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www.pwc.com Philips Lighting Turnhout Practical examples of collaborative innovation Agenda 1. Introducing Philips Lighting Turnhout 2. Introducing Collaborative innovation: a) Our case on wearables in maintenance b) Lessons learned c)


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SLIDE 1

Philips Lighting Turnhout Practical examples of collaborative innovation

www.pwc.com

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SLIDE 2

PwC - Philips

Agenda

  • 1. Introducing Philips Lighting Turnhout
  • 2. Introducing Collaborative innovation:

a) Our case on wearables in maintenance b) Lessons learned c) Next steps

  • 3. Questions

2 March 2016 Supply chain innovations

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SLIDE 3

Philips Turnhout

Philips Lighting, BG Lamps Operations, Turnhout

Jan Melis 2016 March 7th

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SLIDE 4

PwC - Philips

Philips Cat Professional

43% 37% 20%

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Philips

Our business

Philips Healthcare Philips Lighting Philips Consumer Lifestyle

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Improving people’s lives through meaningful innovation

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SLIDE 5
  • Turnhout, Belgium
  • World Class high end Burner Manufacturing

for HID, Digital Projection & Specialties

  • Competitive HID and SL Lamp Assembly for

EMEA and global niches

  • Global Development R&D Center for HID and

DPL

  • Externally certified Q-lab, specialized in light

measurement

  • Mechanization on site (PiNS), specialized in
  • n-line vision system, small part handling and

laser welding

  • Founded in 1955, continuously growing till

2008 (top year 2800FTEs). Heavy restructuring in 2009 & 2012 & 2015-2017

  • Lamps ~ 17 mio pcs, more than 500 different

technical types & concepts

  • Production in shifts where needed 24hrs / 5
  • days. Temp unemployment for flexibility.

KEY FACTS

  • 830 FTEs, of which 150 white color ops, 500

blue color ops, 75 R&D, 65 BG Lamps and 40 PiNS

  • 250 M€ Sales (2015).
  • CAPEX: 2.5 M€ (2015)

LOCATION KEY DATA

Turnhout LS&E plant

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SLIDE 6

Philips Turnhout: market leader in professional lighting

Digital Projection Lighting

Outdoor Indoor Sports Horticulture

General HID

Outdoor Indoor Sports Horticulture

General HID Special Lighting Special Lighting

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Leading the way VIDEO

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SLIDE 7

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Philips Cat Professional

Philips HID Lighting Solutions, our position

Some additional figures

More than 55% of all major sports event arena’s are equipped by sports lighting from Philips

  • Approx. 45% of all roads in

Europe are illuminated by Philips HID lamps

  • Approx. 35% of all HID lamps

worldwide are produced by Philips

  • Approx. 75% of all HID lamps

used in retail lighting are made by Philips

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SLIDE 8

Growth Maturity Decline

TIME

Incandescent Halogen CFL SON/HPI Fluo LED Cinema CDM Eco-Halo

Introduction

Operational Excellence during the entire Product Life Cycle

Pcs/EUR

Reliably deliver against lowest integral cost

Make & Execute cost roadmaps relentlessly

Reliably realize growth

Quality, Innovation

but also cost

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Philips Turnhout wants to gain market share in a declining market

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SLIDE 9

Our sales decline 15% per year but this remains a profitable market for long

Indoor -30%, Outdoor and Spec -10%, DPL stable, HORTI growing Due to LED penetration, e-commerce, China & economic crisis

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SLIDE 10

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Philips Cat Professional

Vision : Winning the Golden Tail in conventional lighting

Philips strategy: Dual strategy: Winning in LED And Managing the Golden Tail in conventional

  • Headlines to win the Golden Tail in conventional
  • Commercial
  • Capture growth opportunities
  • Make it easy to sell
  • Strict pricing strategy
  • Industrial
  • World class operational performance and continuous improvement
  • 3 Focal areas: Cost/ Quality and Supply Chain performance
  • LEAN program is one of the most important programs
  • Adapted R&D (Development) program

Change focus from product innovation to cost innovation

  • Employability program

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SLIDE 11

PwC - Philips

Agenda

  • 1. Introducing Philips Lighting Turnhout
  • 2. Introducing Collaborative innovation:

a) Our case on wearables in maintenance b) Lessons learned c) Next steps

  • 3. Questions

11 March 2016 Supply chain innovations

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SLIDE 12

A possible collaboration in 3D Printing

Supply chain innovations

Collaborative innovation is a concept where different stakeholders in the supply chain join their competences around a supply chain challenge or opportunity.”

The joint result will be better than the individual pieces.

+ + =

PwC @ SCI 2015 with 3D printing Big data Smart sensors Smart robotics Artificial intelligence PwC @ SCI 2014 with Google glass

Industry expertise Company needs & insights Supply chain expertise Linking process & technology Technology expertise State of the art solutions Supply chain innovation

Smart supply chain

Emerging technologies

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SLIDE 13

A possible collaboration in 3D Printing

Werabales in maintenance

2a) Wearables in field maintenance

Introducing the case

The joint result will be better than the individual pieces.

