Philips 2013 Annual Report Download - page 15

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Annual Report 2013 15
LED façade lighting faster to market
Through our end-to-end transformation program, we
have identified and driven improvements along the
entire LED value chain in China. This has resulted in a
broad range of competitively priced façade lighting
solutions for the mid-tier market segment in China, with
a 40% reduction in time-to-market for new product
introductions and a significant increase in on-time
delivery.
In 2012, market intelligence showed that we were
missing out on the LED façade lighting segment in
China – a segment predicted to reach € 520 million by
2015, 70% of which will be taken by mid-range
solutions. The problem was that in China we only
oered top-range LED façade solutions. Clearly,
something had to be done.
An end-to-end transformation program was
immediately initiated, and a cross-functional team
representing both the business and our market
organization was assembled to address all
opportunities along the value chain. The team took
ownership of the common goal to achieve ambitious
cost targets. It invested in market research and started
with market sizing and customer segmentation, before
developing imaginative strategies for product
positioning, go-to-market and time-to-market. From
the outset, everyone knew that the new product line
had to be conceived, developed and fine-tuned
extremely quickly.
The result was a new range of competitive LED façade
lighting solutions specially designed for the mid-range
market in China. And all in just under 28 weeks – a
massive reduction compared to the 12 months it
previously took to bring a new product line to market.
Another benefit of this end-to-end collaboration is that
achievement of the delivery time target of 25 days has
increased from 43% to 66%, with a further rise to 95%
expected by 2015.