing inventory is made up solely of two parts,
- Ordering cost, and
- Carrying cost.
a) Ordering cost:-
It is the cost of placing orders for the purchase of materials and includes:

JOHNSON AND JOHNSON
1. Cost of staff posted in the purchasing department, inspection section and payment
department.
2. Expense incurred on the transaction of goods purchased.
3. Inspection of cost incoming materials.
4. Cost of stationary, typing, postage, telephone charges, etc.
These costs are also known as buying cost and will arise only when the goods are purchased.
When materials are manufactured in the concern then these costs will be known as set-up costs.
These costs will include costs of setting up machinery for manufacturing materials, time taken up
in setting, cost of tools, etc. The ordering costs are totaled up for the year and then divided by the
number of orders placed each year. The planning commission on India has estimated these costs
between Rs.10 to Rs.20 per order
b) Carrying cost:
It is the cost of holding the materials in the store and includes :
1. Cost of storage space which could have been utilized for some other purpose.
2. Cost of bins and racks that have to be provided for the storage of materials.
3. Cost of maintaining the materials to avoid deterioration.
4. Amount of interest payable on the money locked up in the materials.
5. Cost of spoilage in stores and handling.
6. Transaction costs in relation to stock.
7. Cost of obsolescence on account of some of the materials becoming obsolete after some
time of storage either due to change in the process or product.
8. Insurance cost.
9. Clerical cost etc.
All these costs taken together, in India, amount to somewhere near about 20-25 percent of the
cost of material per year. The ordering and carrying cost have a reverse relation the ordering cost
goes up with the increase in number of orders placed. On the hand, carrying cost go down per
unit with the increase in number of unit’s purchased and stored. The ordering and carrying cost
of materials being high, an effort should be made to minimize these costs. The quantity to be

JOHNSON AND JOHNSON
ordered should be large so that the economy may be made in transport cost and discounts may by
earned. On the other hand, storing facilities, capital to be locked up, insurance cost also be taken
into the account.
Assumption of EOQ:
1. There are dynamic conditions of the supply which enable a firm to place as many orders as it
needs.
2. Prices of the item remain stable which keep carrying cost constant.
3. The quantity of the item to be consumed during a particular period is totally known i.e.
quantity to be consumed is certain.
When above mentioned conditions are satisfied, EOQ can be calculated with the help of
following formula:
EOQ = 2CO
I
Where; Q = Quantity to be ordered
C = Consumption of the material concerned in units during a year.
O = Cost of placing one order including the cost of receiving the goods i.e. costs of getting an
item into the firm's inventory.
I = Interest payment including variable cost storing per unit per year i.e. holding costs of
inventory.
JIT-Just In Time Inventory Control:-
The just in time inventory control system, originally developed by Taichi Okno of Japan, simply
implies that the firm should maintain a minimal level of inventory and rely on suppliers to
provide parts and components "Just In Time" to meet its assembly requirements. This may be
contrasted with the traditional inventory management system which calls for maintaining a
healthy level of safety stock to provide a reasonable protection against uncertainties of
consumption and supply the tradition system may be referred to as a "Just In Case" under the

JOHNSON AND JOHNSON
"Just In Time" inventory system a concerted effort is made to lower ordering cost and also the
safety stock by forging stronger long term relationship with the supplier.
5. ABC (ALWAYS BETTER CONTROL) ANALYSIS:-
This technique is popularly known as ―Always Better Control" has universal application in
many areas. This method analysis the inventory item from its money value point to
determine priority. In material management it has been used in areas which need selective
control like inventory, purchase order, inspection etc. The ABC system is widely used
classification technique to identify various items of inventory for purpose of inventory
management.
Components of ABC Analysis:
In ABC Analysis all the items of inventory are divided into three components:
"A"-Items:- It is usually found that hardly 5-10% of the total items account for 70-75% of
the total items account for 70-75% of the total money spent on materials. These items
require detailed and rigid control and need to be stocked in smaller quantities. These items
should be produce frequently, the quantity per occasion being small.
"B" Items:- Those are the intermediary items, which do not require a detailed and close
control as items, but they do need more attention and control than
"C" items. These items usually represent 10% to 20% of the total quantity of the
expenditures on materials. Generally they are as curtained on the residual basis i.e. first 'A'
and 'C' items are scanned and the residual forms the B-items. "C"-Items:- These are
numerous is expansive items. They generally represent 70% to 75% of the total quantity of
the item involving only 5% to 10% of the total expenditure on materials. The control
procedure for "C" items is exactly opposite to that of 'A' item. They are purchased in large

