The Agile Supply Chain: Boost performance

with end-to-end visibility and collaboration

Imran Khan
CIO Consumer Digital Group (CDG) and Graphics Communications
Group (GCG)
Eastman Kodak Company
Nov 14 2008
2
Table Of Contents
Supply Chain Overview & Challenges
Kodak Overview
Strategy & Approach Leveraging Information Visibility & Collaboration
Key Initiatives & Outcomes
Learnings / Key takeaways
3
About Kodak
Kodak is the worlds foremost imaging innovator. With sales of $10.3 billion in 2007, the company is committed to a growth
strategy focused on helping people better use meaningful images and information in their life and work. Consumers use Kodaks
system of digital and traditional products and services to take, print and share their pictures anytime, anywhere; Businesses
effectively communicate with customers worldwide using KODAK solutions for prepress, conventional and digital printing and
document imaging; and Creative Professionals rely on KODAK technology to uniquely tell their story through moving or still
images.
FPEG
Film,
Photofinishing &
Entertainment
Group
Entertainment Imaging
Film Capture
Traditional
Photofinishing
Other Film Products
CDG
Consumer
Digital Imaging
Group
GCG
Graphic
Communications
Group
Emerging
Prepress Solutions
Inkjet Printing
Solutions
Electrophotographic
Solutions
Enterprise
Solutions
Document Imaging
Solutions
Inkjet Systems
Digital Capture and
Devices
Image Sensor
Solutions
Retail Printing
Solutions
Consumer Imaging
Services
(KODAK Gallery)
Display
Digital
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Table Of Contents
Supply Chain Overview & Challenges

Kodak Overview

Strategy & Approach Leveraging Information Visibility & Collaboration

Key Initiatives & Outcomes
Learnings / Key takeaways
5
Kodaks Digital Supply Chain is global and multi-tier
Movement
of Goods
Complex product structure Short product life cycle
Multi-tier and multi-partner network Demand constrained by supply
Customer Customer Customer Customer
Assembly
Warehouse
Supplier 1
Supplier 2
Parts Supplier 1 Parts Supplier 2 Parts Supplier 3
Retail
Customers
Kodak Network
Kodak
Suppliers
Suppliers
Suppliers
Assembly
Warehouse
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And Like its peers, Kodak has supply chain imperatives due to
shrinking product life cycle.
Global
Sourcing
Micro
Segmentation
Economies of
scope
The 5
th
P
Volume
The pattern of product characteristics is changing across industries
Forecast error
10% 40% to
100%
Product variety 10-12 >100
Contribution
margin
5-20% 20-60%
Product life
cycle
> 2 yr
3 m to
1 yr
Lead time* 6 m to 1 yr
1 d to
2 w
Mature innovative
Stock out rate
1% to 2%
10% to
40%
Symptom
Root
cause
Impact
Hi-Tech & CPG
Chemicals & Pharma
predictable unpredictable
Product
Demand
*Lead time is for made to order
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Kodak is shifting the focus to make supply chain more agile and
responsive.
Efficient supply
chain
P
r
e
d
i
c
t
a
b
i
l
i
t
y

o
v
e
r

t
i
m
e
Predictability in regions
Low
High
High
High
Responsive
supply chain
Efficient supply
chain
Responsive supply
chain
Value drivers Transportation
Inventory
Warehousing
Stock outs,
Markdowns,
Obsolescence
Forecasting Analytics
Baseline
Heuristics
Transportation Full Truck Load Less Than Truck Load
Inventory Minimize throughput Buffer close to
customer
Sourcing drivers Quality
Cost
Quality
Speed
Flexibility
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Kodak is striking the right balance.
Costs Reduction Mantras
Apply responsive strategies
Model Supply Chain constraints like
Leadtime, Lot Size, Make vs Buy, Time-
Phasing, Multi and Inter-modal
Transportation Strategies into your Supply
Chain tool
Develop lite-reporting capabilities into your
planning product
Use Exception-Management Techniques
Automate of standard business decisions
Move from Channel Forecasting to POS
Customer Account Forecasting
Responsive Mantras
Postponement & Pull strategies
Componentization
Platforming
Contract Manufacturing
Strategic Sourcing
Horizontal Integration
Forecast Improvement
Lean Flexible Manufacturing
Multimodal/Inter-modal Planning
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Key factors reflecting the constant flux in the digital products market
place.
Factors:
Style of products such as color of cameras
Shorter product lifecycle combined with long component lead
time
Regional differences for a global company
Approaches:
Greater dependence on Suppliers for planning functions
Listening to Point of Sale Data
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Discriminating Customers
Rising Logistics Costs
Disruptive new Technologies
Integration with CRM systems
Incorporation of Pricing and
Inventory as decision factors
in S&OP process
Managing a vast and ever
increasing Product Portfolio
Leveraging visibility of
Information
Rapid response due to
risks of
mismanagement
and nonattendance
(Fulfillment related)
Revenue attainment
objectives
Removal of Global trade barriers
Information Availability and Global
Access
Centralization of Supply Chain functions
Procurements and Order Fulfillment
coming into the planning functions
Asset and resource utilization becoming
the key for profitability
Configuration requirements
Changing and increasing appetite for
changes in product design leading
to shorter Life cycles
Extremely Spiky nature of demand
driven by calendar events
Leading to host of Supply Chain Challenges for Kodak..
Need for
Innovation
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Table Of Contents
Supply Chain Overview & Challenges

