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Supplier of the year: 3M

The supplier is making more N95 respirators than ever before. Pre-pandemic surge capacity and a focus on real-time visibility enabled the quick shift.

3M is familiar with pivoting its supply chain for global health emergencies. The manufacturer developed surge capacity during the SARS outbreak in the early 2000s — and two decades later, that buffer enabled it to quickly accelerate production of high-priority SKUs during the COVID-19 pandemic.

The manufacturer began ramping up production of N95 respirators in January, from 22 million per month pre-pandemic to 26 million.

By June, 3M was making 50 million respirators per month. It added two new respirator lines at a Wisconsin plant in Q3. It dropped non-critical SKUs and refitted production lines for critical supplies, according to Kaitlyn DeSpiegler, global transportation specialist at 3M, speaking at FourKites' visibility conference in September.

Monthly production in the U.S. will reach 95 million by the end of 2020, a 3M spokesperson said. "3M is making more respirators than ever before."

3M's journey through the pandemic as a supplier of critical items has not been perfect. The overall supply still falls short of demand. The company has also had to fight off counterfeit products. And critics say the manufacturer is too reliant on China for supplies.

But as far as leadership through crisis and supply chain risk management go, experts agree 3M has excelled in producing and distributing supplies in a time of unprecedented demand, earning it the Supplier of the Year award.

A supply chain ready to go

3M's plants were churning out personal protective equipment, but to distribute the critical supplies, "we saw a need to accelerate our real-time visibility," DeSpiegler said.

The supplier was already working with FourKites although not for all shipments and distribution channels. 3M put its critical shipments on the FourKites system to get real-time data in one place, which allows 3M to keep less buffer stock on hand, said Subodha Kumar, professor of marketing and supply chain management at Temple University. Getting parcel tracking live took less than one week.

"Your uncertainty is much less," Kumar said. "You exactly know where the item is." That data translates into aligning inventory orders closely with demand, allowing the lean operations and balance sheets many supply chains strive to achieve.

Planning in a pandemic

The manufacturer transitioned from sales and operations planning to integrated business planning about three years ago, according to Mike Burkett, a vice president and distinguished analyst for the Gartner Supply Chain team. 3M is on Gartner's Supply Chain Top 25 list for 2020.

The planning transition helped 3M combat siloed operational issues, Burkett said. And it helped 3M exchange data with suppliers and customers to better match supply and demand.

"You can't possibly plan for every scenario out there," DeSpiegler said. "I don't think any of us really imagined that in 2020, we'd be seeing the worst pandemic that we've seen globally for over 100 years. What you can do, though, is you can be proactive."

Being proactive stems from having visibility on the ground, she said.

This is exactly how 3M responded when customers didn't yet know what they'd need ahead of the pandemic, said Anshu Prasad, CEO of Leaf Logistics. "3M sent their representatives to the customers to understand realities on the ground, triage, and become part of the solution," Prasad said.

Lessons in agility

3M acknowledged demand for its critical SKUs continues to outpace supply, ​despite preparations and supply chain adjustments. "The demand for personal protective equipment is beyond what any one company can meet," the spokesperson said, adding that healthcare industry demand is up to 40 times above pre-pandemic levels.

3M is a global company with suppliers and manufacturing in many countries, including China. " As Americans, we would all have liked for them to scale production of respirators more quickly. But these extended, complex, global supply chains made that harder to coordinate, " Prasad said.

A more robust domestic sourcing base may have reduced lead times, but it's not a guarantee given the widespread disruption of the pandemic.

3M's response does prove the value of real-time data and agility. Forecasting based on historical models was rendered ineffective during the pandemic, with real-time data proving more valuable. And demand shifted quickly at the consumer level, amplified up the supply chain via the bullwhip effect and requiring suppliers to adjust on the fly.

"This is a wake-up call," Kumar said. "Cost reduction is good, but we have lost a lot of flexibility in our supply chains."

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Technology and Operations Management

Mba student perspectives.

• Assignments
• Assignment: RC TOM Challenge 2017

Too much opportunity? 3M’s supply chain goes digital

What happens when digital technologies are introduced to a massive global supply chain? 3M provides one perspective.

Who is 3M and why does this company care about the digitalization of supply chains?

