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9/13/2015 September 2015, p.1Supply Chain Insights Global Summit #ImagineSC
Supply Chain TransformationThe Eastman Chemical Company Journey to Be
a Supply Chains to Admire Winner
Kevin PruittDirector, Supply Chain Execution & Global Logistics
Eastman Chemical
9/13/2015 September 2015, p.2Supply Chain Insights Global Summit #ImagineSC
9/13/2015 September 2015, p.3Supply Chain Insights Global Summit #ImagineSC
Eastman Chemical Company
• A global specialty chemical company headquartered in Kingsport, Tennessee• Approximately 15,000 employees and over 50 manufacturing sites around the
globe• Serving customers in approximately 100 countries• A company dedicated to environmental stewardship, social responsibility and
economic growth• 2014 ENERGY STAR® Partner of the Year Sustained Excellence• 2014 Ethisphere’s World’s Most Ethical ® Companies• 2015 Glassdoor Employees’ Choice Best Places to Work (# 30)• $10.5B Revenue
9/13/2015 September 2015, p.4Supply Chain Insights Global Summit #ImagineSC
A long history of creative thinking and industry solutions
9/13/2015 September 2015, p.5Supply Chain Insights Global Summit #ImagineSC
Journey toward specialty chemical company
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Diversity is a source of strengthEnd-market and geographic diversity contribute to consistent
earnings and cash flow growth
9/13/2015 September 2015, p.7Supply Chain Insights Global Summit #ImagineSC
Eastman is a market leaderof our sales revenue is from product lines in leading market positions2/3
9/13/2015 September 2015, p.8Supply Chain Insights Global Summit #ImagineSC
Eastman’s Integrated Supply Chain is:
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Integrated Global Supply Chain Transformation Journey
9/13/2015 September 2015, p.10Supply Chain Insights Global Summit #ImagineSC
Key “Takeaways” for successful supply chain transformation
• Focus on your customers
• Integrate procurement and supply chain operations
• Continually develop and improve capabilitiesPeople, Process, & Technology
• Align / collaborate with business partners
• Create value that contributes to business success
9/13/2015 September 2015, p.11Supply Chain Insights Global Summit #ImagineSC
It is an on-going journey
9/13/2015 September 2015, p.12Supply Chain Insights Global Summit #ImagineSC
Key “Takeaways” for successful supply chain transformation
• Focus on your customers
• Integrate procurement and supply chain operations
• Continually develop and improve capabilitiesPeople, Process, & Technology
• Align / collaborate with business partners
• Create value that contributes to business success
9/13/2015 September 2015, p.13Supply Chain Insights Global Summit #ImagineSC
Integrate Supply Chain & Procurement Operations
Integrated Global Supply Chain
Global Supply ChainVice President
Global Procurement Vice President &
Chief Procurement Officer
Supply ChainExecution Logistics
DirectProcurement & Alternate Methods Of Supply
IndirectProcurement
9/13/2015 September 2015, p.14Supply Chain Insights Global Summit #ImagineSC
9/13/2015 September 2015, p.15Supply Chain Insights Global Summit #ImagineSC
Integrated Global Supply Chain Organizational Strategy
9/13/2015 September 2015, p.16Supply Chain Insights Global Summit #ImagineSC
Advantages of an integrated philosophy and approach Supply chain processes are cross functional - optimization of the processes
requires integration of the functional organizations
Capabilities are enhanced with a talent management strategy that moves employees throughout the various functions.
