Eastman Announces E-business Results for 2000 Establishes E-business Goals for 2001
Eastman Chemical Company (NYSE:EMN), an e-commerce leader in the chemical industry, today announced significant results toward its e-business goals in 2000.
Electronic sales – annualized rate of 15 percent of total sales through all electronic channels such as eastman.com, eastmanmarketplace.com and online marketplaces Electronic procurement – annualized rate of 14 percent of total procurement for direct and indirect materials System-to-System connections – 15 system links established with key trading partners Digital business venture launches – Three new ventures launched Digital business venture value – $9 million
The company achieved its goals of 15 percent of electronic sales, 15 system-to-system connections, and three digital business ventures launched, while just missing the 15 percent target for electronic procurement.
Equity appreciation from Eastman’s e-business investments and launches did not reach the $25 million goal. “Our primary rationale for making digital business investments has been to enable Eastman to help transform the way the chemical industry does business and to help create industry standards,” said Roger Mowen, vice-president of Global Customer Solutions and CIO. “But,” Mowen added, “We’re also pleased to see these investments creating realized value—especially during the downturn in high technology markets last year.”
Eastman partnered with other companies to launch the three ventures aimed at creating new solutions and reducing inefficiencies in the chemical industry. Ventures include PaintandCoatings.com, a provider of marketing and commerce solutions for the paint and coatings industry; ShipChem, Inc., a virtual logistics provider for in-transit freight and services; and Asia BizNet to help manage chemical industry e-business solution investments in China and Asia.
“These achievements demonstrate Eastman’s dedication to make it easy for our customers to do business with us,” said Mowen. He credited the commitment of employees for the tremendous progress. “Eastman people have differentiated the company by creating a range of customer choices and solutions via electronic channels. Our strategy this year is to continue to focus on driving inefficiencies out of the industry.”
Mowen announced Eastman's e-business goals for 2001 as:
Electronic sales – annualized rate of 30-40 percent of total sales Electronic procurement – annualized rate of 30-40 percent of total procurement System-to-System connections – 20-30 new connections and one collaborative planning, forecasting and replenishing (CPFR) pilot that links a customer, Eastman and a supplier Digital business venture launches – 2 to 3 new launches Digital business venture value – Internal rate of return in upper 25 percent of venture fund performance
Eastman expects to continue creating, partnering with and investing in companies that support a customer-focused strategy, thus expanding the capability to bring web-enabled solutions to the industry.
Recent implementation of all SAP R/3 ERP modules, supply chain optimization software and other manufacturing systems enables more rapid progress toward digitizing processes. The company expects to expand these technologies worldwide in 2001. Mowen said, “These systems, supported by Eastman’s world-class, standardized computing and telecommunications infrastructure, provide best-in-class processes that fully support our aggressive e-business efforts.”
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