Formerly known as the Minnesota Mining and Manufacturing Company, 3M is $30 billion multinational conglomerate based in Maplewood, Minnesota. 3M manufactures over 55,000 products across multiple industries and operates in over 65 countries.[1] Their global supply chain, inclusive of 200 manufacturing plants, 100 warehouses, and 25 customer-facing divisions is not only critical but also considered a competitive advantage.[2]

Yet changes in customer expectations coupled with new technologies mean the supply chain of today does not, and in many ways, cannot, look like the supply chain of tomorrow. Considered version 4.0, 3M’s supply chain must become faster, more precise, flexible, efficient and more accurate to remain competitive.[3]

“Digitalization” or the introduction of new operational technologies provide solutions for this supply chain 4.0. For example, 3D printing enables impossible shapes to be made with extraordinary precision; cloud computing presents real time network connectivity and significant cost advantages; machine learning provides predictive agility and proactive risk mitigation; robotics and drones permit speedy and efficient production and delivery.[4] With all of these options, the question then becomes where should 3M start?

Pathways to Just Digital Future

3M goes digital:

3M’s leadership realized the need for supply chain transformation in 2011 as part of an overall business transformation.[5]

In a recent interview, Paul Keel, Sr. Vice President of Supply Chain Management at 3M noted that while there were many potential areas to optimize 3M’s supply chain, a common theme across of them was: “Friction occurs at the connection points.”[6]

Consequently, 3M decided to deploy a “common systems backbone” that provides end-to-end visibility to simplify and accelerate their decision making by investing in SAP’s Enterprise Resource Planning (ERP) software.[7]

This software allows 3M to simplify and integrate their supply chain processes, financial transactions and customer interactions on a unified digital platform.[8] 3M aims to complete the implementation globally by the end of 2020 across their ordering and transactional activities, distribution centers and manufacturing plants.[9]

The current ERP deployment enables 3M to further its efforts to transform its supply change in the long term. Such efforts include aligning and integrating common front-end interfaces with back-end processes critical to supply chain effectiveness and efficiency across supplier management, capacity planning, and/or network optimization.[10]

More connections, more complications?

The size and scope of 3M’s supply chain are as much assets as liabilities. The ever multiplying and evolving number of technologies in which to invest require 3M to focus on what makes its supply chain truly advantageous in the long run.

For example, 3M is using their ERP technology to digitally connect the physical supply chains between their suppliers and their factories. Mr. Keel explained, “Their systems talk directly to our systems. Our planning system speaks directly to theirs. They see our consumption, and we can look upstream at their capacity.” That said, often suppliers use different ERP systems requiring cloud middleware to operate as a translation layer.[11]

While optimizing their supply chain connectivity, these system integrations require large bets in spaces that have seen rapid proliferation.[12]/[13] 3M would be well served by utilizing their culture of innovation to continue to explore and evaluate the optimal digital solutions needed to keep their supply chain competitively advantageous. Consequently, one must ask:

Given the speed at which digital supply chain technology is advancing, can a company with such a wide product portfolio, and subsequently such an immense supply chain, keep apace?

How can a multinational conglomerate evaluate whether or not it has truly optimized across all connection points given the ever-expanding array of technological options?

(788 words excluding figures, headers and references)

[1] 3M, “About 3M,” http://www.3m.com/ , accessed November 2017

[3] Alicke, K., D Rexhausen, and A. Seyfert, “Supply Chain 4.0 in consumer goods,” McKinsey & Company , April 2017, https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/supply-chain-4-0-in-consumer-goods , accessed November 2017

[5] 3M, “3M continues to transform our company,” https://www.3m.com/3M/en_US/company-us/enterprise-resource-planning , accessed November 2017

[6] Steve Banker, “Digitization and the 3M supply chain,” Forbes , May 3, 2017, https://www.forbes.com/sites/stevebanker/2017/05/03/digitization-and-the-3m-supply-chain/#37fd7f5541c1 accessed November, 2017

[7]“One on One: Paul Keel, senior vice president of supply chain, 3M,” Supply Chain Navigator: An Avnet Publication , January 2017, http://scnavigator.avnet.com/article/january-2017/paul-keel-senior-vice-president-of-supply-chain-3m/ , accessed November 2017.

[8]3M, “3M continues to transform our company,” https://www.3m.com/3M/en_US/company-us/enterprise-resource-planning , accessed November 2017

[9]Julie Bushman, “Business Transformation: 2017 Outlook meeting,” PowerPoint presentation, December 13, 2016, 3M, Maplewood, MN, https://s2.q4cdn.com/974527301/files/doc_presentations/2016/Outlook/3M-2017-Outlook-Meeting_Bushman_Business_Transformation.pdf , accessed November 2017

[10] “One on One: Paul Keel, senior vice president of supply chain, 3M,” Supply Chain Navigator: An Avnet Publication , January 2017, http://scnavigator.avnet.com/article/january-2017/paul-keel-senior-vice-president-of-supply-chain-3m/ , accessed November 2017

