4-page Case Study Posted: 4/28/2011

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Eastman Chemical CompanyChemical Company Avoids $4.3 Million in

Capital Costs with Better Asset Management
Eastman Chemical Company is a global chemical company with manufacturing plants around the world. In those plants are tens of thousands of pieces of capital equipment, from pumps to power generators, all of which need to be carefully managed to maximize uptime and performance and minimize maintenance costs. Eastman recently replaced an older capital asset management software program with a custom system built in just four months using Microsoft SharePoint Server 2010. By authoring the new system itself, Eastman avoided spending U.S.$350,000 on a commercial program. Plus, Eastman calculates that it is avoiding $4.3 million in annual capital expenses through better asset management. Further, it will speed up capital project cycles significantly and reduce server costs by 60 percent.

Situation

Eastman Chemical Company makes chemicals, fibers, and plastics that other companies use as key ingredients for everyday productsincluding food packaging, automobile paint, clothing fabrics, beverages, cosmetics, and more. Eastman is headquartered in Kingsport, Tennessee, where about 7,500 of its 10,000-plus employees work and most manufacturing occurs. Eastman also has 16 other manufacturing plants (including joint ventures) in nine countries and multiple sales offices worldwide. Eastman is a Fortune 500 company with 2010 revenues of U.S.$5.8 billion.

The Need to Manage Assets Well

Like all large corporations with vast physical plants, Eastman is interested in managing its capital facilities and assets to maximum effect. In Kingsport alone, Eastman owns 500 buildings filled with tens of thousands of pieces of equipment. Eastman needs to keep tabs on everything it owns, from laboratory microscopes to wastewater treatment facilities, and through design, construction, operation, maintenance, renovation, and decommissioningwhether the work is done by Eastman or vendors.

After developing our requirements, it took two people just four months to create AIM on SharePoint Server. This eliminated the $350,000 expense of buying a commercial product and customizing it.
Ed Montgomery

Project Manager, Information Technology Project Office, Eastman Chemical Company

The industry term for the process of wisely caring for capital assets is asset information management. For a capital asset to perform optimally and provide maximum return on investment, companies need to have complete, accurate, and immediately available asset information. Employees dealing with those assets need to be able to answer questions such as: Who made this asset? How old is it? What is its role? Do we have spare parts on hand? What maintenance work is pending? What parts are under warranty? How do I install it? How do I operate it? Poor asset management results in equipment downtime, operating delays, higher maintenance costs, shorter equipment life, and environmental and safety incidents.

Problems with Older System

For years, Eastman used a commercial document management system to perform asset information management. This program was also used widely to manage documents in other parts of the company. Eastman has hundreds of capital projects open at any one time, ranging from a week-long project to repair a piece of equipment to a five-year project to build a new manufacturing plant. Whenever a group kicked off a capital project, it would create a document management site where all the documentation, schedules, and other information for that project were stored and shared. By 2009, Eastman had approximately 2 million documents in its capital-projects sites, which were used daily by about 4,000 Eastman employees, ranging from engineering to maintenance staffs. However, the software had limited metadata capability, so it was difficult to enforce metadata on documents. There were multiple versions of the same document, so project sites were overflowing with out-of-date and duplicate documents that frustrated and prolonged document searches. It was difficult to implement complex workflows and alerts in the program, so once the engineering staff had a capital asset in place, it could not easily notify the maintenance team so that it could prepare the maintenance schedule and order spare parts. These software inefficiencies resulted in asset management inefficienciesmaintenance delays, equipment downtime, and even manufacturing slowdowns. From a programming perspective, the program required specialized skills and services that were difficult to find and quite expensive. Creating workflows required customizing the software by using an obscure pseudo-object-oriented programming language from the vendor. And for all its challenges with the software, Eastman was spending a huge amount on licensing fees.

