Executive Briefings

Eastman Chemical's New Direction in Procurement

Eastman Chemical wanted to shift its focus from commodity to specialty chemicals. But the change would necessitate a major transformation of the company's supply chain, and a whole new relationship with suppliers. Mike Berry, vice president of global procurement and chief procurement officer, tells how it was accomplished.

The venerable Eastman Chemical set out to refocus its business strategy to emphasize specialty chemicals. They are more predictable, less cyclical and more successful on the stock market than commodity products, says Berry. The company divested itself of under-performing businesses and went on the acquisition trail. “You have to have a different mindset,” he says.

The effort included a fresh look at Eastman Chemical’s supply base. It was searching for partners who were willing to collaborate on innovation while taking out costs. They would become part of the business team and even have a vote in decisions related to profit and loss, Berry says.

The company sent out a survey to business leaders, asking what they thought of its procurement organization. It wanted to gauge the quality of its efforts related to supplier selection and development, as well as contract negotiations.

Eastman Chemical is now in the process of retraining staff, attempting to identify innovative thinkers and stress salesmanship – the ability “to sell ideas to the business end of the company,” says Berry. While it values managers with a technical background, it needs individuals with the ability “to tell the story.”

The search for talent is focusing on individuals who possess “both left- and right-brain thinking,” he says. But finding capable managers with both qualities is no easy task.

The company aims to train its people to understand the market “better than consultants,” adds Berry.

To view the video in its entirety, click here

The venerable Eastman Chemical set out to refocus its business strategy to emphasize specialty chemicals. They are more predictable, less cyclical and more successful on the stock market than commodity products, says Berry. The company divested itself of under-performing businesses and went on the acquisition trail. “You have to have a different mindset,” he says.

The effort included a fresh look at Eastman Chemical’s supply base. It was searching for partners who were willing to collaborate on innovation while taking out costs. They would become part of the business team and even have a vote in decisions related to profit and loss, Berry says.

The company sent out a survey to business leaders, asking what they thought of its procurement organization. It wanted to gauge the quality of its efforts related to supplier selection and development, as well as contract negotiations.

Eastman Chemical is now in the process of retraining staff, attempting to identify innovative thinkers and stress salesmanship – the ability “to sell ideas to the business end of the company,” says Berry. While it values managers with a technical background, it needs individuals with the ability “to tell the story.”

The search for talent is focusing on individuals who possess “both left- and right-brain thinking,” he says. But finding capable managers with both qualities is no easy task.

The company aims to train its people to understand the market “better than consultants,” adds Berry.

To view the video in its entirety, click here