[12] Just one year after 3M invested in SAP’s ERP software, the ERP market grew 3.8% from $24.4B in 2012 to $25.4B in 2013. Louis Columbus, “Gartners ERP market share update shows the future of cloud ERP is now,” Forbes , May 12, 2014, https://www.forbes.com/sites/louiscolumbus/2014/05/12/gartners-erp-market-share-update-shows-the-future-of-cloud-erp-is-now/#3ecb43091fae , accessed November 2017

[13] It is now estimated to grow from $18.52B in 2016 to $29.84B by 2021, at an estimated CAGR of 10%. “Cloud Enterprise Resource Planning,” Market Watch , December 12, 2016, https://www.marketwatch.com/story/cloud-enterprise-resource-planning-erp-market-growing-at-a-cagr-of-10-during-2016-to-2021-2016-12-12-42033054 , accessed November 2017

Featured image is from: http://sugikingdom.com/list-youtube-sub-networks/

Student comments on Too much opportunity? 3M’s supply chain goes digital

As a company with tens of thousands of SKUs, it strikes me that 3M’s supply chain management is as much a product as is a Post-It. Like Domino’s does for its franchisees, it seems like removing the friction between 3M suppliers is a powerful way to achieve operational efficiency. Their scale is a benefit, in this regard; I imagine they have market power to push their supply chain management systems onto their suppliers with relative ease. You ask whether a company like 3M will know whether it is fully optimized. My reaction is that it is more important for 3M to consider how efficient it is vis a vis its competitors and whether it has achieved a return on its technology investment. 3M will theoretically always be able to further improve its supply chain, but if I were a company executive, I’d be more focused on creating a resilient and flexibile system to withstand the inevitable future disruptions.

I really appreciated the perspective in this article, particularly because it focused on digital optimization of a supply chain that did not simply jump straight to blockchain as a cure-all.

In the 3M case the most fascinating part of complex supply chain management is the inability to test or see all possible supply chain states. With so many different products, how can 3M tell if it chooses the right suppliers for each? And what if it made Post-Its side by side with paper, or does it make sense to manufacture those with tape? It is not economically or chronologically feasible to test all combinations or optimize all potential supplier combinations and sourcing. Thus the 3M challenge is similar to the New Zealand boat design tradeoff: 3M can intelligently “parachute” into a particular solution and then optimize, but who knows if a more efficient system exists?

The above commentator rightly points out that comparisons to competition are a critical benchmark and perhaps the most important one. A slightly loftier goal is to use machine learning to discover the true drivers of supply chain cost in such a complex system–machine learning and business analytics were invented for this purpose, although I have never heard of them being applied on this scale. I would not be surprised if a thoughtfully designed ML program could discover some substantial cost savings among 3M’s supply and distribution channels–the Post Office and UPS have used similar programs to great success on a network that is more complex but with fewer SKUs.

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Making Headway Despite Headwinds: 3M’s Winning Regionalization Strategy in Building a Resilient, Sustainable Supply Chain from Singapore

Since the pandemic, we’ve seen how susceptible supply chains can be to external disturbances. Global disruptions exposed the vulnerabilities of complex supply chains and revealed how abruptly production and manufacturing processes could ground to a halt.

However, with challenges also come opportunities — discovering potential vulnerabilities and pain points has led companies to rethink the way that they manage and run their businesses.

In particular, against the backdrop of a world confronted by a possible ‘polycrisis’, a term used to describe a series of volatile and interconnected global crises, building and increasing supply chain resilience has become a top priority for business leaders and decision makers.

To boost supply chain resilience in the face of evolving pressures and constraints, Multi-National Enterprises (MNEs) must move to reorganise and re-examine their existing supply chain networks. This could entail relocating their manufacturing footprint and diversifying their sources of supply.

Reshoring, which entails shifting manufacturing operations to the same country in which the company is operating in, may not be the most effective strategy to manage risks.

Rather, regionalization – a process of splitting manufacturing footprint across more localised economies could enhance supply chain resiliency and allow teams to respond to disruptions quickly. It also further empowers companies to tailor the production and distribution of goods to match the preferences of consumers in the region in a more time- and cost-efficient way.

3M’s backstory — from Minnesota to Singapore

In 1966, 3M, the multi-national conglomerate well-known and loved for their emblematic Post-it® Notes, Scotch-Brite™ scrub sponges, Nexcare™ band-aids, and all-purpose Command™ hooks, set down its first roots in Singapore, a newly-independent island nation at the time.

First established in Minnesota, United States in 1902, 3M was already known as an ‘innovation machine’ for constantly designing and churning out exciting new products across industries. But even then, their foray into the ASEAN region had humble beginnings, with just eight employees in a single office space.

