To:
ICS, EY, KPMG
From:
Ryan Lurie, Supply Operations Chain Manager, GBS North America
Date:
August 9, 2020
Re:
INV06b- Annual Demo Inventory Existence Audit
Normally the GBS DEMO team conducts an on-site physical inventory of all our demo stock — annually, in May. With COVID restrictions and ongoing travel
arrangements/logistics required, this memo is to specify the details of the new timing and procedures per each type of Demo Inventory.
In summary, all field inventory and accessible inventory will procedure as prior years with the audit conducted in August and roll-forward procedures to follow in December. The only
subset of inventory that we are postponing is the SEKO 3PL housed inventory that comprises of Imaging Demo stock. Philips will wait until YE to perform a 100% physical, where
this will also coincide with the new 3PL, McCollisters, transfer (see yellow highlight below).
Demo Inventory Scope & Controls:
As of Q2 2020…
$42 M
Ultrasound
$5.5 M
Imaging
$14.5 M
MATC
INV06a
INV06b
$11 M AllParts (under 149316 ORU)
$20 M Field Inventory (SEKO & Sales Reps)
X
X- Confirmations to Reps/ Inspection and Recon (100%)
$13.5 M 3PL Out House Inventory (SEKO)
X
X- Physical Inspection in Baltimore, MD (100%)
X- Physical Inspection in Nashville, TN (100%)
Cycle Counted Comments
X, 1-2 Days
MATC Andover Demo Equipment to move to AllParts in Q4
X, 1-3 Days
Located in Baltimore,
soon to be McCollisters owned
X, 1-2 Days
Located in Andover, SAP warehousing system. DISC is a tool
receiving the scans on an excel document and provide to
match against our records in SAP.
Excludes $3M of Imaging out on Loan
$8.4 M Field Inventory (Entitlement)
X- Confirmations to Reps/ Inspection and Recon (100%)
$4.9 M In House Inventory (Andover)
X- Physical Inspection in Andover, MA (100%)
Excludes $4.7M of MATC out on Loan
Policy Doc:
WI INV06b_Demo
5123-0028E-Inventory Audit Procedure.doc