Kodak's supply chain is characterized by high volumes, short product lifecycles and extreme seasonality, says Nitti. It's primarily based in Asia, with products destined for Western Europe, the U.S. and Canada. Eventually, he says, the setup evolved to the point where the company needed to establish an operational support group in Asia, to deal with the issue of long lead times for components feeding into the factories.
The company began exploring the possibility of "platforming" certain key components, and tooling them to speed up time to market. "Because of the variability in customer demand, we wanted to minimize end-of-life write-offs," Nitti says.
In 2004, Kodak acquired Chinon Industries, a maker of digital cameras. The two had maintained a relationship since after World War II. The target company had optical technology for lenses, in addition to good relationships with key component suppliers. The deal “allowed us to get up the maturity curve on how we were going manage our supply base in Asia,” Nitti says.
In the process, Kodak was able to reduce lead times while acquiring a better understanding of component suppliers’ business processes. Together they created “value-stream maps” that helped to improve manufacturing and allowed for the application of postponement techniques. “We began to understand at which points the components started to become customized to Kodak,” Nitti says.
Around the time of the Chinon acquisition, Kodak’s business began to grow extensively. At the peak, the company had three partners doing product design, development and contract manufacturer. Activity became so intense that the manufacturer began outpacing the capability of its supply base. “We were losing visibility, and having issues with supply continuity and quality,” says Nitti.
Kodak addressed the problem through a renewed effort at collaboration, both with suppliers and downstream customers. In the case of the latter, Nitti says, it achieved a better understanding of market dynamics, and was able to work more closely with retailers.
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