Over the years, 3M has grown immensely alongside Singapore, weathering storms like the Asian Financial Crisis in 1997, the Global Financial Crisis in 2008, and the global Coronavirus pandemic in 2020. 3M has also gradually expanded its regional team to more than 1,800 Singapore-based employees across multiple facilities in the country.

Regionalization as a way forward in a ‘polycrisis’ world

With an effective regionalization strategy which takes into account the consolidation and management of supply chain risks, 3M is able to remain resilient and sustainable in its ASEAN (the Association of Southeast Asian Nations) expansion and operations.

Recognising the potential of this region, 3M seized the opportunity to kickstart their plans to regionalize and transform their supply chain by expanding to Singapore in 1966, and over time, has set up multiple facilities for manufacturing, research and development, supply chain, and business operations.

By implementing both short-term and long-term strategies to tackle supply chain disruptions and build resiliency, 3M has been able to recover from setbacks — pandemic-induced or otherwise — and grow from strength-to-strength.

We share some key insights below, and delve more deeply in  this case study :

3M’s regionalization strategy helped it to ride the waves of COVID, allowing for continued global expansion even during global supply chain challenges. Since establishing its first presence here over the past 50 years, 3M has benefitted from Singapore’s stable business environment and robust IP regulatory framework. 3M has also strengthened its position as a global talent node in the region to realise its goal of providing “region for region” products.

Supported by the trust and stability offered by Singapore as a host for its regional headquarters, 3M was able to create more resilient and sustainable supply chains by embracing new technologies in the digitalisationand transformation of its business.

The heavy investment in digitalization and innovation also enabled 3M to establish a more transparent supply chain that can better anticipate potential bottlenecks by building closer connections with suppliers. The enhanced visibility and better decision-making capabilities provided 3M with much-needed agility in times of crisis.

The use of technology has also helped to improve sustainability and allowed 3M to gain a competitive advantage in this space. For example, by working with paper suppliers to trace the trees from which products originated, 3M was able to implement a digital partner-to-partner information flow to enforce sustainable sourcing. Partnerships with not-for-profit organisations and cloud-based applications are other examples of 3M implementing more sustainable supply chain practices and championing responsible sourcing and traceability.

The road ahead

With an uncertain and volatile business landscape looking to be a mainstay in the near future, a company’s ability to adapt to changes determines its ability to weather any economic or geopolitical changes.

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3M’s forward-thinking strategies and continued spirit of innovation enabled the company to leverage Singapore’s advantages, including a favourable geographic location in the Asia Pacific region, stable business environment, and commitment to technology, to overcome disruptions and remain future-ready.

Get detailed insights into 3M’s forward-thinking and future-ready strategies which enabled the company to leverage Singapore’s advantages for continued growth in the Asia Pacific region and beyond. Download the case study here .

This article was first published by the  Singapore Economic Development Board (EDB) . The Singapore Economic Development Board (EDB), a government agency under the Ministry of Trade and Industry, is responsible for strategies that enhance Singapore’s position as a global centre for business, innovation, and talent. Have the latest insights, stories and analyses on how companies are growing in Asia delivered to your inbox  here .

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For 3m, technology was the key to a new supply-chain mindset.

3M came to the point where an analog supply chain was no longer tenable, says senior vice president of supply chain Paul Keel. The future lay in digitization.

In the case of the company’s supply chain, “legacy” meant “linear.” For years, 3M had achieved better results by hiring more people, building more plants, adding more energy. Keel describes the old philosophy: “You want more ‘Y’ to come out of the supply chain, you need to put in more ‘X.’”

It was a way of thinking that was rapidly becoming outdated. As with any successful manufacturer, 3M was faced with rising customer demands for better quality, more features and lower cost. Shareholders, meanwhile, were demanding a higher return on their investment.

“All companies like 3M have to find a way to bend that curve,” says Keel. “You need to go from a linear relationship to something better.”

With an organization the size of 3M, that’s easier said than done. 3M defines “supply chain” in the broadest possible terms, says Keel. It comprises some 220 plants worldwide, 100 logistics and distribution centers, the design and implementation of all process and plant equipment, $15bn a year’s worth of procurement activities, and some $1.5bn in capital expenditures. Then there are the company’s efforts in Lean Six Sigma , environmental health and safety, and sustainability. All told, roughly half of 3M’s 90,000 employees are involved to some degree in the supply chain.

To tackle that massive organization, a culture of continuous innovation was key. “It’s been central to our business model for 115 years,” says Keel. “Technology to 3M is like air and water.” The company spends between 10 and 11 percent of sales each year on technology, and 6 percent on research and development. Between 4 and 5 percent of capital expenditures are directed to the supply chain, and most of that involves some aspect of technology.

