Eastman Chemical: Supply Chain Digitization

Digital business processes are steadily influencing the size, shape, and services of every company. Evidence of this digital mega-trend can be found in supply chains, which are moving away from e-business and toward the complex theme of services digitization. Briefly defined, services digitization refers to how companies are pulling paper-based transactions online and reshaping them into integrated, multi-channel supply chain processes.

Market leaders in the retail, healthcare, and chemical industries systematically and continually digitize complex supply chain processes. In this best-practice case study, we highlight Eastman Chemical, the ninth-largest U.S. chemical producer, and its story of supply chain evolution. In the next few pages, we will answer the following questions:

• How and why does a large organization go digital? In the lagging chemical industry, major chemical manufacturers are digitizing their supply chain processes in order to cut costs and differentiate themselves by servicing the customer faster and better. Eastman has been digitizing its supply chain to create the most competitive supply chain, which earns the business of the final consumer.
• What are the different phases in supply chain digitization? Eastman has emerged a definitive leader in the chemical industry in transforming its supply chain through the intelligent use of enterprise resource planning (ERP) technology, in particular SAP R/3, and laying a services infrastructure. This infrastructure is helping Eastman to create new service businesses aimed at non-traditional growth opportunities. Eastman has relied on a blueprint to guide it on its digitization journey.
• What does a cross-enterprise digitization blueprint look like? Eastman's digitization blueprint takes into account a crisp focal point, the supporting organizational structure, the scope of the processes being digitized, and the appropriate technology investments. The focal point is an especially important element of a blueprint since it clarifies the business imperative behind the digitization initiative.
• What is the new frontier in digitization? Digital, automated business processes are merely the foundation for the next phase: services-driven growth. What is the link between Eastman's digital supply chain and its increased revenues from new service businesses? In recent years, Eastman has routinely invested approximately 1.0%-1.5% of annual sales into new growth opportunities, one of which wisely capitalized on the company's own trials and errors in digitizing its supply chain and resulted in a new services business model that lets customers take advantage of its considerable supply chain expertise.

By relentlessly pursuing and adjusting its focal point, Eastman has successfully traversed the supply chain digitization trajectory. Read on to learn more…

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