Eastman Chemical has grown into a global leader in chemicals, plastics, fibers and other advanced materials. Headquartered in Kingsport, Tenn., and founded in 1920, it is a $9.4 billion business with approximately 14,000 global employees. The company operates 45 manufacturing sites in North America, Latin America, Europe and Asia. From there, the company serves customers in approximately 100 countries. Its materials are found in thousands of household and commercial products used around the world on a daily basis.
“We run an integrated supply chain responsible for procurement, supply and demand planning, scheduling, inventory management, customer service and logistics,” Vice President of Global Supply Chain James Harlan II says.
Eastman has five core business segments: additives and functional products, adhesives and plasticizers, advanced materials, fibers, and specialty fluids and intermediates. The company serves a diverse array of end-markets.
The company’s global supply chain is sophisticated and integrated. It extends from managing the flow of information and materials from the suppliers of raw materials all the way to the delivery of finished goods to customers. More than 1,200 people are involved in the company’s supply chain, which works in 17 countries around the world. Eastman spends $7 billion on materials, energy and services, and the integrated global supply chain team supports demand/supply planning for 45 manufacturing sites. It also services customers in 100 countries with more than 400,000 shipments of finished goods, and it manages $1.6 billion of inventories.
“We think about the integrated supply chain from end to end,” Harlan says. “We have created a full-service platform and are on SAP around the world.”
To enhance supply chain operations, the company put together a team of experts responsible for identification of alternate methods of supply. The team looks at the lifecycle of suppliers’ transportation around the world to eliminate unnecessary shipments by truck, rail and ocean liners. In addition, the team manages Eastman’s sale of byproducts and wide specification material to converters, who then recover and convert material into useful products that would otherwise have become waste. This allows Eastman to be efficient, economical and eco-aware.
The company also uses intermodal transportation to reduce cost and fuel consumption while providing superior results for customers and suppliers. Eastman’s supply chain team has analyzed direct order flows from the U.S. to European customers, too. It identified opportunities to change arrival ports, reducing freight cost and mileage logged in container transportation.
“We utilize every mode of transport, and we pride ourselves on safety,” Harlan says. “We take transportation safety very seriously, leveraging 500 partners for shipments and warehousing.”
It also works to ship molten products rather than solid products. This reduces CO2 emissions and helps customers and suppliers conserve costs and reduce environmental footprints.
Collaboration is Key
Eastman exchanges products globally with other producers to eliminate or reduce product shipments via truck, rail or water. In addition, Eastman works to develop agreements with third-party converters to supply initial quantities of new products to test market demand.
Eastman often works with companies that are simultaneously suppliers, customers and competitors. It sees this unique situation as an advantage, seeking sustainable and reliable partnerships.
“We want to create a partnership that is a win-win for both parties,” he says. “Collaboration across the supply chain is critical.”
Aiming for continued growth, Eastman has seen record performance for four straight years. It is aiming for 2014 to be year No. 5. The company has been reinvesting organically into its business and products, while also making acquisitions that have allowed it to enhance its presence in multiple markets and geographies.
Eastman’s pursuit of real improvement across the supply chain has been realized thanks to an integrated approach and advanced tools. In the years to come, the company must focus on talent management and continuing to raise the bar for its supply chain.
“Our people must be able to use the tools that we have so we can extract more ROI,” Harlan says. “Our thoughts and actions must be aligned so we can devise more strategic solutions and use analytics and forecasting to help us continue to be an innovator.”