Philips ramping up imaging production following COVID-19 supply chain disruption

Manufacturer Philips said it is ramping up production of its imaging systems amid an increase in demand during the coronavirus outbreak.

Earlier this month, CEO Frans van Houten said its supply lines in China were recovering from shutdowns caused by the COVID-19 outbreak. The disruption is expected to affect it first- and potentially second-quarter results. And while the situation has tugged down consumer demand, CT scanner orders have swelled, with dozens rolling in recently.

“We are ramping up our production in China, where we are now above 80% capacity utilization,” he said in a statement issued Wednesday. “To meet increased demand for our professional healthcare products and solutions, we are in the process of increasing their production and roll-out. In particular, this relates to certain diagnostic imaging systems, patient monitors and ventilators,” van Houten added later.

All told, Philips has six factories in China that produce a range of imaging products including ultrasound machines, respiratory masks, and CT scanners, Reuters reported. The CEO noted March 4 that, if factories remain at 80% rather than full capacity, “we will have a problem in the second quarter as our stocks will dry up."

In this week’s statement, van Houten further noted that the Philips Foundation is working with teams in Kenya, South Sudan and Italy to help support healthcare systems that have been “deeply impacted” by the outbreak. The company previously donated imaging systems to aid in China’s response.

And like many other employers in the field, Philips said it is taking extra precautions to keep employees safe—implementing personal hygiene measures, business travel restrictions and a global work-from-home protocol.

Though the World Health Organization has labeled the coronavirus outbreak a global pandemic, it still believes the situation is controllable, and van Houten said he agreed.

“While I am very concerned about the situation, provided the world mobilizes and collaborates appropriately, we share the view of the WHO,” he said in the March 18 statement. “I cannot stress enough that this is a top priority for all of us at Philips.”