Johnson & Johnson Overhauls Pharma’s B2B ‘Ecosystem’ with Embedded Payments

It may seem like a lifetime ago, but it was only two years ago when supply chains were at a standstill.

And that standstill was a matter of life and death — quite literally. In the race against the insidious pandemic, pharmaceutical firms scrambled to develop vaccines, get them manufactured, and make sure the critical drugs (and in other cases, medical equipment, etc.) got where they needed to go — to providers and individuals and families.

Johnson & Johnson Head of Digital Transformation and Supply Chain Sarfraz Nawaz told Karen Webster that even though some of the most critical moments of the global healthcare crisis may have (thankfully) receded into the not-so-distant past, some lessons remain. Namely, supply chains must modernize.

Now the volatility comes amid soaring inflation, unpredictable geopolitical events and even the challenge of making sure that smaller suppliers can keep operations humming.

Embedded finance, he said, has the potential to have a “big impact on solving” supply chain issues.

He noted that embedded payments and finance are now key weapons in navigating and solving the inflation and inventory conundrum. To get there, embedded finance must be more than a back-office consideration — it’s now a strategic tool.

In recent years and months, he said, Johnson & Johnson has been leveraging its infrastructure to provide payments and decisioning layers that digitize workflows, stretching from procurement to extending credit to suppliers — with positive ripple effects for treasurers and chief financial officers (CFOs).

Stakeholders, he said, “benefit from contextual, seamless experiences and platforms that unlock new use cases and improve financial access.” Data science helps firms (J&J among them) measure goals and benchmarks and to see how existing assets are being used.

“Embedding finance and payments is an integral component here,” he said, and helps inform how the company approaches everything from how it can use the cloud, digital and data science and optimize its infrastructure — and help partners optimize their infrastructure.

The advent of advanced technologies, he said (including blockchain), means that companies can stay true to their long-term objectives while at the same time ensuring they are adaptable and agile when it comes to responding to near-term and unforeseen challenges and changes.

“Having the ability to access through one digital platform or a standard digital platform means businesses are able to operate more efficiently by integrating these diverse strands of operations into an intuitive sort of one-stop shop,” he told Webster.

To that end, as commercial transactions modernize, it becomes possible to make and receive payments and provide access to financing and value-added services easier across to all trading partners, he said.

“This enhances operations and overall liquidity across the board,” said Nawaz.

That liquidity is especially important to smaller suppliers who are so critical to the health of the pharma vertical and the economy at large as supply and demand volatility and raw material or logistics challenges can be addressed more adroitly.

“It’s an end-to-end strategy,” he said of the post-pandemic approach — and a sustainable one that creates operational excellence across the entire supply chain, moving beyond payments processing to drug discovery itself.

Looking into the next year (and beyond), Nawaz said Johnson & Johnson would focus on scaling its innovations (including through partnerships) to improve delivery and distribution of drugs.

“We’ll be looking at the collective action that’s needed to overhaul and streamline the ecosystem to make sure it’s more intelligent, accessible and responsible for everyone involved,” he said.