JOHNSON AND JOHNSON
quantities in order to secure quantity discount and to minims the number of order and the
costs incidental to ordering. Though they are important items. There is neither risk of
expenditure their replenishment or the shutting down of the operation due their stockiest
outs. This usual mix of the items would be as under
6. VED Analysis:
VED Analysis represents classification of item based on criticality. The analysis
classifies the items into three groups called vital, essential and desirable. "Vital" category
encompasses those items for want of which production would come to a halt. "Essential"
group includes not cause any immediate loss of production. The stock-out of these items
entail nominal expenditure and cause minor disruptions for a short duration. VED analysis is
best suited for spare inventory. In fact, it is advantageous to use more than one method. E.g.
ABC and VED analysis together would be helpful for inventory control of spares.

JOHNSON AND JOHNSON
RESEARCH
METHODOLOGY

JOHNSON AND JOHNSON
RESEARCH METHODOLOGY:
TITLE OF THE PROJECT:
OBJECTIVES OF THE STUDY:
➢ To understand the inventory management technique adopted by JOHNSON &

JOHNSON.
➢ To understand different concepts related to Inventory Management.
➢ To analysis the effective use of inventory using ratio technique.
➢ To study the impact of inventory on the company’s performance.
SCOPE OF THE STUDY:
▪ This study is to find the facts and opinions of inventory management and control at
JOHNSON & JOHNSON.
▪ This study gives the brief information about the inventory management at JOHNSON &
JOHNSON.

JOHNSON AND JOHNSON
METHODOLOGY
It is a technique or a process used to collect the required data for research on the company. The
tools used for collection of data for this project work are:
1. Secondary data: In this method of data collection, the investigator does not collect
data directly from the field. They are the data which he borrows from others who have
collected them for some other purpose.
• Company stores records
• Websites
• Materials provided by the company

JOHNSON AND JOHNSON
DATA ANALYSIS &

INTERPRETATION

JOHNSON AND JOHNSON
1. Inventory turnover ratio:

It indicates the efficiency of inventory management inventory turnover directly
affects the profitability of the firm. The higher the ratio indicates that the firm has
performed well during the year and increased sales, with proportionately less
investment in inventory.
Inventory Turnover ratio: Cost of goods sold
Average inventory
Cost of goods sold = sales-gross profit
Average inventory = opening stock +closing stock

2
Years Cost of goods Average Ratio
sold Inventory
2019 27,556 8809.5 3.12
2018 27,091 8682 3.12
2017 25,439 8454.5 3.00
2016 21,789 8098.5 2.69
2015 21,536 8118.5 2.65
2014 22,746 8031 2.83
2013 22,342 7686.5 2.90
2012 21,658 6890 3.14
2011 20,360 5831.5 3.49
2010 18,792 5279 3.55

JOHNSON AND JOHNSON
Ratio
4
3.5
2.5
1.5
0.5
0
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
The above graph depicts that the Inventory Turnover ratio was very high in previous ten years
and it has reduced to 2.65 in the year 2015, due to decrease in cost of goods sold and increase in
average inventory.

JOHNSON AND JOHNSON
Inventory conversion period:
Inventory conversion period = 360
Inventory turnover ratio
Year Inventory Turnover Ratio Day

2019 3.12 115
2018 3.12 115
2017 3.00 120
2016 2.69 133
2015 2.65 135
2014 2.83 127
2013 2.90 124
2012 3.14 114
2011 3.49 103
2010 3.55 101
Ratio
160
140
120
100
80
60
40
20
0
Day
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

JOHNSON AND JOHNSON
Interpretation:
The inventory conversion period constantly increased from 2010 to 2015 due to long holdings of
inventory. It’s been reducing since 2016, which reflects the focus of company to reduce the long
holding period of inventory.
2. Raw Material Turnover Ratio

The raw material turnover ratio shows the efficiency of the management in
turning raw materials into next process
Raw Material Turnover Ratio = Raw material consumed /Average raw material
Year Material Average Material Ratio

Consumed
2019 7903 1115.5 7.08
2018 7485 1127 6.64
2017 7625 1046 7.28
2016 7192 944 7.61
2015 7117 1075 6.62
2014 6970 1219 5.71
2013 6654 1320 5.04
2012 6079 1311 4.63
2011 5079 1139.5 4.45
2010 4305 1108.5 3.88

JOHNSON AND JOHNSON
Ratio
8
0
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
If raw material ratio is high then company is efficiency converting finished goods. The raw
material ratio is less in the year 2010-11. In the year 2016 & 2017 raw material ratio was high
but in the year 2019, 2018 & 2015 it was slightly less. From this we can say that it goes under
variations, which shows consistency in converting raw materials into finished goods. It is due
to variations in the production.