The arrival of Inge Thulin as chief executive officer in 2012 was the catalyst for change. That’s when 3M latched onto the concept of “efficient growth” — the notion that it could expand markets and improve products without a commensurate boost in resources. Other companies call the approach “bimodal,” describing a strategy that addresses operational efficiency, customers’ current needs and innovation all at the same time.

On the efficiency side, 3M was seeking to get its cost of goods sold (COGS) down, and inventory turns up. At the same time, it vowed to accelerate top-line growth with an eye toward achieving better quality, increased service and more assured capacity in line with actual demand.

Digitization became the tool of choice for synchronizing all links of the 3M supply chain, promoting collaboration and open communications both upstream and down, with suppliers and customers alike. Helping to make the task easier was the company’s history of vertical integration. It manufactures 85 percent of everything it sells, ranging from Post-it notes to medical dressings to acoustic insulation.

Most of those products have some degree of chemical content, meaning that even a highly integrated organization such as 3M must interact with the large chemical companies that provide raw materials. With a couple of those suppliers, of which BASF is one, 3M maintains real-time communications ties that synch supply with demand — an example of successful horizontal integration.

The arrangement with BASF links a couple of dozen of the supplier’s plants with five of 3M’s, as well as with the latter’s network of D.C.s. The setup provides “a lot of opportunity for balls to be dropped,” says Keel. But glitches are minimized today via a cloud interface, whereby the partners’ planning systems “speak” directly with one another.

“Now, in pretty much near-real time, BASF can see how much of their inputs are being consumed in a 3M plant and we can look upstream and see available materials,” says Keel.

While 3M has a less intimate relationship with other major chemicals suppliers, it does maintain strong physical and information links with those partners. In one case, says Keel, a physical pipeline extends directly from the supplier’s factory to that of 3M. Such an arrangement, of course, requires that the two sites be close to one another — in this case, a distance of about a mile. Information flows equally smoothly, ensuring that the supplier’s plant receives an accurate demand signal from 3M.

Any global supply chain manager will tell you that internal collaboration can be just as tough to achieve as that involving outside partners. 3M simplified the task by aligning incentives across functions. On the planning side, the company runs three “centers of expertise” — entities that others might call “control towers” — around the world.

One location oversees the supply chain across Europe, the Middle East and Africa (EMEA), involving more than 50 plants and 10 D.C.s. Because 3M operates in so many countries within the EMEA region, it needs a common planning approach. Today, it’s able to aggregate demand across 25 divisions for a couple of dozen countries, then convert that number into an organized production plan.

The effort is half a business-process exercise — getting the right people in place at the right time — and half an information-management task. 3M needs to access data and execute planning for some 65,000 products across the divisions. The digital side of the equation requires a common enterprise resource planning (ERP) platform, integrated business planning (IBP) process, and shared demand-planning interface.

When it comes to achieving internal harmony within a business, there are plenty of stories about the dangers of mismatched objectives. Say, for example, that one part of the operation wants more inventory because it leads to better service, while another strives for less because it results in lower costs, and each department is judged by its corresponding metric. Sounds plausible — except that Keel calls that disconnect an urban legend. “We have found empirically that it is untrue,” he says. “Lower inventory levels equal shorter recycle times, and better service.” In other words, “less cholesterol.”

That said, it’s essential to properly manage the downstream pipeline to customers. And for 3M, technology has proved to be essential to devising consistent, accurate and aligned measures of service.

The company has invested considerable energy and money in setting up a global service portal. The effort consists of three distinct elements: customer-defined scorecards, an internal performance dashboard, and a customer-survey database.

The scorecards align 3M with the service metrics of major customers, especially those of retail accounts that provide point-of-sale data. Fill rate, on-time percentage, backorder dollars — 3M uses whichever yardstick the customer in question is deploying. And that requires an information-technology interface that allows for real-time measurement.

The internal dashboard assigns service data the same weight as other metrics within the company, ensuring that individuals in various departments focus as much on service as on activities geared toward making shareholders happy. Says Keel: “It’s critically important to having everybody maintain a customer-first mindset.”

Finally, there’s the customer-survey database, providing 3M with a common survey format, which allows it to compare results throughout the end-to-end supply chain. As a result, what the company is hearing from a big customer in Asia lines up with input from that same customer’s U.S. operations. Efforts at calibrating customer service worldwide proceed by way of an “apples-to-apples” comparison.

3M’s own technology, consisting of 46 core platforms, drives the underlying business model by which the company communicates and collaborates with customers. Its goal, says Keel, is to “understand those capabilities and co-innovate with them, using 3M technology to solve their programs.”

It’s a relationship built on trust. To be able to drill down into customers’ problems, 3M needs access to their new-product pipelines, R&D teams, and inner workings of their supply chains. Simply put, says Keel, “our interface with customers is central to our whole business model of how we serve them.”