Solution
While employees were struggling with this document management software, Eastman was busy rolling out Microsoft Office SharePoint Server 2007 as its companywide intranet software and for team collaboration sites across the company. Employees found Office SharePoint Server 2007 so easy to use and so helpful in streamlining business processes that between 2007 and 2009 they created approximately 7,000 SharePoint sites used by nearly all 10,000 employees. By 2010, Eastman had approximately 10 terabytes of information on SharePoint sites. With the gradual and grass-roots shift to Office SharePoint Server 2007, it became increasingly onerous for employees to move between it and the document management program. We had long wanted to get rid of our document management system and standardize on Office SharePoint Server as our companywide content management platform, says Ed Montgomery, Project Manager in the Information Technology Project Office at Eastman Chemical Company. The effort intensified when the national economic recession settled in, around 2008, and cash became scarce. We no longer had the luxury of

maintaining multiple document repository tools providing overlapping capability. In January 2009, Eastman embarked on a serious effort to shut down the older program. Even though Office SharePoint Server was easier to use than the previous program, Eastman faced a great deal of customization work to replicate the asset management functionality in that program. However, good news came in early 2010 when Eastman found out about Microsoft SharePoint Server 2010, the successor to Office SharePoint Server 2007. Many of the capabilities that we would have to create from scratch in Office SharePoint Server 2007 to replace our previous asset management application were present out-of-the-box in SharePoint Server 2010, says Jim McGuire, Supervisor in the Global Collaboration and Portal Architecture Group at Eastman Chemical Company.

Development Efficiencies
In August 2010, Eastman deployed SharePoint Server 2010, and two Eastman developers began the work of recreating the asset management application in SharePoint Server 2010. By December 2010, they were doneafter just two months of planning and two months of development work. Eastman calls the new application AIM (short for asset information management). We did far more than just move documents from point A to point B and replicate previous functionality in SharePoint Server; we used the features in SharePoint Server to change our business processes to help employees be much more efficient, says Rebecca Dietrich, one Many of the of the two developers and a Systems Analyst in the Global Collaboration and Portal Architecture Group at Eastman Chemical capabilities that we Company.

would have to create from scratch in Office SharePoint Server 2007 to replace our previous asset management application were present out-of-thebox in SharePoint Server 2010.
Jim McGuire

In addition to the out-of-the-box features in SharePoint Server 2010, Dietrich and her colleague used Microsoft SharePoint Designer 2010, an HTML editor and web design program for creating and modifying SharePoint sites, and the Microsoft Visual Studio 2010 development system. The enhanced integration between SharePoint Server 2010 and Visual Studio 2010 saved me a lot of work, says Kevin Tinn, the other developer and also a Systems Analyst in the Global Collaboration and Portal Architecture Group at Eastman Chemical Company. When you create a SharePoint project in Visual Studio 2010, it creates the deployment package for you, which automates a good bit of the development process. Developers are free to focus on being more innovative.

Eastman made heavy use of content types in SharePoint Server 2010. With content types, employees can specify the content fields, policies, workflows, and other rules for a specific kind of content, such as a design document. Once defined, content types can be extended to other documents and reused across SharePoint sites. Each capital project has its own SharePoint site, and every document in that site can be assigned common metadata, Tinn says. Employees can also upload multiple documents in one step. These are efficiencies that save time and also ensure metadata accuracy and consistency and easier document search.

Supervisor, Global Collaboration and Portal Architecture Group, Eastman Chemical Company

New Features Save Time, Improve Accuracy

Eastman also used the SharePoint Server concept of document sets, a group of documents that support a single project and share the same metadata. The entire document set can be versioned as a whole and downloaded as a compressed zip file with all the contents. People can also initiate a workflow on the entire set instead of individual workflows for each document. We used document sets to create a new content type called a transmittal, which we use to move project documents from one stage to another with automated efficiencies, Dietrich says.

Streamlined Asset Lifecycle Management

As an example of how AIM has made asset management more efficient and accurate at Eastman, imagine the purchase of temperature and pressure transmitters for an Eastman hydrolysis batch process. The process begins when an Eastman engineer develops a specification sheet for the transmitter, defining all the parameters that the device must meet in a particular application, and assigns a unique identification number. He or she also creates or modifies drawings to indicate where these devices will be installed. The engineer then creates or modifies workflow diagrams and training materials. A SharePoint site in AIM is created programmatically for the capital project, where all the documents related to that asset will live. As documents, images, and drawings are uploaded to this site, metadata is assigned. When the specification sheet and related documents are ready to send to outside contractors for review and price quotes, the engineer uses automated workflows in SharePoint Server to notify them. Eastman engineers and contractors can easily collaborate on the SharePoint site, making edits to a single copy of a document and leaving version control to SharePoint Server. Automated workflows eliminate the constant flow of email messages and version-control confusion experienced with the previous program. Once Eastman has selected a vendor to build or provide the asset, construction or customization begins. All engineering documents generated during this phase are stored in the same SharePoint site, with metadata added automatically or manually to ensure easy document search and retrieval later. Once the capital asset is finished, delivered to Eastman, and installed, the maintenance staff responsible for the asset is automatically notified before the asset goes into production so that they have time to order spare parts and create a maintenance plan. At the same time, the projects AIM site is automatically migrated to archival status, where all documents are available for reference for two years, at which time the site is automatically deleted. With SharePoint Server 2010, Eastman has built-in records management capabilities that it did not have before, with rights management pushed to project managers, who are responsible for assigning and terminating access rights to AIM sites.

