Philips 2012 Annual Report Download - page 19

3 Our strategy in action 3 - 3
Annual Report 2012 19
End-to-end journey with Wal-
Mart
In North America we are working together with Wal-Mart to optimize every step in the
value chain of our Male Grooming business. This end-to-end approach is transforming our
relationship and benefiting Wal-Mart shoppers.
Philips Norelco is the leading brand in the electric shaver
market in North America. Continuing to strengthen the
business, Male Grooming North America embarked on an
end-to-end journey with three key areas of focus:
understanding the consumer, partnering with our
customer to grow our businesses together, and
transforming our business so that it is faster and more
responsive to specific local needs.
Step by step
We started by taking a granular look at consumer needs
and aspirations in the North American market. Armed
with breakthrough insights, we then turned to Wal-
Mart, one of our largest customers.
The shaving and grooming aisle is important to Wal-
Mart to meet the needs of their male shoppers. They also
seek to cater to the diverse consumer needs of the
American population, supporting their ‘store of the
community’ strategy.
Next, we reviewed our own performance, finding
significant opportunities to optimize our end-to-end value
chain in terms of lead time, inventory, and cost of non-
quality.
The final step was to make the change happen. We are
moving from a ‘push’ to a ‘pull’ inventory model, enabling
our North American business to order only what it really
needs for its customers and resulting in significantly lower
inventories. We have also stepped up investment in our