ON 22 April 1996, consumers around the world began buying and using products and services from an entirely new photographic system: the Advantix Advanced Photo System (APS). The products' simultaneous introduction worldwide by 45 different companies made photo industry history. Also historic was the unprecedented collaborative process from which the APS evolved. Eastman Kodak worked closely with its top competitor, Fuji, as well as three leading camera companies: Canon, Minolta, and Nikon. The film, cameras, and photofinishing services were based on several new technologies and a set of detailed specifications developed jointly by the five System Developing Companies (SDC). Licenses were then offered to other photographic companies, so they could also make products or offer services for the APS.
This project, named “Orion,” was among Kodak's most ambitious ever. Initial brainstorming of concepts began in the mid-1980s. Kodak knew that the 35mm system was the current benchmark for photographic quality and consumer utility, but recognized that improvement opportunities would stimulate growth in a mature industry. Thus, the company began searching for partners in the late 1980s, because it believed a better system for the consumer would result, and because it wanted to minimize the risk of competing standards that would only confuse the industry. By November 1991, a five-party agreement had been reached on how the SDC would work together. Requirements and specifications followed, as well as product development and manufacturing design.
Exhibit 1. This reference guide to the Kodak Materials Commercialization Process (KMCP) shows the gates and phases process that was followed in the project. Gate numbers, mentioned throughout this article, correspond to the major milestones of the project as described above.
Within Kodak, a formal project management team was established by early 1992. There were several major setbacks in technology and in reaching consensus on how the new system would look, but the shared vision among the SDC and strong internal support from senior management allowed Kodak to overcome major obstacles. Finally, the photofinishing equipment for the new system was announced at a London show in October 1995. The full system was announced simultaneously by all prepared licensees on 1 February 1996, with availability to consumers on 22 April.
At the time of full product announcement in February 1996 Kodak CEO George Fisher indicated that $500 million had been invested in the program, and that Kodak was on a path to spend another $500 million before being able to measure the full success of the new system. This investment was justified by the most extensive consumer research in the company's history, with over 22,000 people interviewed worldwide.
The heart of the new system is a film cassette that can be easily loaded into a camera without the need to “thread” the leader onto the camera wheel sprockets. While the film is based on traditional silver halide chemistry, the format is smaller (about 60 percent of the area of a 35mm negative), allowing for smaller, more portable cameras. At the time of image capture, the user may select from any of three print sizes for each picture in the same film cassette. In the most expensive cameras, one can even eject a partially used cassette and reload it later for further use, without the risk of double exposures. The processed negatives are returned in the original cassette, along with the prints and an index print that contains a miniature image of each picture in that set. Extensive backprinting is possible with some camera models, including actual date and time of image capture, as well as image titles. Storage of negatives and re-ordering of prints is much easier—no more need for shoeboxes!
Project Complexity/Unusual Conditions. Orion was the most complicated photographic system project ever undertaken by Kodak. Whereas most projects involve a change in just one element of a photographic system, this project represented a change in all system components. The film base for color negative film has only changed twice in Kodak's 115-year history—but Orion not only changed the film base but also changed the film packaging, the cameras, and the photofinishing equipment.
Kodak jointly developed key specs with competitors. For the good of the industry and the consumers, five companies worked together on key specs for the Advanced Photo System: Kodak, Nikon, Canon, Minolta and Fuji, Kodak's chief rival in traditional photography. There was a shared vision for a new system, but each company worked to protect its own interests. Deadlines were set, but couldn't be forced. There were cultural, language, and geographic barriers, with Kodak being the only non-Japanese company among the five.
Two new technologies were introduced. These are the leaderless film cassette and magnetics on the film. The leaderless cassette is really a small “engine” that thrusts the film out of the can and across the inside of the camera. The processed negatives are returned to the consumer, uncut, in the original can. Reliable machine reading and writing of information required extensive hardware and film design for the magnetics technology. Assurance was also needed that the magnetic layer would not cause an undesirable color effect in the final prints. The magnetics work earned four Kodakers the 1996 Inventor of the Year Award from the Intellectual Property Owners Association.