Technology will continue to play a central role in 3M’s supply chain. The company is developing digital systems, in areas such as automation and robotics, that will squeeze even more productivity out of existing physical assets. They’ll make a line run faster, a packaging system more efficient. On the I.T. side, better systems will provide improved links from plant to planning, “between individual assets and the freeway,” as Keel puts it.

Think of those systems as a physical interface, where disconnects are common. “A door breaks at the hinges,” explains Keel. “Car wheels wear down. We focus on how to strengthen the connection points. Often it’s the data that does that.”

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How the pandemic changed 3m’s approach to innovation.

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Complexity is the defining business and leadership challenge of our time. But it has never felt more urgent than this moment, with the coronavirus upending life and business as we know it. For the past few months, we’ve been talking to leaders about what it takes to lead through the most complex and confounding problems, including the pandemic. Today we talk with John Banovetz , 3M’s Senior Vice President of Innovation and Stewardship, and Chief Technology Officer. John is responsible for 3M’s R&D function, innovation processes and its Stewardship Group, which includes 3M’s Environmental, Health & Safety and product stewardship functions.

David Benjamin and David Komlos : How has the pandemic changed 3M’s approach to innovation?

John Banovetz : The biggest change has been to our collaboration model. We've done more external collaborations than ever. For example, we’ve had great collaborations with Ford Motor and Cummins Engines – with Ford on designing a powered air-purifying respirator, and Cummins to increase the production of high-efficiency filters for personal protective equipment. It has been great to learn from them, partner with them, and really collaborate with them.

The pandemic has changed how we think about innovation. We've gone from being somewhat insular to being very open to connecting with external companies; from a place where 3M has the technology, the capabilities, the ability to solve the problem on our own – to a model where there are partners who can teach us some things and help us move even faster.

Benjamin and Komlos : What did you do to transition R&D to a remote working environment, and what did you learn?

Banovetz : Mid-to-late March, we sent home all R&D personnel in our main Research Center. By June, we started bringing people back, with new safety protocols, new cleaning and sanitization methods, and new ways to work with physical distancing.

But the challenge that remains is how you connect remotely with people. As I said, a big part of our model is collaboration and a big part of that collaboration is the informal, serendipitous connections that you make at the watercooler, having a cup of coffee with someone, seeing someone in the hall. When you're not physically there, you lose that. I think a lot about how to continue those one-off random connections that happen as part of the collaboration and innovation process.

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Benjamin and Komlos : Can you share examples of challenges that leaders faced through the pandemic so far?

Banovetz : The pandemic doesn't impact everyone, every place, every time in the same way. China and parts of Asia are in a very different place than the US. One of the bigger challenges has been to manage decision-making and autonomy between local and corporate.

Benjamin and Komlos : How has the pandemic affected 3M manufacturing and supply chains?

Banovetz : It’s incredibly dynamic. The pandemic has obviously slowed some markets – automotive, electronics, and for a while, elective surgeries and oral care. At the same time, we’ve doubled respirator production, and then doubled it again – trying to do that with our manufacturing and supply chains has been an incredible feat. Think about the supply chain itself, all the raw materials, and the fact that we have not changed the performance standards for our products. The N95s we produce today meet prior qualifications. There's been a lot of pressure on our supply chains and on our manufacturing capabilities in those areas.

One of our insights is that we were prepared for a pandemic. We had manufacturing surge capacity ready in different parts of the world because we had gone through SARS and H1N1. So we knew we had to be able to respond quickly to what we call ‘X Factor's’. Now, our production has gone well beyond that, and that reinforces the need to have strong manufacturing and supply chains, and strong relationships with suppliers so that they can ramp up when needed. It's reinforced how important it is to have strong working relationships with regulatory and government trade people.

Our supply chain design has always been somewhat region-for-region or area-for-area, so Asia-for-Asia, US-for-US, and that's played out exceedingly well for us in the pandemic.

The biggest challenge that we've had is just the pace at which we've had to go. If you told me at the start of the year that we’ll go from 20 million to 95 million respirators per month in the U.S. and produce 2 billion respirators globally this year, I would have said ‘no way, can’t do that.’ It’s a testament to our partners and our teams that we have done so. Today, we’re making more respirators than ever before.

Benjamin and Komlos : During the pandemic, how, if at all, has your role and behavior as a leader changed?

Banovetz : I've been much more thoughtful about authenticity and transparency. As a scientist, I've said “I don't know” and “I think” more than ever. I don't have all the answers and I have to reflect that to my teams. I spoke earlier about the back-and-forth between global and local. My leaders in Asia and Europe and Latin America have to make decisions relevant to their specific situation, and I have to trust that they can do it. A lot of it comes down to being authentic and building that trust with them. I’ve had more heart-to-heart conversations with my team than ever.

