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Presentation/PPT
27/08/2022
Quality, for me, can be defined as a sound product or service that is delivered at or above my expectation level, as well as the ability create in me a loyalty that guarantees my return. I am old enough to remember the Tylenol scare / recall in 1982, when 7 people in the Chicago-land area died as a result of cyanide-laced Tylenol capsules. Living in Chicago my entire life, it was a huge deal. The drug-maker Johnson & Johnson nearly did not recover from it. The wide-spread pandemonium and panic it caused was palpable. In 1981, Tylenol accounted for 17% of Johnson & Johnson’s net income. (Rehak, 2002) This was before tamper-proof medicine bottles were sold, making sabotage and tampering very easy. No one knew it at the time, but this actually turned out to be an isolated problem dubbed the Chicago Tylenol murders and the case has never been solved. It did however bring to the forefront of all pharma companies, the major importance of packaging, safety and quality.
Immediately after the event, stocks fell to 7% from 37%. Tylenol responded immediately by recalling 31 million bottles of Tylenol capsules and offering free replacement products in tablet form, which was much safer than capsule form. Two months after the crisis, Tylenol was on the rebound slowly making a comeback in the marketplace. They now had tamper-proof packages and blasted the media with a strong campaign, making sure the consumer felt safe using their product. Within 1 year, they had recovered their ground on the market and were back to 30%.
Tylenol’s immediate action placed the consumer and their safety first. This type of recall had never been done before and the company’s chairman, James Burke was admired for his leadership and honesty when it came time for dealing with this crisis and the media. Transparency worked for him. Although it cost Johnson & Johnson over $100 million dollars for the recall and relaunch, it was worth it. There have been at least 2 more recalls and relaunches of Tylenol since then, but their focus on the customer was a major factor in their recovery.
I believe that Johnson & Johnson tries to focus on a zero defects philosophy. Of course there is no way to attain this quality in any product or service. There will always be equipment failures, supply and demand issues, human error and maybe a disgruntled employee to throw the quality off balance. Striving for zero defects is a service standard that demands that you: 1. recognize the high cost of quality issues, 2. continuously think of the places where flaws may be introduced, and 3. work proactively to address the flaws in your systems and processes, which allow defects to occur. (mindtools.com) Johnson & Johnson is a powerhouse pharma company that has and will face many more quality challenges. But I guarantee you that almost everyone has Tylenol in their home. I would say that leaps and bounds have been made to recover from this recall and forced the industry to take safety measures for their own products.
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