Common objectives, goals, initiatives and measures ensure the optimization of the corporation
“dashboard” of integrated metrics
The ultimate objective is to be a reliable supplier to our customers
The integrated approach to supply chain management enables our service and reliability
“to be the reason customers do business with Eastman”
9/13/2015 September 2015, p.17Supply Chain Insights Global Summit #ImagineSC
Key “Takeaways” for successful supply chain transformation
• Focus on your customers
• Integrate procurement and supply chain operations
• Continually develop and improve capabilitiesPeople, Process, & Technology
• Align / collaborate with business partners
• Create value that contributes to business success
9/13/2015 September 2015, p.18Supply Chain Insights Global Summit #ImagineSC
Continually develop and improve capabilities
Business management
skill set
Transactional talentprofile
High performing
analytical & leadership capabilities
• Develop a high performing workforce• Sustain knowledge and expertise globally – robust “bench” &
succession plans• Enhance leadership skills• Utilize advancing technology to automate - improve productivity
and service
9/13/2015 September 2015, p.19Supply Chain Insights Global Summit #ImagineSC
Center of Excellence – Key to driving improvement
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Integrated Global Supply Chain “Roadmap”
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Critical Success Factors for driving transformation and improving capabilities
Developed structured “roadmap” – aligned priorities across the organization
Championed by leadership of the organization
Developed governance process for each initiative
Formed Center of Excellence – dedicated resources to drive improvement
Formed partnerships with IT and Businesses to complete initiatives
Demonstrated value achieved as progress was made
Implemented solutions globally
9/13/2015 September 2015, p.22Supply Chain Insights Global Summit #ImagineSC
Key “Takeaways” for successful supply chain transformation
• Focus on your customers
• Integrate procurement and supply chain operations
• Continually develop and improve capabilitiesPeople, Process, & Technology
• Align / collaborate with business partners
• Create value that contributes to business success
9/13/2015 September 2015, p.23Supply Chain Insights Global Summit #ImagineSC
Align and collaborate with internal business partnersProactive business alignment
Reactive to business
Business partnership
React to business requests
Proactively lead initiatives in support of
business strategy
Champion initiatives that contribute to business results
• Align resources with business management and S&OP teams• Gain and share market insight • Provide commercial and contract expertise • Accurately forecast materials, services, and distribution costs• Develop options or solutions for business issues / challenges • Champion initiatives to execute business strategy • Deliver value
9/13/2015 September 2015, p.24Supply Chain Insights Global Summit #ImagineSC
Enable business success
Bottom line, value focus
Purchase price focus
Value, growth focus
Driven by cost Driven by valuecontribution
Driven by value contribution to enable growth
• Balance service, cost and working capital• Consistently deliver value greater than the cost of the organization• Drive strategic savings projects in:
• Procurement strategies for services and material• Network optimization for lower distribution cost and working capital• Trade and duty optimization• Supply planning and asset optimization
• Ultimately be viewed as a Value Partner rather than a Cost Center
9/13/2015 September 2015, p.25Supply Chain Insights Global Summit #ImagineSC
IGSC – Must Continue to be strategic contributor to business success
Pressure to deliver value
• Stronger alignment with business strategy
• More innovation
• Continued cost pressure
• Proactive risk management
Focus areas for success
• More collaboration
• Translation of insights into business options
• Strong bias for action
• Robust talent management strategy
Successful Supply Chains will be a source of strategic contribution to business partners
9/13/2015 September 2015, p.26Supply Chain Insights Global Summit #ImagineSC
It is an on-going journey
9/13/2015 September 2015, p.27Supply Chain Insights Global Summit #ImagineSC
Integrated Global Supply Chain Vision 2020
BusinessPartnership People
Processes /Systems
9/13/2015 September 2015, p.28Supply Chain Insights Global Summit #ImagineSC
Learnings from past failures that can accelerate your success
• Business Priorities – roadmaps and initiatives must be driven by what the business needs to be successful
• Balance of Talent and Technology – implementing technology without the talent to optimize utilization will yield less than desired results
• Master Data – do not underestimate the value of accurate master data
• Unrealistic Timelines – process improvement is not easy; build aggressive but realistic timelines for major improvement projects
9/13/2015 September 2015, p.29Supply Chain Insights Global Summit #ImagineSC
External Recognition
Recognized Eastman as a having a “Supply Chain to Admire” 2014 & 2015 - annual top supply chain listing
Recognized Eastman with the Green Supply Chain Award
Recognized Eastman’s Supply Chain Roadmap as a top 100 Supply Chain project for 2014
Supply Chain research company recognized Eastman as a “Supply Chainovator”
Highlighted Eastman’s “end-to-end supply chain integration” and “continual improvements as helping Eastman be a leader on a global scale”
9/13/2015 September 2015, p.30Supply Chain Insights Global Summit #ImagineSC
Key “Takeaways” for successful supply chain transformation
• Focus on your customers
• Integrate procurement and supply chain operations
• Continually develop and improve capabilitiesPeople, Process, & Technology
• Align / collaborate with business partners
• Create value that contributes to business success