Kodak Overview
Strategy & Approach Leveraging Information Visibility & Collaboration

Key Initiatives & Outcomes

Learnings / Key takeaways
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Leveraging Information Visibility & Collaboration is key to Kodaks
supply chain strategy.
Extended Chain
Collaboration in Design, Logistics,
Supplier and Customer Consignment,
Transparency in data exchange
Strategic Change
Contract Manufacturing, Strategic
Sourcing, Marketplaces/Exchanges
Supply Chain Maturity
C
o
m
p
l
e
x
i
t
y
Internal Change
External Change
Strategic Change
Process Improvements
Agile Manufacturing, Customer Direct Delivery, Channel
Collaboration, Trans-Shipment
Kodak is making its supply chain efficiently responsive to counter the business challenges in the market place. Changes are
being made at multiple levels internal, external and strategic to proactively respond to these changing market conditions.
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Kodak is leveraging Integrated Planning Tools to enable visibility &
collaboration, Kodak envisioned to drive.
Focus on reducing bull-whip
Improve collaboration on demand
plan
Single version of truth across all
levels
Focus on improving sell through
and profitability.
Drive supply plans based on
signals from the point of actual
demand
Oracle Demantra + SAP APO
Key Account Demand
Planning & Collaboration
1
Automated Digital Product
Available to Promise
2
Improved Supply Chain
Planning Effectiveness
3
Retail
Forecast
Account Rep
Forecast
Dmd Mgr
Forecast
Supply Plan
Final Key
Account Plan
Managing orders to allocations
was manual (100% order touch) for
some product lines
Implementation of SAP APO GATP
solution to automate allocation
execution based on rules
Current State: Almost 90% of
digital products flow through the
automated solution.
Orders touched on exception
basis.
Oracle Demantra
SAP R/3, BW
Integrated demand and supply
planning tool set
Focus on demand driven supply
planning and ability to respond to
changes through system based
alerts and exception management
Enabling partner collaboration
through demand and supply plan
integration.
Lowering D&S planning IT cost by
deploying the new toolset to all lines
of business.
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Service Performance Scorecard
Defect trending and analysis
Tracking impact of corrective
action
Computing cost of warranty /
poor quality.
Ability to drive focused
promotions and guidance to
future product versions
Microsoft BI stack
Service Intelligence Inkjet,
EPS & Consumables
4
Kodak is also using scorecarding and analytical tools to manage their
service performance
Service profitability
Consumables revenue
Consumable cost
Margin & print volume
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Table Of Contents
Supply Chain Overview & Challenges

Kodak Overview

Strategy & Approach Leveraging Information Visibility & Collaboration

Key Initiatives & Outcomes

Learnings / Key takeaways

16
Key Initiatives & Timelines
Digital Products
Global Available to Promise (GATP) - Allocation and ATP
Key Account Demand Planning Pilot in US
Key Account Demand Planning in Americas (US, CA, Latin America)
Supply Planning/Deployment (Kodak and 3rd Party Planned)
Full Demand and Supply Planning Integration
Demand Planning in Europe
Full GATP Integration with Demand and Supply Planning
Traditional Products
Demand and Supply Planning/Deployment
2006 2007 2008 2009
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Business Value of Being Efficiently Responsive
Striking the right balance between efficiency and responsiveness is crucial for long term
sustainability
Some of the metrics expected to be positively impacted are:
- Fill Rates
- Planning Cycle Times
- Stock holding costs
- Inventory throughput
- Reaction Times to Supply Chain Events
- Higher Planner Productivity with Exception management
- Inventory Levels and turnovers
- Sales at acceptable margins
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Table Of Contents
Supply Chain Overview & Challenges

Kodak Overview

Strategy & Approach Leveraging Information Visibility & Collaboration

Key Initiatives & Outcomes

Learnings / Key takeaways

19
Key Takeaways
There is a need for Supply Chains to be Efficiently Responsive.
Striking the right balance between costs and fill rates is crucial for long term sustainability.
Companies must select the right projects across supply chain portfolio in meeting
objectives for greater impact.
Standard Supply Chain solutions can be implemented strategically to meet niche supply
chain needs.
IT Portfolio strategy should take into account elements of ease of integration and total cost
of ownership.
Supply Chain strategies need to be all pervasive taking all echelons and constraints into
consideration.
Choose the right SI partner, with technological competence to be able to understand the
complexity of your business and support your supply chain transformation.
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Thank You