On February 2,exactly years from the day George Eastman introduced the Brownie camera, a group of Kodak researchers, inventors and business strategists met at the company's Rochester headquarters to speculate on what the next years might bring to their industry. All agreed that the true power of imaging has barely been tapped--and that the advances of this century will vindicate Eastman's dream of making communicating with pictures as easy as 'using a pencil.
For Eastman Kodak, positioning a demand-driven supply chain model to fit this redefined market required vision, an eye for detail, and precise timing. A picture can speak a thousand words and for Eastman Kodak Company, digital pictures say twice as much as traditional photographic film.
Bydigital photography had significantly reduced the use of traditional film—particularly with Western consumers—and with it, much of Kodak's business. InKodak launched a comprehensive business overhaul, focusing on moving the business from traditional print to digital.
At the same time, the company revamped its supply chain, moving from a traditional to a demand-driven logistics model. These actions are now beginning to click. For the first time in the company's history, more than half of its revenue last year came from digital products and services.
One key element of that transformation is Kodak's new supply chain strategy. As part of the company's plan to free up cash, Kodak decided to move to a demand-driven model, says Michael Cattalani, Kodak's manager of suppliers, logistics operations.
Commercializing the Supply Chain What exactly is a demand-driven supply chain? His definition encompasses not only real-time demand management, but also managing future supply and demand during planning cycles. In short, demand-driven best practices "commercialize the supply chain, making it generate and shape revenue," says Lapide.
Companies should think about what they sell, for example shaping demand to sales and linking that to their supply chain, "so when demand comes in, they are prepared for it," he says.
Companies can plan by the month or week—uniting the marketing, sales, customer service, and supply chain teams for a robust outlook. In the long term, companies should link customer service policies and customer segmentation to their supply chain needs, says Lapide.
Instead, many firms rely on their sales and marketing team to make demand decisions, which may not be the most profitable. Sometimes you want to promote products, and marketing is responsible for pushing them by shaping and creating demand.
The Right Formula For Kodak, winning business meant developing the right formula for a demand-driven supply chain. The company looked to Toyota as a model for best practices, starting the demand-driven approach with its manufacturing operations, then moving the process to logistics, says Cattalani.
The goal was to reduce inventory and costs while increasing cycle times. Kodak met these goals, and others, including more effective dock door management and a more reliable, routine logistics structure.
The first leg of Kodak's demand-driven journey was developing a cross-functional team supported by executive management. One advantage was that senior managers "were willing to stick their necks out to improve Kodak's processes," says Garbach.
Kodak produces materials in a nearly just-in-time fashion, so we were able to remove risk and fear from the supply chain, while also working with senior managers to develop contingency plans. The Consolidation Cure As part of its transition to a demand-driven supply chain, Kodak completely disassembled its less-than-truckload transportation with suppliers.
Before, each supplier shipped its own goods to Kodak plants. Under the new, demand-driven plan, Kodak consolidates supplier shipments by geography, making more frequent deliveries to the plants, and uses trucks containing material from multiple suppliers. In addition, it has standardized supply chain processes across the organization and across suppliers, allowing it to instantly spot abnormalities.
The company also implemented new crossdocking techniques. Instead of storing material not immediately needed on the floor, it is now crossdocked, and shipments to docks are scheduled. The crossdock is the middle step between suppliers and the factory. This one additional step counteracts substantial steps—including unnecessary storage and retrieval processes—on the other side," says Garbach.
Kodak has seen dramatic improvements from its supply chain overhaul. The company has reduced cycle times by 70 percent in some areas, and has "taken floors' worth of inventory out of the system," says Garbach.
With standard processes and communication, Kodak can now resolve problems before they occur. Today, it knows of materials shortages at least one day in advance. Under the old system, Kodak wasn't aware of problems until material arrived on the plant floor, explains Garbach.
Scheduled docking enables Kodak to "take on more work and spread it out," he says. Demand-driven logistics also helps Kodak significantly reduce safety stock and material damage rates.
Relationships among the different groups at Kodak have improved as well, notes Cattalani. Before, as long as material came in and was shipped out, we washed our hands of the process," says Garbach. Companies today are shrinking product lifecycles and increasing product mix as well as increasing their global footprint.
To meet these challenges, they need to take an explicit approach to managing their supply chain and make it more holistic, advises Hockman.at the top. Why is this the case? What went wrong at Eastman Kodak?
6 Reuters, retrieved 10th December , torosgazete.com ushered a radically new perspective on Kodak’s business the company failed to recognise the even help develop relevant scenarios of the future of imaging and photography.
Instead, the. Quick quiz: Name a leading company today that was just as dominant 25 years ago. [In Pictures: 10 Great Companies That Lost Their Edge.] There are a few, but many of the world's top companies in.
Last year the Vlerick Business School published a survey among executives from DSOs that represent the majority of all customers in Europe.
In the survey, 72% of the DSOs mentioned that they are planning to transform their business to a service . Beginning in , Kodak will have in place the business model and the management structure required for sustained success in digital markets.” Kodak management structure for digital future.
Mar 22, · Of the roughly buildings that once stood on the 1,acre campus of Eastman Kodak’s business park in Rochester, 80 have been demolished and 59 others sold off. If any future . Leader in Film Development Targets Film Students. George Eastman was an American inventor born in who turned his hobby of photography into world leadership in the film sales and processing business.