Right first time, every time for Philips Healthcare

Posted on 25 Jul 2013 by Tim Brown
Theresa Dolbert, VP service information supply chain, Philips Healthcare

At the recent PTC Live Service Exchange conference in the US, global medical equipment company Philips Healthcare discussed how they utilise software to ensure reliability because ensuring the quality of their products is truly a matter of life and death.

The global medical equipment company Philips Healthcare makes highly complex machines and systems that are used in hospitals and clinics around the world. Its world-leading reputation is built on innovation – but also on service and system integrity, because its products have to perform reliably throughout the lifecycle.

“What drives us is that with every package we deliver, a person’s life is at stake,” John Schlanger, vice president of service parts supply chain told the audience at the recent PTC Live Service Exchange conference in the US. With so much at stake, Philips pays close attention to customer feedback.

Like other large global service organisations, Philips faced growing complexities that needed to be addressed. Schlanger explains it very openly: “We were fragmented in systems, in geography and in history.” The comments of a respected customer crystallised thinking: “I love Philips. I love your products. I love your service engineers. I love your innovation. But your service parts business is going to force us out of working with you.”

What Schlanger and his colleagues did was to “take a step back” and look at the supply chain business as a whole. “And we decided there were three key principles for the way we wanted to work: we would design the system from the customer inwards; we would divide our business operations into core and non-core activities; and where we decided that something was non-core we would partner with the best and they would do it for us.”

With these principles in mind, Philips broke down its supply chain by processes, by IT infrastructure and by organisations before building it back up. And what emerged very much as the core activity from this strategic self-examination was parts planning: the set of products that the company makes and sells. “No one knows our products as well as we do,” said Schlanger. Aspects such as distribution, purchasing and master data could be outsourced, but product was key.

Unifying parts planning across the group was not simple, he said. There was a range of systems across different locations and extending into partner companies, some of them “home-grown” or using spreadsheets. The system that is now bringing this together is part of PTC’s Service Lifecycle Management solutions, and it has the merit of linking into ERP business systems and of being potentially part of a bigger system handling a wide range of service activities.

In itself, the system is providing measurable benefits, Schlanger said. “We see our fill rates up by 800 basic points (8%), our inventories down 300 and our costs down 200,” he said. But there are intangible measures in terms of customer satisfaction and fewer notes of complaint landing on his desk too.

Supply chain is not the only service activity where Philips Healthcare has been investing in SLM systems. Theresa Dolbert, vice president of service information, supply chain, has been using another aspect to tackle the widespread difficulty of providing correct information for both the training and the operational work done by technicians in the field.

As in the parts planning operation, there had been a complaint, this time from the group’s own staff: “We talked to our field service engineers and they said they were unhappy with us because they were always having to wade through vast number of documents,” she said. Merging the knowledge management system and the training systems into a single information supply chain was the starting point, but the key step has been moving, through systems devised with the help of PTC, from a “document-centric” system to one based on products.

That also, Dolbert said, pointed the way to future developments: with products now the focus of the system, the intention is to migrate the system on to mobile devices that will enable direct interaction with customers, access on site to parts design and service history, and the collection of data for further analysis from customer sites.

With such an innovative response to both external and internal pressures to ensure customer value, Philips Healthcare truly is improving people’s lives.