When you are a leading supplier of bedside
patient monitoring devices, same-day service contracts are not just a matter
of customer loyalty – they are a matter of life and death. Find out
how Philips Medical improved their customer service levels, trimmed costs
through lower inventories, and raised profits by implementing a parts planning
solution from Baxter.
When Good Service is Critical
If you manufacture cars or computers, getting replacement parts to your customers
is important, but not life threatening. But if you make cardiovascular monitoring
systems for intensive care units, you can’t afford to miss delivery on
a needed part.
This is the situation that Philips Medical faced in early 2001, after the acquisition
of Agilent’s Health Services Group. Already boasting a large number of
products and parts in inventory, the acquisition added thousands more that
needed to be tracked and delivered to Philips’ 300 warehouses around
the world. What’s more, these parts were for critically important medical
devices, like cardiac defibrulators, bedside alert systems and patient resuscitation
devices.
The business pressure to make a new aquisition profitable is intense, and Philips
Medical needed a way to maintain or increase their compliance on same-day contracts
without having to bloat inventory levels. They needed a daily planning and
logistics solution that would allow them to intelligently determine optimal
stocking levels for each of their 60,000 parts at hundreds of locations around
the globe. They needed Baxter.
The Baxter Solution
To keep inventory down and customer service up, Philips Medical turned to Baxter
for service parts supply chain optimization software. Baxter Planning Systems
was their first choice based on Baxter’s ability to go beyond mere cost
savings to using service excellence as a strategic weapon. Prophet by Baxter™ is
Baxter’s software suite that helps Philips Medical determine the precise
geographic locations for their parts warehouses as well as the optimal stocking
levels for each part at each location. In addition, Prophet’s Supply
Forecasting module gives them advanced scenario modeling to help them fine-tune
their service levels on a global scale.
The Results
The Baxter solution was implemented for Philips Medical in 8 weeks, and the
company began seeing customer service improvements immediately. Compliance
on the same-day service calls that are so critical to their business improved
an astonishing 50% over their previous level. Inventory levels dropped 30%,
with a 60% reduction expected as the rollout continues worldwide. Increasing
service levels and reducing inventory is how Baxter helps Philips Medical turn
parts into profit.
