Building on strength !
2010 style Purchasing in a fast moving world
Ard Verboon
Director Purchasing
Philips Consumer Lifes...
Philips TV tries to make a difference in a world of
  similarity, continuously looking for differentiation
         Philip...
Competing with formidable players



                                       Global
                                     co...
We use a variety of business models, and benchmark
  what the others are using

                                          ...
And select partners allowing us to synergize on
  complimentary strength, in asset light business model




Confidential  ...
In order to support an 20% annual price erosion




Confidential                                        6
Purchasing plays a pivotal role in supplier and partner
  relationship orchestration




          Catalogue items   Custo...
which requires understanding of the full chain, and not
  one of powerplay and negotiation




Confidential               ...
In 2004 we developed a cost staircase to make cost a
  joint responsibility, and have built on this ever since


         ...
Design In Workshops require pro-active cross
  functional engagement where impact is maximum




Confidential             ...
And offer suppliers opportunity to contribute their
  brainpower and unique strengths
               Encouraging working t...
On 21st April 2009, a total of 19 suppliers
             from all over the world ascended on
    Philips Singapore for 201...
Over the 3 days workshop, suppliers and Philips
           worked hard to achieve the cost targets




CONFIDENTIAL
A total of   87 ideas were generated during
                               the 3 days workshop

There were 68 specificatio...
We drive joint management agenda’s to help set the
  pace and if necessary shape the industry
        Topic
              ...
And with ‘anchor costing’ we are now learning to speak
  the language of marketing
                Set type / region
     ...
In 2009 Value Engineering was re-invented with a
  focus on ‘learning organisation’




                                  ...
Leading to simpler TV’s every generation




Confidential
Which – all combined – brings us close to the holy
  grail: joint and shared cross-functional target setting


  • On time...
But high performance purchasing does not come falling
  out of the sky
                              We measure Employee E...
It requires a very strong team, teamwork, continuous
  role modeling and high performance standards
                      ...
CONFIDENTIAL
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Marcus Evans Presentation Feb 4th 2010

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Marcus Evans Presentation Feb 4th 2010

  1. 1. Building on strength ! 2010 style Purchasing in a fast moving world Ard Verboon Director Purchasing Philips Consumer Lifestyle 1
  2. 2. Philips TV tries to make a difference in a world of similarity, continuously looking for differentiation Philips Aurea, ambilight and 21:9 A sea of similarity To VTM To VTM 6-month launch window 6-month launch window Confidential
  3. 3. Competing with formidable players Global competition Regional specialization Segment specialization Confidential 3
  4. 4. We use a variety of business models, and benchmark what the others are using In house Toshiba AmTRAN LGE Compal Daiwoo Sharp Hon Hai Innolux Sony Sampo Tatung Samsung TPV Qisda Philips Vestel 0% 20% 40% 60% 80% 100% Wistron TCL Source: iSupply 2009 Confidential 4
  5. 5. And select partners allowing us to synergize on complimentary strength, in asset light business model Confidential 5
  6. 6. In order to support an 20% annual price erosion Confidential 6
  7. 7. Purchasing plays a pivotal role in supplier and partner relationship orchestration Catalogue items Custom developed Supply eco- parts systems Source : IMD,Carlos Cordon, Philips Confidential 7
  8. 8. which requires understanding of the full chain, and not one of powerplay and negotiation Confidential 8
  9. 9. In 2004 we developed a cost staircase to make cost a joint responsibility, and have built on this ever since R&D Quality F&A Marketing SCM Cost Engineering Confidential 9
  10. 10. Design In Workshops require pro-active cross functional engagement where impact is maximum Confidential 10
  11. 11. And offer suppliers opportunity to contribute their brainpower and unique strengths Encouraging working together …and driving specification, lean and green Confidential 11
  12. 12. On 21st April 2009, a total of 19 suppliers from all over the world ascended on Philips Singapore for 2010 TV’s Design in-Workshop CONFIDENTIAL
  13. 13. Over the 3 days workshop, suppliers and Philips worked hard to achieve the cost targets CONFIDENTIAL
  14. 14. A total of 87 ideas were generated during the 3 days workshop There were 68 specification ideas, 7 efficiency ideas and 2 ecology ideas. CONFIDENTIAL
  15. 15. We drive joint management agenda’s to help set the pace and if necessary shape the industry Topic •New Product Introduction for 2009 range in factory according plan Operational Excellence •Solid project management and regular management reviews to track project progress •by product launch product cost should be better then the costs quoted at business award Joint growth •Joint innovation roadmaps in place in Nov. ’08 for at least 2010 with a focus on Europe, China Confidential 15
  16. 16. And with ‘anchor costing’ we are now learning to speak the language of marketing Set type / region Anchor spec based on credible benchmark Confidential 16
  17. 17. In 2009 Value Engineering was re-invented with a focus on ‘learning organisation’ Source: Philips VE team Confidential 17
  18. 18. Leading to simpler TV’s every generation Confidential
  19. 19. Which – all combined – brings us close to the holy grail: joint and shared cross-functional target setting • On time Volume-to-Market • On cost Project Justification • On quality Cost of non-Quality Confidential 19
  20. 20. But high performance purchasing does not come falling out of the sky We measure Employee Engagement and People Leadership Indicators 1. I feel that I am part of a team 2. My management acts as a role model for sense and simplicity 3. The management style in this organization brings out the best in employees 4. There is good cooperation between my department and other departments 5. My management deals effectively with poor performers 6. I feel proud to work for Philips [and more] Confidential 20
  21. 21. It requires a very strong team, teamwork, continuous role modeling and high performance standards …. and fun! Confidential 21
  22. 22. CONFIDENTIAL

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