Eastman Kodak Co. Benchmark

Eastman Kodak Co. Benchmark

Kodak is the world’s foremost imaging innovator. George Eastman put the first simple camera into the hands of a world of consumers in 1888. In so doing, he made a cumbersome and complicated process easy to use and accessible to nearly everyone. Since that time, the Eastman Kodak Company has led the way with an abundance of new products and processes to make photography simpler, more useful and more enjoyable. With sales of $13.3 billion in 2006, the company is committed to a digitally oriented growth strategy focused on helping people better use meaningful images and information in their life and work. (Kodak, 2007)

Per the director of research and development for Eastman Kodak Mark Schneider, says that the plan is not just to cut direct costs. When the Outsourcing Institute asked companies to name the top three reasons for going extramural, costs showed up on 64% of the lists. But improve company focus, access to world-class capabilities, and free resources for other purposes were each mentioned more than 40% of the time (Forbes.com, 2007). Often, a different objective is to minimize the time and distance between a supplier's parts bin and a retailer's cash register, dropping the amount of manufactured goods inventoried along the supply chain. Whatever the reasons, unless a company has a plan in place and a marketplace that will soak up enough output so that it can function at optimum rates and costs, the burden of proof has shifted from why outsource? To why make it here?

Eastman Kodak has realized savings in the millions in transportation and inventory costs by implementing lean logistics. Kodak starting developing lean logistics in 2002 by establishing a cross docks to improve the flow of materials moving from its suppliers to its warehouses. Kodak picked three of its closes suppliers to try the lean logistics out. One main truck would go around to the suppliers and pick up supplies every two days and bring it back to the cross dock where it would be moved to the correct department. This one act has led to a $20 million inventory cost reduction because there is nothing being stored, and the shipping costs are low because they use their own trucks.

KLI could try a similar approach and have suppliers use the just-in-time (JIT) inventory system and keep levels high enough to sell out of products, but low enough to use residual space available.

Presently, there is only a contribution margin of $180 for the ECUs and $45 for the RFIDs per unit. These numbers would suggest that the possible thing to do would be to outsource completely or partially the ECU production and keep the RFID production in house. Kuiper Leda has the opportunity to maximize its current production resources and optimize profit margins by outsourcing some of the electronic control unit (ECU) production. (Simulation: Kuiper Leda, 2007)

Kmart

Kmart is a chain of department stores in the United States, Puerto Rico and Guam. The chain merged with Sears in 2005, creating the Sears Holdings Corporation.

Kmart make competitors to Wal-Mart and target. Kmart had similar issues like KLI. Kmart CEO, Chuck Conaway, had a two-year strategy that turned the company around. His strategy was designed on revamping the company’s supply chain and inventory management systems. Conaway believed that the supply chain is really the Achilles heel of Kmart. He