JOHNSON AND JOHNSON
3. Inventory to current assets turnover ratio:
Inventory/ Current assets
Year Inventory Current Assets Ratio

2019 9020 45274 0.19
2018 8599 46033 0.18
2017 8765 43088 0.20
2016 8144 65032 0.12
2015 8053 60210 0.13
2014 8184 55744 0.14
2013 7878 56407 0.13
2012 7495 46116 0.16
2011 6285 54316 0.11
2010 5378 47307 0.11

JOHNSON AND JOHNSON
Ratio
0.25
0.2
0.15
0.1
0.05
0
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
This ratio indicates the efficiency of the company in utilizing the current assets. Here
inventory comes as current asset. Utilizing of current asset (which included inventory) is very
important for the better management of inventories. Due to increase in the year 2017 was at
0.20 as compared to previous years. From this we can ascertain that the firm is fairly utilizing
its resources.

JOHNSON AND JOHNSON
4. Inventory to total assets turnover ratio:

Inventory / Total assets
Year Inventory Total Assets Ratio

2019 9020 157728 0.057
2018 8599 152954 0.056
2017 8765 157303 0.055
2016 8144 141208 0.057
2015 8053 133411 0.060
2014 8184 130358 0.062
2013 7878 132683 0.059
2012 7495 121347 0.061
2011 6285 113644 0.055
2010 5378 102908 0.052
Ratio
0.064
0.062
0.06
0.058
0.056
0.054
0.052
0.05
0.048
0.046
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

JOHNSON AND JOHNSON
Interpretation:
As per above table the inventory to total assets ratio has increased from 0.062 in 2014 to 0.061
in 2012, it reflects the portion the inventory as a percentage of the total assets, which helps the
management deciding the utilization remaining resources profitably, since the inventory will
lock up the huge funds and reduces the profitability of the organization
5. Inventory to working capital ratio:
Inventory / working capital
Working capital = Current assets – Current liability
Year Inventory Working Capital Ratio

2019 9020 9310 0.96
2018 8599 14803 0.58
2017 8765 12551 0.69
2016 8144 38745 0.21
2015 8053 32463 0.24
2014 8184 30713 0.26
2013 7878 30732 0.25
2012 7495 21854 0.34
2011 6285 31505 0.19
2010 5378 24235 0.22

JOHNSON AND JOHNSON
Ratio
1.2
0.8
0.6
0.4
0.2
0
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
As per the table, the ratio has decreased from 0.96 in 2019 to 0.69 in 2017. It indicates that
firm investing huge amount in inventory. The amount to inventory tied up in the working
capital and it also shows the efficiency of inventory management.

JOHNSON AND JOHNSON
6. Work-In-Progress Turnover Ratio
Work-In-Progress Turnover Ratio = Cost of production /Average inventory
Year Cost of production Average inventory Ratio

2019 27,556 8809.5 3.12
2018 27,091 8682 3.12
2017 25,439 8454.5 3.00
2016 21,789 8098.5 2.69
2015 21,536 8118.5 2.65
2014 22,746 8031 2.83
2013 22,342 7686.5 2.90
2012 21,658 6890 3.14
2011 20,360 5831.5 3.49
2010 18,792 5279 3.55
Ratio
4
3.5
2.5
1.5
0.5
0
Ratio
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

JOHNSON AND JOHNSON
Interpretation:
The work –in-progress ratio in the year 2010 was 3.55 and in the 2019 it has been decreased
to 3.12 again in between years it is slightly decreased & increase in the year 2019 to 2010. In
further year it was increased from 2.69 to 3.12. This shows that company is showing good
performance.
INVENTORY CONVERSION PERIOD (ICP):

The time taken to convert the inventory into revenue. To calculate this we have to find
the sum of, Raw Material Conversion Period (RMCP), Finished Goods Inventory
conversion period (FGCP), Work in Process Inventory conversion period (WIPCP) by
this calculation we can measure the efficiency of company to convert the raw material
to further stage. I.e. raw material consumed for production.
a. Raw Material Conversion Period (RMCP)
RMCP = Raw Material Inventory *360

