M Neelam Kachhap – Bengaluru
Philips Medical System has suspended production of CT scanners at its Cleveland, Ohio manufacturing facility since January 2014. This will result in delay of shipping of products from this facility which manufactures computed tomography and nuclear medicine equipment. The stoppage would affect the delivery of Philips CT products like the Ingenuity products, Philips Brilliance CT Big Bore and the iCTs.
“In our healthcare facility in Cleveland, Ohio, certain issues in the general area of manufacturing process controls were identified during an ongoing US Food and Drug Administration (FDA) inspection. To address these issues, on January 10 (2014) we started a voluntary, temporary suspension of new production at the facility, primarily to strengthen manufacturing process controls,” an official statement from Philips said.
In the past few years this computed tomography and nuclear medicine headquarters of Philips Medical System has received warning letter from the US Food and Drug Administration (FDA), for issues related to quality control, among others. The current and prospective customers looking to buy these products may be affected by the current situation. However, the customers in India have not received any advisory from the company on current issues and expected resolutions. A Krishnakumar, CEO, Philips India did not reply to e-mail queries and was not reachable for comments.
The company estimates that this stoppage will result in the loss of EBITA of approximately euro 60 to 70 million in the first half of 2014. As of now, Phillips claims that it will rectify the situation by the second half of 2014, and start delivering CT scanners thereafter. However, the company will need time to rectify its manufacturing processes and practices to the standards and quality required by the FDA.