Kodak depended on other companies for some key products. Noritsu provided photofinishing minilabs. Systel, Gretag, and Kodak all produced equipment for high-speed photofinishing environments—some of each was necessary for the total, integrated high-speed solution. The companies needed to work cooperatively, including coordinated joint testing at test sites. Progress reports, which couldn't be mandated, were shared voluntarily.
Kodak's team was international. Four key Kodak camera models are made at a facility in Monterrey, Mexico. A photofinishing accessory is made at a Kodak plant in Germany. Marketing had a worldwide team, with representatives from the U.S., Canada, Latin America, Europe, Japan, Australia, and China.
The system was jointly tested. Many companies volunteered their products prior to announcement and launch for integrated system testing. The tests were designed to protect the confidentiality of each company's new products, but allowed feedback on the performance of a given product in the system with those of other companies. The tests proved a useful indicator of the overall system robustness.
Special attention was given to project security. By the time of introduction, over 8,000 Kodak employees had been given personal security briefings and special identification badges. Until introduction, no information was shared with other Kodak employees, families, or friends. Special locks, project code names, and non-disclosure agreements with other companies were all part of the special protective measures necessary for success.
Scope Management. The Orion vision and mission statements set in December 1991 remained unchanged for the duration of the project and provided focus for team members.
The “Concept Document” was a deliverable at Gate 0 in December 1992 (see Exhibit 1). This 25-page document included the identified consumer needs, benefits to Kodak and the industry, strategies, requirements, product descriptions, technology and manufacturing approaches, business case, schedule, and key risks. Some significant changes occurred later and the Concept Document was adjusted and approved once again, in mid-1994.
The Concept Document was a basis for Kodak's participation in the SDC. The key product of the SDC was the “Red Book,” a document of key requirements and specifications for the new system. This was the document given to licensees beginning in 1994. Internally, the Red Book and the Concept Document supported the “Black Book,” which further described requirements for Kodak products. The Kodak team created the Black Book to co-optimize film, camera, film cassette, and photofinishing designs for best consumer and photofinishing lab performance. This provided input to the individual product design teams that wrote requirements documents for specific products.
A simple example of the flow: The Concept Document described the need for a new photo system with print quality as good as 35mm. The Red Book specified the architecture for the use of magnetics, so the camera can communicate scene information to the photofinisher via the film. The Black Book for Kodak allocated quantitative requirements for improved image quality to the camera and photofinishing teams. These teams wrote requirements for what Kodak cameras would specifically write to film, and how Kodak computer algorithms in photofinishing equipment would use this information to generate better prints.
Each area did its own detailed planning, with a focus on key interface and overall project milestone targets. Changes in scope were managed through the Orion Management Team's weekly meetings, which included the leader for each area. Significant changes to scope were managed through a formal process.
Time Management. We managed by milestones. Each project area was allowed to use project software that best suited its needs. Progress against key milestones in each area was reported monthly at a scheduling meeting. Each area filed a one- or two-page report that covered accomplishments, concerns, and plans. The primary software products employed in the project areas were Artemis in the Film Finishing area and Microsoft Project elsewhere.
Some benchmarking was done against previous Kodak projects. The camera team looked at the most recent 35mm camera model they had commercialized, even though they knew the APS camera would be more complex. Film Finishing considered the factory it built for the Disc photo system project. The photofinishing team examined previous work on printers and projects with complex equipment not related to photography. There were no simple benchmarks for other challenges. Some equipment had no previous equivalent, like the Kodak Digital CLAS Film Scanner that was required in Kodak photo labs for this new system. Orion also had no benchmark for the time needed to negotiate and agree with the SDC on system requirements and specs. Kodak and Fuji had several major design disagreements in 1993 that delayed progress. Capital work in the Film Finishing factory was frozen during this time, with many team members loaned to other projects until resolution was reached.
