 Ashley Fuqua Operations Management 6650 Eastman Chemical Company A Leader in Innovation and Sustainability

Company Overview  Founded in 1920 by George Eastman as Eastman Kodak  In 1994 Eastman Chemical Company spun off from Eastman Kodak and became an independent corporation  2012 Sales Revenue of $9.1 billion; Publicly Traded  Manufactures and markets over 400 chemicals, fibers and plastics for 7,000 customers around the world  Products show up in a wide variety of consumer goods such as beverage bottles, chewing gum, coatings for flooring materials, window cleaners, aspirin  Ranks as the 10th largest chemical company in sales in the United States and 34th in the world  13,500 Employees  Operates manufacturing plants at its headquarters in Kingsport, Tennessee and at 43 other sites worldwide

What is Eastman  Eastman is a global specialty chemicals company that produces a broad range of products found in items people use every day.  With a portfolio of specialty businesses, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability.  Its market-driven approaches take advantage of world-class technology platforms and leading positions in attractive end- markets such as transportation, building and construction, and consumables.

Business Segments and End Markets Major End Markets:  Transportation  Building and Construction  Consumables  Tobacco  Industrials and Chemicals Processing  Durables  Health and Wellness Business Segments :  Additives and Functional Products  Adhesives and Plasticizers  Advanced Materials  Fibers  Specialty Fluids and Intermediates

Vision: To Be the World's Preferred Chemical Company  Quality management principles and techniques are woven throughout the company's business activities  A strong focus on customers: Expectation to exceed customers' expectations  Quality goal, "to be the leader in quality and value of products and services.  Recognizes to be successful it must rely on the skills and dedication of Eastman people

Commitment to Excellence  For the past four years, over 70 percent of its worldwide customers have ranked Eastman as their number one supplier.  On five factors customers believe are most important~product quality, product uniformity, supplier integrity, correct delivery and reliability~Eastman has been rated outstanding for the past seven years.  Shipping reliability consistently has been near 100 percent for the last four years.  The company's no-fault return policy on its plastic products is a direct result of Eastman's extensive customer surveys. Believed to be the only one of its kind in the chemical industry, the policy states a customer may return any product for any reason for a full refund.

Operational Model  Quality Management Process is comprised of four major steps:  Focus on customers;  Establish mission, vision and indicators of performance;  Understand, standardize, stabilize and maintain processes; and  Plan, do, check, act for continual improvement and innovation.  A network of "interlocking" teams  As a result, the time to bring a new product to market has been reduced by 50 percent since 1990.

Operational Dilemma  Need to continue manufacturing but a demand for sustainability  Development and adoption of the Chemical Manufacturers Association's "Responsible Care”  Creation of citizens' advisory panels and 24-hour hotline to discuss and voice community concerns

Steps to Sustainability  Development of a comprehensive air pollution control program  Upgrading process technology  Installing air pollution control equipment  Implementing improved work practices  Since 1988, one manufacturing site has reduced Toxic Release Inventory (TRI) air emissions by 86%

Compatible in the PET recycle stream (RIC 1) Free of BPA, halogens, and antimony Lower processing and drying temperatures because pellets are not crystalline or solid-stated Enable bottle converters to reduce scrap rates and lower energy usage Eliminate extrusion defects such as gels or unmelts Minimize polymer degradation Pellets are amorphous and therefore compatible with the regrind in a dryer setup Eliminate melt fracture at high extrusion rates Sustainable Packaging

Operational Decision: Save Money, Reduce Energy Intensity  In 2010 Eastman Chemical established a series of challenging environmental goals, one of which includes reducing its energy intensity by 25% over a 10-year period, with 2008 as the baseline.  Reorganize and Revitalize the energy-management program  Introduce more structure  Define site specific expectations  Change of Reporting Structure

Sustainability and Cost Savings  Energy savings in 2011:  $11.6 million  357 million pounds of greenhouse gas emissions  $7.5 million in savings from a corporate steam leak repair initiative.  Formation of an energy- assessment process that identified more than $650,000 in savings.

Measuring Success  Malcolm Baldrige National Quality Award 1993 Winner Eastman Chemical Company  Corporate Responsibility Officer Magazine (CRO) named Eastman one of the five best corporate citizens among chemical companies in the U.S. in 2008  Ranked 64th in CRO magazine's list of 100 Best Corporate Citizens for 2008  2011 American Chemistry Council (ACC) Energy Efficiency Award  Named 2012 ENERGY STAR® Partner of the Year  Eastman Honored as Gold Level Stevie® Award Winner in the 2013 American Business Awards  Since 1982, Eastman has received 97 awards from its customers

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