Royal Philips Electronics announces it has selected UPS to redesign and operate its global service parts logistics (SPL) network in a move to significantly improve customer service at its Medical Systems division.

UPS has been given the task of ensuring Philips Medical customers in 50 countries around the world receive parts according to service level agreements, including same day delivery for critical parts delivery and return services.  That contrasts with the current practice of next business day service.  The UPS-designed network will replace a regional response system utilising 12 logistics providers in about 40 locations.

As part of the global SPL contract, UPS will provide material storage and inventory management, order fulfillment, inbound and outbound transportation, global visibility and reporting, as well as inspection, re-packaging and labeling.

The five-year contract culminates a search by Philips Medical for a lead logistics provider.  UPS will provide the critical parts distribution, the hold-for-pickup and return services from the UPS Supply Chain Solutions global network of more than 1,000 facilities, including the central distribution centres in Louisville, USA; Roermond, the Netherlands; Singapore; Shanghai and more than 100 global SPL facilities.

Philips Medical is raising the bar for service in its industry and UPS is excited by the opportunity to be part of this effort, said Bob Stoffel, UPS senior vice president, Supply Chain Group.  We already have a close relationship with Philips Medical and we look forward to helping Philips further streamline its complex transportation and logistics operations.

Royal Philips, which is one of UPSs largest enterprise customers, designated UPS as one of its 26 Global Strategic Partners in 2005 and invited UPS to participate in its Supplier Forum.  That relationship led to the creation of a Master Logistics Agreement between the two companies that covers all potential UPS services, including global transportation, distribution and logistics.

Currently, UPS is providing the Philips companies with:

  • Package and express delivery and air freight transportation in the U.S., Europe and Asia Pacific
  • Transportation and installations of cardiovascular and x-ray equipment for Philips Medical in Europe and Asia 
  • Trade Direct Air services of semiconductors from Asia to Europe for Philips Semiconductors
  • Customs brokerage services in the U.S.

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