Philips 2006 Annual Report Download - page 83

Philips Annual Report 2006 83Philips Annual Report 2006 83
Each year, Philips Design receives a variety of international awards
recognizing its visionary explorations and ability to humanize
technology. In 2006 alone, Philips Design won 46 awards from
leading design organizations, including iF, IDEA, IDSA and Red Dot
design awards.
Philips Design
Philips Design is one of the largest and longest-
established design organizations of its kind in the world.
It is headquartered in Eindhoven, Netherlands, with branch
studios in Europe, the US and Asia Pacifi c.
Its creative force of some 450 professionals contains more
than 30 different nationalities, embracing disciplines as
diverse as psychology, cultural sociology, anthropology and
trend research in addition to the core and emerging design-
related skills. The mission of these professionals is to
create value for people through superior design solutions.
To realize this, Philips Design has developed a proprietary
methodology known as High Design. High Design is human-
focused and research-based, and takes a deep understanding
of people’s needs as the starting point for the design
process. It also provides the framework for translating
these insights into imaginative yet feasible solutions.
In this way Philips Design is an important driver in
making the brand promise of “sense and simplicity”
tangible. Philips believes it is only by appreciating the
values and motivations of end-users that it can create
sustainable propositions that make sense, are simple
to experience, and enrich the quality of people’s lives.
Philips Design offers a full range of design services to
many different types of clients both within and outside
the Philips organization. Integrated in the business
creation process, design services range from strategy,
design direction and innovation, to identity,
communication and marketing support.
Philips Design has been widely recognized for its visionary
explorations and its ability to humanize technology. Each
year, Philips Design receives a variety of international
awards, such as iF, IDEA, IDSA and Red Dot design awards.
Philips is the third most successful company ever to take
part in the prestigious iF design competition.
Supply Management
The company’s mission for supply management is
to create value by extracting the power of One Philips
and transforming the transactional purchasing function
into strategic supply management.
2006 marks the third year of an ambitious and
comprehensive change program. Supply management
plays a strategic role in value creation, and 70% of Philips’
spend is now centralized or center-led. From 2003-2005,
the total number of suppliers was reduced from more
than 50,000 to less than 25,000. The company is now
focusing on concentration of spend: 80% of the Bill of
Material (BOM) spend is concentrated on fewer than
250 suppliers, and 80% of the Non-Product-Related
(NPR) spend on 1,450 suppliers.
The transformation process, including leveraging of
opportunities in emerging markets accounting for more
than 45% of Philips’ spend, has consistently resulted in
signifi cant savings over the past three years.
Industry
experts have recognized this strong
performance: a study
carried out by a leading consultancy
ranked Philips among
the top quartile of the 200-plus companies surveyed.
54 The Philips sectors
Other Activities
86 Risk management 100 Report of the Supervisory Board 110 Financial Statements