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Eastman is a global specialty chemical company that produces a broad range of products found in items people use every day.
In 2012, Eastman Chemical Company participated in State of Flux’s supplier relationship management (SRM) research. When we analysed their responses, it was evident that they had a relatively mature and well developed approach and were clearly amongst the leaders identified by our survey. An area of particular strength was stakeholder engagement and support. This prompted us to talk to Eastman in more detail whereupon we discovered that the survey responses had been submitted on behalf of IT where SRM was well established. Our conversations with Mike Gonce (Global IT Procurement and Contracts Manager) and Mike Stallard (Senior Procurement Manager) also revealed their plans to expand the adoption of SRM across the wider enterprise, starting initially with indirect procurement. We felt this challenge might resonate with other organisations that are wrestling with a similar challenge. We were delighted when the two Mikes agreed to share their experiences.
With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. With headquarters in King- sport Tennessee, Eastman Chemical Company was spun off fromEastman Kodak in 1994 and has become a highly successful publicly traded company. In 2012, sales revenue was $9.1 billion. The company has 43 manufacturing locations plus a number of sales offices around the globe, employing around 13,500 people, serving customers in ~100 countries. East- man’s products are sold to numerous end markets including transportation; building and construction; consumables; tobacco; industrials and chemicals processing; durables; and health and wellness.
CHALLENGE Eastman’s SRM programme can be traced back to 2004 when, following a challenge by the IT leadership, a more formal and structured approach to SRM in the IT function was initiated. The programme emerged from a realisation that in most cases suppliers were taking ownership, driving relationships and following their own agenda, often engaging directly with C-level executives outside of the IT leadership. At that time IT was not com- fortable working with suppliers to solve technical challenges and would only collaborate with ‘key’ suppliers when facing major issues. It was also clear that the teams respon- sible for managing suppliers didn’t always understand the contracts and that manage- ment was largely reactive. Relationships were also deemed far too dependent on individuals. Mike Gonce explained: “It was imperative that we addressed the risks that this situation created. We needed to better align the IT procurement teamwith the IT organisation as a whole and turn results into value.”
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