2. EASTMAN Presented by Involve Me, and I will Understand Presented by Phillip Tencer Eastman Chemical Company

3. EASTMAN Eastman Chemical Company n Founded in 1920 as a unit of Eastman Kodak Company n Spun off as an independent, publicly-held company in 1994 n Manufacture over 400 products –Chemicals –Fibers –Plastics n Over 16,000 employees in more than 30 countries n Manufacturing facilities in 11 countries

4. EASTMAN Terms and Acronyms n n MIS - Manufacturing Information System n n DCS - Distributed Control System n n MESA - Manufacturing Enterprise Systems Alignment n n PIMS - Process Information Management System n n ERP - Enterprise Resource Planning n n LIMS - Laboratory Information Management System n n SPC - Statistical Process Control n n BPI - Business Process Improvement

5. EASTMAN Process Monitoring & Control Inventory Management Process Control Systems Process Data Historian Lab Instruments Validation, Control, Security, Reporting, & Service Functions Lab Management (LIMS) Run Management GloBIIS Interface Production Planning Storage/Distribution Analysis Qualification Improvement Manufacture Production Records Scheduling 10 different systems 7 development tools 3 database technologies Similar in function Diverse in details Heavy on support Hard to leverage Data incoherence Lack analysis tools Aging technology Why Consider a New System?

6. EASTMAN Opportunities Manufacturing will be able to use IT to improve their competitive position and return to shareholders. However 75% of manufacturers will fail to take advantage of these improvements by 2002 because their application deployment strategies have not evolved beyond automating basic business processes Gartner Group Strategic Analysis Report 13 Feb 97

7. EASTMAN Degree of Success according to Dr. Michael Hammer SAP Implementation according to Dr. Michael Hammer 8 Dr. Hammer Surveyed a large number of companies who had implemented SAP R/3 Question: Rate the success of your implementation on a scale of 1 to 10 where 1 is a huge disaster and 10 is a huge success. n They “Got it” 3 n Business process focus (facilitated by technology) n Technology focused n Large gains n Minimal gains n “Didn’t get it”

8. EASTMAN Project Scope n Implement an enterprise-wide integrated manufacturing information system n Standardize on “best practices” and drive system requirements through business process improvement efforts n Deploy in 23 manufacturing sites worldwide ArgentinaThe Netherlands CanadaSingapore EnglandSpain Hong KongUnited States MalaysiaWales Mexico

9. EASTMAN SAP R/2 MIS DCS “As-Is” SAP R/3 DCS ERP PDH DWH LIMS “To-Be” MESA SAP R/3 Impact on Programs

10. EASTMAN Common User View R/3 Planning Schedule Initiate Prod. Records Inv. Mgmt. Ship DWH Process/ Product Knowledge Mgmt. Summary Bus. Intel. Dec. Supp. PIMS Process Control Process Conditions Lab Inst. LIMS Architecture

11. EASTMAN Software Evaluations n Enterprise Resource Planning –SAP R/3 n Laboratory Information Management System –Hewlett-Packard - ChemLMS –LabSystems - SampleManager –Perkin Elmer - SQL*LIMS n Process Information Management System –AspenTech - InfoPlus.21 –Honeywell - Uniformance –OSI Software - PI –Simulation Sciences - AIM n Business Intelligence/Data Analysis –Business Objects - Business Objects –COGNOS - Inpromptu, PowerPlay –Seagate Software - Crystal Reports

12. EASTMAN PIMS Software Selection n Selection team formed with manufacturing representatives n Solicit requirements from representatives and issued a Request for Proposal n Developed evaluation feedback form n Conduct vendor workshops n Score evaluations (reduced field to 2) n Representatives contact references n Formal negotiations with top two finalists n Publish results of evaluations, contacts, and results

13. EASTMAN MESA/PIMS Functional Evaluation Categories n n Interfaces and Tag Definition n n Data Displays and Trending n n SPC and Alarming n n Batch Displays and Trending Production Reporting and SAP Interfaces

14. EASTMAN Business Process Improvement The fundamental rethinking and redesign of how we work day to day … with the goal of bringing about dramatic improvements in performance

15. EASTMAN New Technology = Unique Opportunity n Providing new capability n Removing barriers n Creating a “change event” n Ability to leverage corporate knowledge

16. EASTMAN Business Process Improvement Process Teams Plan & Schedule Production Prepare for Production Produce Product Product Qualification Product Disposition Analytical Testing Cross Process Teams Quality Systems (Quality General, Registration ISO cGMP, Kosher, etc) Inventory Management (Materials, Product, Supplies, WIP, etc) New Product/Materials Issues Material Identification (PM/GMN/Sales Codes, Labeling, Bar Coding) Equipment Reliability / Maintenance Issues HSES Issues People Issues (Labor Mgt., Training, Certification, etc.) Utilities & Services Issues Transportation & Logistics Issues Accounting & Production Records Management & Reporting Process Improvement

17. EASTMAN Design Process Identify and prioritize functionality Develop Understanding Current processes & issues Technology enablers Standardization Opportunities Define improved processes Reconcile with Macro Validate Applicability Resolve Issues Validate Software Solution Team Kickoff and Pre- Work

18. EASTMAN Taking Concept to Reality BPI / Design Workshops Core Design Complete Complete Complete Development from Prototypes Test & Validate Systems Deploy Do It Needs Prototype Solutions Adjust & Add Detail Functional DecompositionPrototype

19. EASTMAN MESA BPI Issues n Knowledgeable Resources n Standardization & Consensus n Bias for Change n Rapid Development n Needs Focused n Change Management - Documentation & Training

20. EASTMAN I. Planning Establish team scope, membership, leadership, and schedule Status of MESA BPI/Design Technical teams identify and prototype functionality for identified needs. Prototypes, gaps, and suggestions are reviewed with teams with adjustment as needed. III. Prototype & Adjust Hold Workshops to define business processes, needs, issues, standards, and best practices II. Active Design Team output and functionality recommendations are reviewed and approved by MESA Macro Team. IV. Approve & Complete

21. EASTMAN Prototypes n Business processes (not technology) n Demonstration of capability n Review of usability n Defines requirements (development or configuration) n Training Development

22. EASTMAN Deployment Teams n Team Leader (Manufacturing) n Stream Oriented n Technology Team Members n Site/Division Team Members

23. EASTMAN Deployment Steps n Needs Analysis n Installation (Hardware/Software) n Training (Site Support) n Configuration n Testing n Training (Client) n Implementation n Post-Implementation Support

24. EASTMAN Status n Architecture - Complete n Design - Complete n Staffing (Deployment) - Complete n Latin America (Oct, 1999) n Europe (April, 2000) n Asia (July, 2000) n North America (Jan, 2001)

25. EASTMAN “Tell me, and I will forget. Show me, and I may remember. Involve me, and I will understand.” - Chinese Proverb