Raw Material Consumed
Year Days
2019 50
2018 53
2017 53
2016 47
2015 47
2014 62
2013 66
2012 83
2011 85
2010 89

JOHNSON AND JOHNSON
Ratio
100
90
80
70
60
50
40
30
20
10
0
Days
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
The conversion time taken for raw material is 89 days in 2010 which is very high and it has
decreased more in the next years 2014 and 2015 to 47 days and in 2018 it has increased to 53
days which shows that the stock of raw material is very high and therefore the investment is
too high.
b. Finished Goods Inventory conversion period (FGCP)

From this calculation we can find out the efficiency of converting the finished goods to
sales. The faster conversion indicates good management by department.
FGCP= Finished goods Inventory x 360
Cost of Goods Sold

JOHNSON AND JOHNSON
Year Days
2019 79
2018 71
2017 75
2016 82
2015 81
2014 71
2013 65
2012 63
2011 60
2010 54
Ratio
90
80
70
60
50
40
30
20
10
0
Days
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
Finished goods conversion for 2010 was 54 days which improved to 3 years after 2013 and in the
year 2016 it increased to 82 days respectively, which shows the company has to make a lot of
efforts to improve its performance.

JOHNSON AND JOHNSON
c. Work in Process Inventory conversion period:

By this we can ascertain the efficiency of the company in conversion of its work in process
goods to finished goods. Higher period indicates longer time taken for production process.
WIPCP = WIP Inventory x 360
Cost of
Production
Year Days
2019 23
2018 28
2017 32
2016 36
2015 37
2014 38
2013 42
2012 37
2011 28
2010 27

JOHNSON AND JOHNSON
Ratio
45
40
35
30
25
20
15
10
0
Days
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Interpretation:
WIP conversion period was 42 days during 2013 which has much decreased in 2019 to 23
days. As the company outsource its some of the job to contractors for saving cost and quality
work the time taken for the production process has decreased.

JOHNSON AND JOHNSON
FINDING,
SUGGESTIONS AND
CONCLUSION

JOHNSON AND JOHNSON
FINDINGS:
▪ The graph-1 depicts that the inventory turnover ratio of the firm is being increasing trend
which is good for the company. In the year 2010 the ratio is increased to 3.55.
▪ The inventory conversion period has increased from 127 days in 2014 to 135 days in
2015, by this analysis it is found that due to holding the inventory in large that
contributes towards a very higher conversion period.
▪ The inventory to current assets turnover ratio indicates the efficiency of the company in
utilizing the current assets Here inventory comes as current asset. It increased in the year
2017 at 0.20 as compared to previous years. From this we can ascertain that the firm is
fairly utilizing its resources.
▪ As the inventory to total assets ratio has increased from 0.059 in 2013 to 0.062 in 2014, it
reflects the portion the inventory as a percentage of the total assets, which helps the
management deciding the utilization remaining resources profitably, since the inventory
will lock up the huge funds and reduces the profitability of the organization.
▪ The inventory to working capital ratio has increased from 0.58 in 2018 to
0.96 in 2019. It indicates that firm investing huge amount in inventory.
The amount to inventory tied up in the working capital and it also shows the
efficiency of inventory management.

JOHNSON AND JOHNSON
▪ The work –in-progress ratio in the year 2010 was 3.55, in the 2019 it has been decreased
to 3.12, in further year it was increased from 2.69 to 3.12. The above graph shows that
company is showing good performance.
▪ Finished goods conversion for 2016 was 82 days which improved to 75 days in the year
2017 and in the year 2019 it increased to 79 days respectively, which shows the company
has to make a lot of efforts to improve its performance.
▪ WIP conversion period was 42 days during 2013 which has much decreased in 2019 to
23 days. As the company outsource its some of the job to contractors for saving cost and
quality work the time taken for the production process has decreased.
▪ From the study of raw material conversion period we can observe that there is an
improvement in efficiency of control and adequate supply of material.

JOHNSON AND JOHNSON
SUGGESTIONS:
▪ It is also suggested that to company the inventory conversion period should decrease
which help to make constant growth of the company.
➔ We see that the inventory conversion period constantly increased from
2010 to 2015 due to long holdings of inventory, since 2016 it has been
reduced which seems the company has focused on reducing the long
holding period of inventory.