The Orion Team had a unique situation in Photofinishing. A high-volume photo lab requires six different pieces of equipment for the new system, of which Kodak was only making two. The rest had to be made by licensees under their own labels, not as suppliers to Kodak. These other manufacturers (OMs) had no obligation to share schedule progress with Kodak, yet we were all depending on one another for success. Each company understood the importance and worked toward the established overall goals. Meetings between Kodak and the OMs were frequent. The Kodak OM leader would report at the monthly schedule meeting his best assessment of each company's position using Kodak gates and phases terminology.
At Project Gate 2 on 1 December 1994, targets were set for Gates 3 through 6. Gates 3 through 5 were achieved on schedule, in the same month as the target. Although Gate 6 was two weeks late (12 April vs. the 31 March target), Kodak made its worldwide announcement on 1 February 1996, as planned, and consumers were able to begin purchasing Kodak Advantix film and cameras on 22 April 1996, the launch date agreed upon two years earlier.
Cost Management. The Orion Management Team included a full-time financial analyst. In addition, there was a full-time analyst for each key project area. Existing corporate information systems and processes were used to plan project budgets and report actual costs. The lead analyst provided a summary report monthly for the entire project and for each area.
The capital investment required for the new Film Finishing factory was so significant that it required use of the existing Special Expenditure Requisition (SER) process, a series of guidelines designed to ensure good planning, estimating, and risk management. The application included a Monte Carlo simulation to address uncertainties, maximum foreseeable loss analysis, basis of estimate statements, key assumptions, and a management reserve budget (contingency). Due to its size, the Orion SER was reviewed and approved up to and including the level of the Eastman Kodak Board of Directors.
Quality Management. Eleven months after its announcement, Business Week (13 January 1997) selected the Advanced Photo System as one of the best new products on the market. Consumer Digest selected the Kodak Advantix 3700ix camera as a best buy in its 1997 annual buying guide. This response from the market indicated that one key quality objective had been achieved: customer satisfaction.
Each area of the Orion project used standard tools to ensure high quality, including FMECA (failure mode, effect, and criticality analysis), robust design methodology (identification of noise/control factors, designed experiments), and systems modeling.
The Film Finishing factory, where film is slit, spooled into cassettes and packaged, is considered to be world class in design and performance. Each process step was designed for six-sigma quality. Product, process, and metrology were concurrently designed over several years by a team of engineer-statisticians to assure high performance.
The System Requirements/Verification Team was in the unique position of ensuring the quality of the integrated system. They were the advocates of the end consumer and understood that the quality of the picture was of supreme importance, followed by ease of use and reliable functioning of the products. In the “Requirements” function, they worked with the SDC to produce the Red Book, and with project areas to produce Kodak's Black Book. This provided the basis for meeting consumer needs, as identified in the consumer research studies. In the “Verification” function, the team used a variety of methods to test system quality, including weekend camera tests by team members, pre-launch tests of photofinishing equipment at selected photo labs, and human factors testing. It was this same team that co-sponsored the integrated system testing for licensees.
The System Team routinely assessed overall project progress against a list of 17 key features. They also used a Kodak private electronic bulletin board to keep issues visible to the various development teams, which were spread, among four geographic sites in Rochester.
Human Resources Management. The Orion Management Team (OMT) was a classic “strong project matrix.” The manager, Bill Janawitz, and the marketing task manager, Bill Smith, belonged to the sponsoring Consumer Imaging business; most of the remaining resources were on loan from other organizations. However, the team was fully dedicated to the project and usually put project needs ahead of priorities in home organizations. The team sat together and moved three times in five years to remain as close as possible to the appropriate people.
The Orion Team used a special set of security procedures. For example, there were face-to-face briefings with every one of the 8,000 employees who were cleared for the project, of whom approximately 1,000 were dedicated full-time. The procedures were so effective that the average non-involved employee knew nothing about the effort or the new system until it was publicly announced. Project members strongly identified with the team and understood the importance of their work.
