| Summary: | Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Chemical Engineering; in conjunction with the Leaders for Manufacturing Program at MIT, 2004. === Includes bibliographical references (p. 61-62). === The Eastman Kodak Company's Annesley, United Kingdom facility assembles consumer and professional film for distribution to the European, Middle Eastern, African, and Russian (EAMER) region. Under pressure from digital photography, Kodak is managing the traditional film business for cash to fuel strategic initiatives throughout Kodak. Thus, cost reduction is a focus of the Annesley facility. This thesis describes a cost reduction initiative in the Annesley facility's component supply chain to eliminate a storage and staging warehouse. The specific tools used to complete this effort include the use of Strategic Inventory Placement (SIP) modeling1, implementation of kanbans, and application of excess inventory calculations. The intent of applying the SIP model was to find unnecessary inventories. Instead, the model revealed key supply chain challenges and constraints for the project to overcome. Kanbans were implemented across the Annesley and vendor sites. The design of these kanbans provides incentives to drive further lean improvements at Annesley and the vendors. Kanban sizes were calculated by a maximum per lead time methodology. This methodology provides a better estimate of demand variability than the reorder point, order up to methodology previously employed. Finally, the optimal stock level was calculated for components with excess inventories. The results of these calculations were combined with knowledge of future demand to reduce inventory to optimal levels. Through completion of this work the component storage and staging warehouse was closed. The kanban systems improved customer service while lowering inventories through improvement in inventory record accuracy. Using the optimal inventory calculation, excess and obsolete === (cont.) inventories were eliminated. These actions allowed sufficient inventory to maintain Annesley's production to be located at the Annesley site. === by Eric G. Cheslek. === S.M. === M.B.A.
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