How Philips Medical Systems implements circular economy

There are only a handful of manufacturers of X-ray tubes worldwide. One of them is Philips Medical Systems from Hamburg. The fact that they have been producing these alongside high-voltage generators for X-ray systems for more than 100 years is not the only special feature of the Factory of the Year winner in the category 'Excellence in Sustainability'.

Dieter Dude, Plant Manager Factory Hamburg, adds: "We have also integrated Design for Remanufacturing as a principle here for 30 years because we use high-quality, expensive materials in manufacturing that must function at temperatures above 2,000 °C. Therefore, we already consider during development how to restore parts obtained from returns to the condition of a new part and reintroduce them into the process."

The principle also applies to waste in manufacturing. "If a product is developed in such a way that it ends up in the scrap when it fails, then the entire material and labor input has been wasted. However, you can also develop a product so that it can be disassembled and parts reused," Dude cites as an example of a result from the close and long-standing collaboration between development, manufacturing, and research, which have never been separated at the site.

Additional effort also brings financial advantage

“Initially, this was a small activity for us and was primarily dedicated to wear-free parts,” Dude recalls the time when the approximately 200 square meter remanufacturing idea workshop was still located in a corner of the production area.

Meanwhile, this area has an entire floor at its disposal. “If you ignite the fire in an organization, it can only burn permanently if you have someone who drives it and the organization has also understood that it makes sense to get involved there and to think about it with every new development,” reveals the plant manager the recipe for success of remanufacturing.

In the end, this additional effort in development is not only sustainable but also brings a financial benefit: “Because we have built an internal cycle, we are now at over 150 tons of raw materials, which make up about 25 percent of our material usage and which we did not have to purchase. In addition, several million kilowatt hours of energy are saved in the production of suppliers.”

Plant has become more resilient

Since the plant is partly its own supplier through remanufacturing, it is more resilient to supply chain disruptions on the one hand, and on the other hand, it can ensure a stable supply of components with volatile demands. With parts that are sometimes even better than new parts, as Dude knows: “If you use these parts that have been restored to a like-new condition in a high vacuum, which have already been in a high vacuum for a few years, then quality and performance are better than those that come directly from the smelter.”

In new parts, there are always microparticles that escape in high vacuum over the years. "In the last ten years, we have increased the amount of recovered parts sevenfold through the form of the circular economy," Dude is pleased with the lived culture of responsibility transfer and the inexhaustible creativity of his employees.

"For quite some time now, we have had the opportunity to submit our own improvement suggestions digitally. Simply because there are many dedicated people who work with the materials and wonder why they can't be restored to their original state," Dude continues.

The plant uses digital solutions strategically

Continuous improvement at the winning plant is not limited to "the ever-faster spinning flywheel of sustainability and circular economy," as Dude calls it. For a victory at the Factory of the Year, the targeted use of digital solutions for improving operational excellence was also crucial for the consulting firm Kearney.

One of these is automated statistical process control with an automatic early warning system. In mass production, such a solution is not unusual. "But we only produce around 10,000 products a year. And because we also have an extremely vertically integrated production, which includes glassblowing, electroplating, and mechanical processing, we come more from a manufacturing background and can only automate to a certain extent. So having a flow control with an early warning system is already unique in small series production," Dude finds.

However, it is also necessary because Philips Medical Systems operates at the limits of physics, which means that solving problems can sometimes take several weeks.

Professor Schuh was the trigger for the application

An application to participate in the benchmark competition had been discussed repeatedly in the past, but they never dared to do it. It was only the lecture on the circular economy by Prof. Dr. Günther Schuh at the last Factory of the Year congress that gave the impetus. “The victory has opened our eyes a bit, that we are doing what we do here very well,” says Dude with North German modesty.

And so he hopes to be able to further roll out the design for sustainability approach within the company, because “I believe that, also due to the cultural change that has occurred here over the decades, you can certainly inspire others with this idea.”