Improved Search Capability

Eastman uses the built-in enterprise search capability in SharePoint Server to return search results to employees who need to find documents in AIM sites. One of the big complaints about our previous system was that people couldnt find documents, says Richard Lane, Systems Analyst in the Global Collaboration and Portal Architecture Group at Eastman Chemical Company. Or they found multiple versions of the same document. With SharePoint Server 2010, we sped up search with rich metadata for every document. If users know just about anything about a document, they can quickly find what they need.

Eastman is evaluating Microsoft FAST Search Server 2010 for SharePoint for more sophisticated and broader search results. Ultimately, well use FAST Search Server to deliver not only content but also people and data, says Tinn. For example, if someone enters the word safety we want them to see safety-related documents, our division safety coordinators, safety statistics, and so forth. Eastman runs the AIM application on five virtual machinestwo web servers, one application server, one database server, and one index server.

We estimate that we are seeing an annual cost avoidance of $4.3 million by managing our asset more effectively, eliminating downtime, and reducing maintenance costs.
Ed Montgomery

Benefits

By migrating its asset management application to SharePoint Server 2010, Eastman Chemical Company was able to avoid spending $350,000 on a commercial replacement. More importantly, Eastman is able to manage capital assets more efficiently, avoiding an estimated $4.3 million annually in downtime and maintenance costs. The company also estimates speeding up capital project cycles significantly and expects employee productivity gains.

Four-Month Time-to-Market for Custom Program; Cost Avoidance of $350,000

There is huge value to Eastman in getting a major corporate application off the older document management program and on a more modern, feature-rich platform so quickly. After developing our requirements, it took two people just four months to create AIM on SharePoint Server, Montgomery says. This eliminated the $350,000 expense of buying a commercial product and customizing it. Plus, we realized the benefits sooner.

Project Manager, Information Technology Project Office, Eastman Chemical Company

Capital Cost Avoidance of $4.3 Million Annually

With AIM in place, Eastman is able to perform asset information management much more efficiently and accurately, minimizing the chance that equipment and facilities will be unavailable, expensive to maintain, or even dangerous for workers. Based on external studies, we estimate that we are seeing an annual cost avoidance of $4.3 million by managing our asset more effectively, eliminating downtime, and reducing maintenance costs, Montgomery says. This is an enormous benefit to the company.

Capital Project Cycles Reduction

The ability to locate and manage capital-projects documents more efficiently will enable Eastman to complete these projects faster, which has trickle-down acceleration across the business. Were estimating reducing our capital-project execution cycle significantly, which means that we get equipment in place sooner so we can get new products to market faster, Montgomery says. Getting products to market faster helps us be more competitive in very competitive marketplaces.

Employee Productivity Gains

The efficiencies provided by AIM also generate big employee productivity gains for Eastman. By eliminating the older program, Eastman simplified processes and made workflows more efficient, which saves employees time throughout the day. Very conservatively, I estimate that 2,000 employees and contractors working for Eastman are saving at least five minutes a day, Montgomery says. In a company as large as Eastman, even small time savings multiplied by thousands of employees and contractors adds up to big savings. Eastman will also be able to comply with internal and external audits faster and more easily by using AIM. Were able to identify documents needed for audits probably twice as fast as we could before,

Montgomery says. Audits occur on a frequent basis because were a chemicals manufacturer, so this is an important efficiency gain in the area of regulatory compliance.

Server Costs Reduced 60 Percent

Yet another savings that Eastman has realized by using SharePoint Server 2010 is connected with the ability to virtualize AIM. We were never able to virtualize the previous application due to resource throttling issues, McGuire says. Because we were able to virtualize the SharePoint Server environment, the server operating cost for this application was reduced 60 percent, eliminating a recurring capital cost of roughly $60,000 every three years.