Eastman Supplier Excelence Program

Eastman Supplier
Excellence Program
January 2011
ESEP - agenda
 Background
 Purpose Statement
 Program Objectives
 Program Categories
• Sustainability Category
 Benefits
 Measurement
 Nomination Process
 Recognition
 Q&A
What I am reading….
 Malcolm Gladwell
• The Tipping Point
• Blink
• Outliers
• What the Dog Saw: And Other Adventures
Chip and Dan Heath
• Made to Stick
Question about measuring
supplier performance:
Why bother?
Supplier measurement
‘The Hospital’
ESEP background
 The program originated in the 1980’s and early 1990’s quality
program movement in the US
Early quality programs were centered on manufacturing, then moved
into the company’s administrative areas
The quality programs gained momentum and achieved good results
(manufacturing, inventory control, etc.)
SPC, ISO, JIT and lean manufacturing processes began to expand
naturally into purchased raw materials
 ESEP was originally a ‘downsized’ product from Kodak’s Q1
Program that was used to address the myriad of supplier quality
initiatives in the company
Interaction and supplier measurement and improvement were also
an essential part of the Malcolm Baldrige National Quality Award
ESEP purpose statement
The Eastman Supplier Excellence Program
provides a continuous improvement process
by which the highest quality and best value
materials, equipment, and services are supplied
to Eastman Chemical Company.
ESEP program objectives
Improve quality and costs
Achieve process and product control
Develop and recognize suppliers
ESEP program objectives
ESEP benefits
Better understanding of Eastman requirements
Improved ratings on quality audits
Improved design/specifications/standards
Increased customer satisfaction
Ongoing business relationships
Increased manufacturing efficiency
Reduced inspection and testing
Coordinated inventory management
Better communications
Documentation of performance
Opportunities to explore new technologies
ESEP improvement categories
 Four supplier recognition categories
• Excellence
• Innovation
• Improvement
• Sustainability (added in 2009-2010)
• Eligibility (key supplier, significant dollar expenditure, etc.)
• Performance interval (time frame performance is evaluated)
• Criteria
On-time delivery, on-spec delivery, value-adding improvement results, etc.
Availability (How often should a supplier be recognized?)
ESEP improvement category - sustainability
 Sustainability areas of impact are the following:
The first recipient of this award, Temple-Inland was chosen because of its design
innovations to reduce the weight of the corrugated packaging products produced for
Eastman’s Acetate Yarn Division, such that we will annually ship 250,000 pounds less
packaging materials without adverse effect. Temple-Inland is known for its innovations
in sustainability across many operations, including raw material sourcing (over 70% of
production is certified under the Sustainable Forestry Initiative), recycling (use of recycled
wood fiber in their containerboard operations), and energy management from using wood
waste to generate 80% of the energy needed at three of its mills.
“We are honored that Eastman has selected Temple-Inland as the recipient of their first
sustainability award. This award reaffirms our commitment to be the best by consistently
exceeding customer expectations. We look forward to continuing our relationship with
Eastman and helping them reach their future sustainability goals.”
Steve Sliva General manager of Temple-Inland’s Elizabethton, Tennessee box plant
ESEP measurement
 Objective
• On-time performance
• Business terms
• Non-conformance
 Subjective
• Long term
Market knowledge
This is usually what we run into when we want to measure our suppliers
Example: quarterly supplier measurement
ESEP nomination process
 Award nominations are
requested in February of each
year for the previous year
The nominations are reviewed
and approved by a
management committee
Award recognition and plaques
are then given to the suppliers
as soon as practical
ESEP nomination considerations
 Eastman is not in business just to give out awards; however, proper
recognition does provide long term value from the supplier
The award criteria is meant to be a guide; we recognize those
suppliers who meet the criteria as well as the intent of the guidelines
A supplier does not have to be part of an ESEP team to receive
recognition; a “key" supplier can be a function of expenditure level
or criticality to the Eastman process
If a key supplier meets both the delivery and specification
requirements, then develop a list of improvements that can be
credited to the supplier such as new contract terms, savings brought
by the supplier, improvement projects (tangible or intangible), etc.
Additional discussion points
 Supplier scoring
• How do you use it?
• What is the difference between a ‘90’ and a ‘70’?
Does it matter?
 Suppliers want feedback; In your opinion, how are they
We tend to gravitate toward complexity and make the
measurement so difficult that it grinds to a halt
Shouldn’t measure suppliers one year and not the next;
this is a continuous improvement process
Again, we ask the question
about measuring supplier
Why bother?
On a personal level, are you concerned about quality?
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