+ + =

Industry expertise Company needs & insights Supply chain expertise Linking process & technology Technology expertise State of the art solutions Supply chain innovation

+ +

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SLIDE 14

PwC - Philips

2a) Wearables in field maintenance

The approach

Roll out Pilot Demo Discovery

  • Be inspired
  • Selecting demo

process

  • Try out
  • Pilot scope
  • Pilot

implementation

  • Feedback to

technology provider

  • Identification of

new application areas

  • Providing overview
  • f technology and

potential benefits

  • Providing demo

hardware

  • Setting up demo

process

  • Distance support
  • Capture learnings
  • New application

areas in maintenance and

  • perations
  • Minimum viable

product

  • Providing demo

software

  • Technical support
  • Technical

improvements

  • Technology next

steps

1 day 2 wks 10 wks

14 March 2016 Supply chain innovations

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SLIDE 15

PwC - Philips

2a) Wearables in field maintenance

Discovery

Roll out Pilot Demo Discovery

Linking business challenges and opportunities with new technologies:

15 March 2016 Supply chain innovations

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SLIDE 16

PwC - Philips

We started with 1 machine and 1 checklist procedure from facility maintenance:

Weekly routine:

2a) Wearables in field maintenance

Demo

Roll out Pilot Demo Discovery

16 March 2016 Supply chain innovations

Technician ‘s desk Machine

 No real time information  No trend monitoring  Only reactive maintenance  Double registration  Risks for errors  Reporting

Weekly report to supplier

Process inefficiencies:

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SLIDE 17

PwC - Philips

We started with 1 machine and 1 checklist procedure from facility maintenance:

Weekly routine:

2a) Wearables in field maintenance

Demo

Roll out Pilot Demo Discovery

17 March 2016

Old process New process

Investment = 0 € (hardware provided by PwC) Resource = 1 day (to setup solution)

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PwC - Philips

Results after 2 wks:

2a) Wearables in field maintenance

Demo

Roll out Pilot Demo Discovery

18 March 2016

People Process Technology

  • Enthusiasm created
  • Acceptance by people
  • User feedback
  • Insight in hardware
  • Insight in software
  • Process improvement proven
  • Improvement area’s identified
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PwC - Philips

  • In a period of 3 months, all facility maintenance procedures were

implemented in Proceedix

  • The software was upgraded several times, based on our feedback
  • Some pictures:

2a) Wearables in field maintenance

Pilot

Roll out Pilot Demo Discovery

19 March 2016

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SLIDE 20

PwC - Philips

2a) Wearables in field maintenance

Pilot

Roll out Pilot Demo Discovery

20 March 2016

Pilot results:

 The whole solution is implemented and used by all facility maintenance technicians  This enabled us to have a soft saving of 6 % on our facility budget

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SLIDE 21

PwC - Philips

2a) Wearables in field maintenance

Roll out

Roll out Pilot Demo Discovery

21 March 2016

Maintenance:

 We will implement this solution also for other teams and procedures  We are looking into involving our suppliers for shared maintenance

Other functional areas:

 We see added value for all operations teams to create a paperless factory:

 Eg. Out of control action plans for operators  Autonomous maintenance checklists  Quality checks – registration sheets

 Our solution has been shared on our local improvement market

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PwC - Philips

Agenda

  • 1. Introducing Philips Lighting Turnhout
  • 2. Introducing Collaborative innovation:

a) Our case on wearables in maintenance b) Lessons learned c) Next steps

  • 3. Questions

22 March 2016 Supply chain innovations

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PwC - Philips

2b) Lessons learned

23 March 2016

+ + =

Industry expertise Company needs & insights Supply chain expertise Linking process & technology Technology expertise State of the art solutions Supply chain innovation

  • We never considered the use of wearables in our processes before we started
  • Think big, start small
  • The demo was crucial to convince us, and didn’t require any investment (no

hurdles)

  • By approaching this in a practical and pragmatic way, we were able to motivate our

people and create enthusiasm

  • We didn’t need to innovate alone, the power of this setup is the collaboration
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PwC - Philips

2c) Next steps

24 March 2016

Emerging technologies

+ + =

Industry expertise Company needs & insights Supply chain expertise Linking process & technology Technology expertise State of the art solutions Supply chain innovation

  • Running topic for collaborative innovation = 3D printing in our spareparts supply

chain

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SLIDE 25

PwC - Philips

Agenda

  • 1. Introducing Philips Lighting Turnhout
  • 2. Introducing Collaborative innovation:

a) Our case on wearables in maintenance b) Lessons learned c) Next steps

  • 3. Questions

25 March 2016 Supply chain innovations

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SLIDE 26

PwC - Philips

Questions

March 2016 Supply chain innovations 26