Benjamin and Komlos : What do you see ahead? What characterizes the new trajectory leaders will have to move their organizations to?

Banovetz : I think fundamentally, people will work differently, and as a leader, you have to change how you think about that. A significant portion of the population may work remotely two, three days a week permanently. Teams will become much more global. Leveraging global teams becomes more important. As a leader, you can create much more diverse teams and bring in many more diverse thoughts, which is awesome because I'm a firm believer that diversity begets differentiation.

For leaders, the question becomes how do I manage a remote team with all these different, diverse opinions?

Benjamin and Komlos : Any other advice you can offer? Parting words?

Banovetz: The pandemic has shined a light on science and the role that science plays in people’s lives. We did a ‘state of science’ survey and it showed skepticism of science on the increase. The pandemic turned that around – people have more trust in science. If the next generation has become inspired to be scientists, epidemiologists, doctors, biologists…I think that would be a tremendous outcome of this experience.

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With patients in long-term care facilities making up  more than 40% of overall COVID-19 deaths  in the nation, many providers have had to quickly respond to an unprecedented pandemic.

When Trilogy Health Services saw the disease reach some of its facilities this spring, it invested in personal protective equipment and increased disinfection frequency at its sites, among other enhanced safety measures. It also put a focus on transparency; keeping families informed about their loved ones through calls, texts, emails and updates on its  website .

While the provider had several outbreaks across its more than 110 senior living communities in the U.S., the majority of communities remained free of COVID-19.

The challenge now for Trilogy and other providers is rebuilding confidence around long-term care, said Leigh Ann Barney, President and CEO.

“Even without a pandemic, safety, cleanliness, and supply chain security are critical aspects to consider for providers of care,” said Leigh Ann. “The products and cleaning processes we’ve rolled out with 3M are going to go a long way in helping us continue to care for our residents, who we consider to be members of our family.”

Stressed supply chains

In early 2020, before COVID-19 became a life-changing pandemic around the globe, Trilogy was working with 3M’s Commercial Solutions Division to see if the manufacturer could offer any cost-saving options.

Once COVID-19 hit, however, Trilogy’s needs were expedited. Suddenly, they needed an immediate, secure source for cleaning and disinfection products.

Fortunately, 3M was able to help Trilogy find the products it needed to clean and disinfect its facilities.

“When our supply chain was threatened, 3M was more than ready to provide us with their support,” said Parker Lacy, vice president of Facilities Maintenance at Trilogy.

Rebuilding confidence

Today, Trilogy is utilizing 3M’s Flow Control chemical management system in all of its senior living communities. The long-term care provider has also added a pilot run with the 3M™ Clean-Trace™ Hygiene Monitoring and Management System, which helps quickly quantify and measure the microbial life potential present on a tested surface.

“In essence, the system can help you determine how effective your cleaning process currently is and whether potential changes may be necessary to improve the cleanliness of the facility,” said Garrett Charton, the CSD sales representative working with Trilogy. “3M’s Flow Control system is at least 55% more accurate on average at diluting chemical concentrates than the nearest competitive systems.”

For Trilogy, the 3M™ Flow Control System and Clean Trace system are part of a larger initiative – The Trilogy SHIELD Program – whose aim is to help keep employees, residents and communities safe through increased operational cleaning frequency and enhancements to environmental controls.

Parker added, “By focusing on the health and safety of our residents, the Trilogy SHIELD Program seeks to put minds at ease as we restore faith and confidence in senior living.”

At the heart of the program is Trilogy’s commitment to its customers to create a more safe and secure environment in every Trilogy community.

“We’re fortunate at Trilogy to have on-staff environmental teams, which allows for open, rapid and direct feedback to any changes that we make,” Parker commented. “With our transition to 3M products, feedback has been overwhelmingly positive with regard to the effectiveness and convenience of the technologies.”

3M has received EPA approval for two of its disinfecting products as being effective against SARS-CoV-2, the cause of COVID-19. Our  back to business playbook  can help you review and plan for an eventual return to work and provide your customers and employees the assurance of clean.   

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Logistics Middle East

Supply chain Case Study: 3M

Abid mehmood from 3m talks about his firm's supply chain operations..

Diversified Technology – company 3M has produced thousands of innovative products and solutions since its inception in 1902. So, Logistics Middle East magazine sat down with Abid Mehmood, the firm’s supply chain manager for the Gulf and North Africa, to find out the logistics details behind the company’s regional operations.

