Health tech leader Philips shares sustainability ambition
Health technology company Royal Philips has unveiled its sustainability impact plan, including decreasing the number of staff and reenforcing supply chain reliability.
Helping patients and consumers live healthier lives
Philips believes that there’s always a way to make life better and has been working for 130 years to help people live healthier lives - from focusing on fighting the spread of disease to ergonomic shaving products to clear lighting.
Founded in 1891 in Eindhoven, the Netherlands, by father and son Frederik and Gerard Philips, the company helped introduce electricity to consumers and then many electrical products. Post-war, Philips Research developed healthcare technology using UV light, magnetic materials and more.
In the last ten years, the company has truly become a focused leader in health technology.
Now, it looks forward to a sustainable future - but it’s one that comes at a cost.
The global Philips workforce will be reduced by 6,000 roles by 2025, to increase savings and competitiveness.
Philips is also redesigning its products to remove risks from supplies and delivery. It is hoped that this will build more predictable financial results.
The company plans to focus on progressive value creation by uplifting the impact of patient-centric innovation. The key value priorities will be:
1) Patient safety and quality
2) Supply chain reliability
3) A simplified, more agile operating model. This will be supported by a reinvigorated culture of accountability, and strong health technology talent and capabilities.
Royal Philips to enhance supply chain reliability
Roy Jakobs, CEO of Royal Philips, said that while he was proud of the 130 year old company, he felt that there was room for improvement within, to safeguard the future.
“Philips has built leading market positions based on meaningful innovations and high customer intimacy, further supported by a compelling purpose, a strong brand, and clear ESG commitments. However, given our significant operational challenges, we are not fully extracting the full value of our businesses, as also reflected in our 2022 results.
“During my first 100 days, I have worked with our team on the urgent interventions needed to improve our execution and performance. This includes bolstering our culture with enhanced accountability and strengthening our health technology talent and capabilities.
“Our strategy will focus on organic growth through patient and people-centric innovation at scale, with a strong improvement in execution as key value driver. This will be enabled by strengthening our patient safety and quality management and completing the Respironics recall. We will also urgently enhance the supply chain reliability to improve performance and simplify our way of working to improve our agility and productivity. This includes the difficult, but necessary further reduction of our workforce by around 6,000 roles globally by 2025.”
Jakobs is confident that this plan will put Philips on a continuous path to sustainable value creation.