SCM 303 Introduction to Supply Chain Management: 3M, A Product for Tomorrow!

3M, A Product for Tomorrow!

By Andrew Stefanick and Tyler Jelonek

Dating back to 1902, 3M was started in Two Harbors, Minnesota on Lake Superior by five businessmen: Henry Bryan, Hermon Cable, John Dawn, William McGongale, and Danley Budd (3M History) (or as it was previously known, Minnesota Mining and Manufacturing Company) 3M is an international collection of companies that produce more than 65,000 consumer products (3M Stories - Keep Moving). The products span industries from healthcare to transportation, but they are more commonly known for their various office supplies. 3M requires more than 88,000 employees worldwide in 196 countries to insure everything runs smoothly (3M Stories - Keep Moving).

3M’s supply chain is in a state of transition. Currently, 3M has 214 different plants throughout the world (Wall Street Journal). 3M plans to reduce its supply chain by moving from small production plants to large regional hubs. The large regional hubs can produce a wide array of goods. Currently, supply chain activities for a product may have to travel to many different sites. This has led to long cycle times and large transportation costs. The introduction of regional hubs should lower costs and cycle times. These regional hubs will produce many different products in the same location, thus reducing complexity as well. Furthermore, each hub will cater the products it produces to the region in which it is located (SC Digest). The supply network change also moves production from various contractors to in house; The move to regional hubs vertically integrates the supply chain. This supply network change will streamline 3M.

Demand management plays a large role in 3M’s corporate strategy. Forecasting demand helps 3M raise and lower output to meet the shifting global markets. This increases the overall profitability of 3M. The supply network design and demand management working in unison creates a unique supply chain that is unlike any other.

Since 3M is such a massive company, their supply chain allows them to win against their competition by purchasing large amounts of raw materials. In addition, 3M owns a majority of their physical locations, which helps reduce their overall operating costs (3M). Since they do not have to pay rent, this keeps more money within the company, which can then be allocated to other areas. Another strategic aspect of their supply chain, is their location of plants to water shipping yards. If their products are made closer to the water it becomes easier and less expensive for them to be shipped.

3M combines multiple technologies in unison to meet a specific customers needs helping to reduce lead time by anticipating future market trends. It is from their data analytics of customers which helps them predict how to reach new potential customers (3M™ Clean-Trace™ Online Software). From the implementation of the expert choice process, 3M continue to create products in shorter time frames than before (3M Makes Critical Supply Chain Decisions Using Expert Choice). By creating products involving less time in product development streamlines more opportunity for sales and lowers research costs.

A major part of 3M’s supply chain is the high standards of Six Sigma when creating quality products for consumers (3M.com). Six Sigma is benchmark that helps reduce the number of defects and thus saves money by preventing external failure costs in the process. In order to protect their supply chain governance and the threat of counterfeit products, they actively pursue companies that infringe on their patents. It is from the hard work of their employees that they have an excellent reputation when it comes to standing by the products they create.

3M responds to customers’ needs and desires especially with regard to global impact. Starting in 1975, 3M started their 3P initiative, which stands for Preventing Pollution Pays (3P - Pollution Prevention Pays) Since that date; they have reduced $3.8 billion pounds of pollution and saved nearly $1.8 billion in pollution costs (3P - Pollution Prevention Pays). The altering and re-engineering of their staple products has led to this bottom-line success. However, a large part of this has come from people, many of whom are 3M employees themselves. Over the years, these people have been able to complete 10,000 projects, some that include redesigning adhesive electrodes and replacing solvent based paper treatments in Brazil (3P - Pollution Prevention Pays). The loyalty of 3M employees to help out and give back, shows their passion for 3M and translates into hard workers that get tasks accomplished for their customers.

Large-scale natural disasters and accidents threaten 3M’s supply chain. With the move to large regionalized plants, natural disasters that could incapacitate a plant would be devastating. Also, demand management introduces risk into the supply chain. Forecasts are not always accurate, leading to possibilities of missed opportunities or over production.

3M is a giant in the international business world and diverse in their business pursuits. Their intelligent usage of supply chain management techniques has helped the growth of 3M and propelled them to success. In order to maintain this success, money needs to continue to flow into new technologies and emerging markets. As the growth of technology in the past 15 years has streamlined growth in large markets, such as China and India, 3M’s reliance on information technology to anticipate new ventures will remain important for the foreseeable future.

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