JOHNSON AND JOHNSON
CONCLUSION:
▪ Inventory management is a vital function that helps and ensures the success of
manufacturing companies. Successful implementation of inventory will improve the
entire business significantly.
▪ JOHNSON & JOHNSON Limited enjoys a good stand in the global market and it has
continued to adopt changes to face competition in the market. The production and supply
procedures adopted at Johnson & Johnson are standard one.
▪ The Organization provides good work culture and also adopted some modern
technologies and it has better growth opportunities.
▪ The products of the JOHNSON & JOHNSON, has in-fact, gained a wide acceptance
from the customers and also good response from the potential market of other countries
has continued. Johnson & Johnson is continuously striving to meet the needs of the
customer by regularly introducing new products, and new features to the existing
products.
▪ By Findings and Suggestions it reveals that the company has having good Inventory
Management. It has fully computerized inventory documents so it is more efficient and
effective tool.

JOHNSON AND JOHNSON
▪ Thus, finally we conclude that JOHNSON & JOHNSON is manufacture and sale of a
range of products in the healthcare field. This has sustained growth and future prospects
in near future endeavors. It has efficient inventory management financial strategies
implemented by the finance officers of the company.

JOHNSON AND JOHNSON
ANNEXURE:

JOHNSON AND JOHNSON
Balance Sheet:

JOHNSON AND JOHNSON
BIBLIOGRAPHY:
▪ Financial Management
▪ macrotrends.net
▪ jnj.com
▪ www.wikipedia.com

19MBA115 Prateeksha G P

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KLE SOCIETY’S

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, HUBLI

(Affiliated to Karnataka University, Dharwad &

KARNATAK UNIVERSITY, DHARWAD

Name of the Guide

Date: 31/07/2020 Prateeksha G Prabhuswamimath

I, PRATEEKSHA G PRABHUSWAMIMATH, hereby declare that this project report entitled

Date: 31/07/2020 PRATEEKSHA.G.

Sl.NO. Content Page No.

1 Executive Summary 1-5

2 Industry Profile 6-11

3 Company Profile 12-44

4 Introduction to Study 45-58

5 Research Methodology 59-61

6 Data Analysis and Interpretation 62-78

KLE Society’s Institute of Management Studies and Research, Hubli Page 1

INTRODUCTION TO THE STUDY:

KLE Society’s Institute of Management Studies and Research, Hubli Page 2

TITLE OF THE PROJECT:

“A STUDY ON INVENTORY MANAGEMENT OF JOHNSON & JOHNSON”

OBJECTIVES OF THE STUDY:

➢ To understand the inventory management technique adopted by JOHNSON &

NEED FOR THE STUDY:

A firm should have an adequate level of investment in inventories of raw materials,

KLE Society’s Institute of Management Studies and Research, Hubli Page 3

actual moment of inventories. This entire spectrum of activities is called as inventory

SCOPE OF THE STUDY:

KLE Society’s Institute of Management Studies and Research, Hubli Page 4

KLE Society’s Institute of Management Studies and Research, Hubli Page 5

KLE Society’s Institute of Management Studies and Research, Hubli Page 6

KLE Society’s Institute of Management Studies and Research, Hubli Page 7

The Pharmaceutical segment is focused on five therapeutic areas, including immunology

KLE Society’s Institute of Management Studies and Research, Hubli Page 8

KLE Society’s Institute of Management Studies and Research, Hubli Page 9

Future of the Industry:

Building the Future of Health

Designing the Future of Health

Reimagining the Future of Health

Coding the Future of Health

Latest Innovation of the Industry:

Our response to COVID-19:

• Collaborating to accelerate the development of a vaccine for COVID-19 and have

KLE Society’s Institute of Management Studies and Research, Hubli Page 10

• Mobilizing to provide equipment, our products and financial donations to support

KLE Society’s Institute of Management Studies and Research, Hubli Page 11

KLE Society’s Institute of Management Studies and Research, Hubli Page 12

Traded as NYSE: JNJ

Founded January 1886; 134 years ago

Founders Robert Wood Johnson I

Headquarters One Johnson & Johnson Plaza,

Area served Worldwide

KLE Society’s Institute of Management Studies and Research, Hubli Page 13

Key people Alex Gorsky (Chairman and CEO)

Products See list of Johnson & Johnson products

Revenue US$82.059 billion (2019)[1]

Operating US$17.33 billion (2019)[1]

Net income US$15.119 billion (2019)[1]

Total assets US$157.73 billion (2019)[1]

Total equity US$59.47 billion (2019)[1]

Number of 132,200 (2019)[2]

Subsidiaries Janssen Pharmaceutica

KLE Society’s Institute of Management Studies and Research, Hubli Page 14

KLE Society’s Institute of Management Studies and Research, Hubli Page 15