The project leaders inspired one another and the rest of the team through their examples of effort and personal sacrifice. One team leader logged over a million flying miles between Rochester and Japan in five years. The team had a strong bond due to the shared vision of a new photo system that would be truly exciting and have a major impact on company performance and the photo industry. In addition, there was focus on the key competitor, Fuji. Kodak knew this system offered a new opportunity for Fuji to assert themselves. The Orion Team was determined, in spite of the necessary collaborative efforts on system requirements, to offer superior products in head-to-head competition.
Most positive reinforcement measures, such as parties for key interim milestone accomplishments, were handled at the local project area level. A luncheon for 1,000 people marked the start-up of the Film Finishing factory. A black-tie party was held at the George Eastman House International Museum of Photography on the evening of public announcement. Shortly after announcement, a party for all team members and their families was held, with over 3,500 people attending. The party included displays from PMA, the large U.S. photo trade show held in Las Vegas to introduce the new products. Very few employees ever visit a trade show, so the party provided an opportunity to bring the show to them. Personal recognition reinforcements in the form of promotions, stock options, bonuses, and new job opportunities were provided to key contributors.
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Communications Management. Information flowed freely among those with security clearance within the project team. The tools commonly found within a large company were employed—electronic mail, voice mail, faxes, and cascades of information through staff meetings at various organization levels. The program manager used weekly Orion Management Team meetings and voice mail to communicate issues from senior management. The entire OMT was usually able to meet with the Consumer Imaging (sponsor) leadership at quarterly meetings. Two years prior to launch, the OMT moved to a location at corporate headquarters that was just two floors away from Consumer Imaging management.
The program manager, Bill Janawitz, held “town meetings” quarterly with all the project staff. At these meetings, he spent half of the time giving prepared remarks about status and issues and the other half answering questions from the audience. He is an excellent communicator in terms of creating a vision, energizing the team, challenging them to perform better than they thought possible, and being sincere and honest in addressing questions.
An electronic bulletin board was available to about 1,500 team members. The board contained general information such as vision, mission, and an organization chart. It also contained milestone schedule information (planned and actual completion) for 300 key project milestones. Any team member could find a list of key system issues and resolution plans. All of this information was current and available worldwide to those with access.
Milestones for each project component always required a review, given by the technical or marketing leaders to the manager for that area and the program manager. These were used for verifying status and having a dialogue about issues. In turn, project-level milestones were reviews given by the OMT to Consumer Imaging and corporate management, including the CEO. The project leaders met monthly to review the schedule. Their written reports were summarized into a monthly status report for Consumer Imaging management.
The marketing manager coordinated the efforts of regional marketing leaders from around the world. His team met quarterly, beginning in 1992. They sponsored consumer research and tested various product, graphics, and advertising concepts with focus groups. They developed launch strategies and contingency plans for anticipated competitor actions. It was unprecedented at Kodak for key marketing personnel to be involved so early in a program and continue to be full participants throughout the project life.
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Normal communication channels were also available to project team members and were used. These included the suggestion system and the “Open Door” policy, where an individual can approach his or her supervisor's supervisor if they feel an issue is not being resolved by the first supervisor.
Kodak employees not cleared for the project knew nothing except that Kodak was working with the other four companies on a new photo system (this was a public statement made in 1992). Photofinishing equipment was publicly announced in October 1995. Periodic updates were then provided through the Corporate Communications department, including televised summaries (Kodak has a network of TV monitors in many plant buildings). These summaries included excerpts from photo shows in Germany and Las Vegas and interviews with people at various test sites. At the time of system launch on 1 February 1996, a special color edition of the company newsletter, dedicated solely to Advantix, was mailed to all employees. On 1 February, volunteer team members staffed six company sites in Rochester to offer hands-on demos of the system to employees.
Risk Management. The Orion project contained many technical and business risks. Some of the significant ones are listed here, along with the methods used to identify, analyze, and address them.