“Our logistic operations in the Gulf are managed by DHL, who is basically our 3PL partner, and we have been working with them for a number of years now,” says Mehmood.

“Initially, we started business with them in air freight in 1991 and then expanded into ocean freight. Approximately three years back, we started warehouse and distribution operations, as we wanted to implement a direct supply chain model; right from our suppliers to our customers.”

“DHL’s role is to handle the local distribution centre, the distribution of products within the UAE, and the export of goods to the GCC countries by sea, air and land freight. They also provide us value-added services like labeling and promotional packaging that are needed to support the local needs of the customers.”

We source our products from the US, Europe, Asia, and from a couple of local vendors, that make up over 50 suppliers worldwide.

SERVICE PROVIDERS

We have two service providers; CEVA for external needs and DHL for internal. CEVA, the external provider, picks up goods from international locations and delivers them to the Dubai port. DHL then takes over with clearing the goods and then storing them in the warehouse.

We have over 65,000 products worldwide that are part of our six business units including, Displays and Graphics; Electrical, and Communications; Health Care; Safety, Security and Protection Services; Industrial & Transportation; Consumer & Office. In this region we sell over 10,000 products with one third of them, constantly stored in the warehouse.

We are looking to establish a regional distribution centre that will allow us to cater to the GCC and Levant region. A bigger hub in Jebel Ali free zone is ideal in order to manage stock availability due to long shipment times. This will ensure we meet customers’ expectations. Being an innovation driven company we have over 25% products that are new to the market each year. Our core portfolio is the backbone to our business which is critical for our aggressive growth for the region.

Our warehouse is located in Jebel Ali south zone. The entire area of the DHL facility stores up 80,000 pallet positions, which gives us an opportunity to manage volume according to our customer and the market needs.

Border and custom checks pose difficulty at times. Rules and laws constantly change causing delays with shipments. We try to anticipate these changes to avoid complications and delays with pending shipments. With the increased focus on regulatory norms in the region, we need to be up to date with the requirements and ensure that our practices and documentation are in order and we do not have any penalties while delivering on time to customers. We have invested in Regulatory Affairs for the region to proactively manage the needs of the local countries and streamline the process.

The 3M supply chain in a nutshell

Within the supply chain, we have our customer service centre that addresses our customers’ needs, in addition to an operational department that manages documentation,transportation, inventory management and warehousing. Our function works hand in hand with the sales, marketing and finance departments of the different divisions to ensure alignment. We benchmark service providers to keep up to date with worldwide supply chain practices in order to remain competitive and meet and exceed demand customer expectations. We are pleased with our partnership with DHL, in facilities, messenger system and of stock management, which are critical aspects of logistics.

Supply chain Case Study: RHS Logistics

Supply Chain Case Study: Canon Middle East

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Strategy & Execution

3M: Rethinking Regionalisation to Adapt to Supply Chain Disruptions

3M: Rethinking Regionalisation to Adapt to Supply Chain Disruptions ^ SMU088

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Product Description

Publication Date: October 16, 2022

Industry: Healthcare sector

Source: Singapore Management University

Set in April 2022, this case delves into supply chain disruptions faced by 3M in and after the Covid-19 pandemic, and the strategies used by the company to cope with the challenges. The case begins by tracing the history of 3M as an 'Innovation Machine', and its internationalization strategy in its early years. It then talks about the company's regionalisation strategy, and complementary growth strategies like the 'Divide and Grow', 'Follow the Technology' and 'Renewal' tactics to expand and diversify internationally. It also talks about the digital transformation and the consolidated operating model, which the company embarked upon in 2019, to re-energise the company. In 2020, 3M faced massive supply chain disruptions amidst a 400% demand surge of N95 masks and personal protective equipment, and simultaneous closure of several manufacturing facilities worldwide. 3M continued to operate from manufacturing plants that were still open, with government support - in countries like Singapore - while facing resource and supply constraints and other uncertainties. To cope with the disruption, the company used several strategies like emergency response teams, 30/60/90-day cycles of supply management, additional supplier sourcing and airfreight for exporting finished goods. In 2022, even after the pandemic started to subside, supply chain disruptions continued to persist amidst increasing geopolitical tensions like the Russia-Ukraine war and a new surge of the pandemic in China. Given the prolonged and evolving supply chain disturbances, what could be the appropriate short-term and longer term strategies that 3M could implement to respond to such disruptions?

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Reporting by Kannaki Deka in Bengaluru; Editing by Arun Koyyur and Maju Samuel

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LATAM Brazil chief says airline could add smaller Embraer, Airbus planes

LATAM Airlines is weighing the possibility of adding smaller aircraft to its fleet such as Embraer's E2 and Airbus' A220, the firm's Brazil head said on Wednesday.