Kodak sees bigger picture in digital business model
By Staff -- Manufacturing Business Technology, 8/1/2006 6:00:00 AM
First announced in 2004 as part of its migration from a 120-year history in film to its involvement in the digital revolution in photography, Kodak is aligning its manufacturing facilities with specific business units. It's also streamlining centralized administrative business functions to increase authority and accountability for production, and to reduce costs.
"Aligning manufacturing with the business units is part of being able to make decisions faster, and putting authority where it's needed to be successful," says Chris Veronda, spokesperson for Kodak communications.
The transformation includes greater emphasis on new markets—most significantly, graphical communication spanning prepress processes to services and software for printing plates.
"We've concentrated on building the model to support the business, and then putting the corporate structure in place to support the model," Veronda adds. This effort involves consolidating much of the manufacturing process and shrinking the global production asset base. It also involves reducing the production footprint at Kodak Park, its major facility in Rochester, N.Y.
Veronda says the move brings to a close the era of expansive capacity designed to reap economies of scale. "We're putting all the resources with the business units they support, rather than having manufacturing as a shared resource," he says.
The implementation of lean manufacturing disciplines is central to transforming manufacturing. "The goal is to take layers of management out of the loop and streamline all processes as much as possible," Veronda explains. As part of the transformation, Kodak will rely more on suppliers, and have smaller, more flexible production units of its own that can respond to changing market dynamics.
"We project the transformation will be complete in 2007," Veronda concludes. From its launch in 2004, "we will have reduced our manufacturing base from $3 billion to $1 billion, and lowered employment by 25,000 workers."
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