■ Will the industry accept a new traditional photo system? Is there room for innovation or will digital photography close the window of opportunity too soon?
■ Can a worldwide standard be established so that all manufacturers' products work with one another?
■ Will competitors be able to work together in good faith on specifications for a new system, and accomplish it in a timely manner?
■ Can the new system and 35mm coexist? Can we manage a smooth transition from one to the other, avoid “freezing” 35mm sales by announcing the new system early?
■ Will the industry participate, especially photofinishing lab owners who must make a significant investment in new equipment in the belief that it will be successful?
■ All key components of the system are new (film support, film emulsions, cameras, and photofinishing). Two critical new technologies must be developed: magnetics on film and a thrusting film cassette. Can we make it all work together, and on schedule?
■ Can we deliver 4x6 inch prints from a smaller negative that are as good as 35mm?
■ Can Kodak deliver the best set of products within the new system?
■ Can Kodak align itself with some key companies that are needed to deliver critical parts of the system, e.g., some of the photofinishing equipment?
■ Will Kodak be able to profit from the new system?
An external consulting firm was hired in 1990 to assist in the analysis of the proposed new system vs. alternatives (do nothing or add features to 35mm products). After three months of work, the message was clear: the new system with many features bundled together was the best option, and there was a window of opportunity before digital photography would be competitive. The external firm had the objectivity needed and the expertise in analysis to be credible.
The System Developing Companies (SDC) alliance increased the probability that one worldwide standard could be developed. The joint development agreement mitigated risks that a given SDC member would not act in good faith in development of the system, or that they might break from the alliance and work on their own version. Though the ability to make joint progress quickly remained a risk throughout the project, regular meetings and daily faxes helped mitigate this risk.
Regular status meetings and reviews at key milestones were methods for managing schedule and quality risks. The preparation for these reviews was helpful because it led to better articulation of positions and to contingent or preventative plans. The “gatekeepers” at milestone reviews, including the CEO, signed feedback forms at the end of the review, indicating their concern and granting permission to proceed. At each review, the question was always asked: “Are the risks being managed? Are they identified, with action plans in place?”
The business case was tested routinely and often for robustness. Ranges of uncertainty were added to key variables such as sales, unit manufacturing cost, and launch timing to see if the net present value remained positive even in unlikely worst-case scenarios. A Monte Carlo simulation for the schedule was performed eight times to continuously examine the likelihood of an on-time introduction and the key project areas to watch.
Contract Management. Procurement experts managed many routine elements of contract management within Orion. The overall project strategy was to develop a reliable product as quickly as possible (first priority), with good cost control (second priority). Project security needed to be maintained but team members were free to use vendors when the expertise or capacity was not available within the company.
Contracts and relationships were built on a set of shared understandings. There was a total commitment to front-end loading, meaning a review of requirements and expectations with a proactive management team. Written and approved internal documents were in hand prior to contracting. Multidisciplinary teams of Kodak and vendor employees worked as peers in design and decision-making, with a shared commitment to success. Communication within the teams was emphasized, and included written documentation of changes (authorized, approved, and acknowledged by Kodak and the vendors prior to implementation). Trust and respect for each individual and team was always maintained. The focus was always on the future—what will be best for all involved in the long term, and for work beyond this project. There was a rigorous supplier selection process, consisting of pre-visit screening questions, visits to potential suppliers, requests for quotations and confidentiality agreements, and evaluation/selection by the team using defined critical success factors and an agreed upon process.
THE APS WILL TOUCH many lives and is something with which the average person can easily identify. As a new product development program it is unique relative to past Project of the Year award winners.
It was a challenge to concisely describe a project with over 1,000 full-time people that began as a concept in the mid-1980s and was launched in 1996. To keep this report brief, many examples of what was done have been omitted. ■
Chris S. Adams, PMP, was the senior project management consultant for Orion. He stresses that he prepared the Project of the Year application from which this article was derived with a great deal of help from other Kodak personnel.