Minnesota Mining and Manufacturing Company (3M)

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3.2 Minnesota Mining and Manufacturing Company (3M)

3.2.1 Overview

The 3M Company, formerly known as the Minnesota Mining and Manufacturing Company, is an American publicly traded multinational conglomerate corporation based in St. Paul, Minnesota. It is the component in both Dow Jones Industrial Average Components and S&P 500 Components since 1976, which marks the company as among the top 30 best performing and most stable companies that are publicly traded in the United States. The 3M Company makes everything from tape to high-tech security gears. The diversified company makes products through five operating segments: Industrial; Safety and Graphics; Electronics and Energy; Health Care; and Consumer. Well-known brands include Post-it notes, Scotch tapes, Scotchgard fabric protectors, Scotch-Brite scouring pads, and Filtrete home air filters.

3M sells products directly to users and through numerous wholesalers, retailers, distributors, and dealers worldwide. With $30 billion in sales, 3M employs 88,000 people worldwide, produces more than 55,000 products, operates in more than 65 countries, sales its products through distributors and retailers in more than 196 countries, and parents 29 international companies with manufacturing operations and 35 companies with laboratories. (Wikipedia, 2014; Hoovers, 2014; 3M, 2014)

3M follows a business model based on "the ability to not only develop unique products, but also to manufacture them efficiently and consistently around the world (3M)". (Wikipedia, 2014)

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3.2.2 History and Significant Developments

Founded by five businessmen in 1902, the establishment of 3M Company was originally targeted to be a mining company in Minnesota for corundum, the second hardest mineral for the use of many industrial purposes. The company, however, failed to mine corundum at commercial value, thus pushed the company’s transformation into one of the world’s most successful company of all time.

(Wikipedia, 2014; Reference for Business, 2014; 3M, 2014)

Historically speaking, the company distinguished itself from ordinary manufacturing companies in many ways, most importantly, its innovative culture.

After the setback in its original mining business, the company found its future by leveraging its knowledge in hard minerals into researching and developing the industrial application of hard minerals. The company successfully launched its sandpaper products, and became financially stable by the year of 1916. Afterwards, the company, again, faced obstacles when its grinding wheel products was unable to achieve stable quality, affecting the marketing of the products. The top-level managers at the time began to support the innovative thinking of its workers into creating and developing new products in different fields. This incident marks the turning point for the company’s core competencies, and was the start point for 3M to become known as one of the most famous innovative company in the world. In less than 15 years after the company started encouraging the innovative culture, the company launched several well-known and extremely useful innovative products, such as Three-M-ite cloth, waterproof sandpaper, and Scotch brand tapes. (Wikipedia, 2014; Reference for Business, 2014; 3M, 2014)

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Until today, the 3M Company is still named by the American Institute of Management as one of the most successful and best managed companies in the United States. With operations in more than 190 countries and products interspersed across industries, 3M still distinguishes itself as an omnibearing company by willingly to invest and expand its businesses into such different expertise as electro-medical equipment, industrial systems, automobile related products, and so on. (Wikipedia, 2014; Reference for Business, 2014; 3M, 2014)

3.2.3 Agile Conducts Under Agility Strategy and Framework

3M’s culture of encouraging innovation led the company to become one of the most diversified and innovative companies in the world. 3M’s competitive environment is moderately dynamic but highly competitive. Thus, the bargaining power of its customers is high, and customers’ customization demand is also high. 3M solved the problem by implementing a standardized but flexible product design and manufacturing principle. 3M designs its products mainly on standardized articles owned and produced by itself. However, the combination of the constituent varies upon customers’ opinion injection. Furthermore, this product design thinking in turn allows 3M’s manufacturing to produce standardized base materials. After the base materials are produced, they are assembled or further processed according to the original design. This way, 3M is able to minimize the company’s operation by always producing the same base materials, but at the same time be flexible to market fluctuation by introducing different combinations to different markets.

Furthermore, in order to continuously support the company’s innovative core competence, the management level requires all units to work in collaboration to integrate and to trigger new thoughts and ideas. Also, in order to arouse innovative

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powers internally and to expand into different fields, 3M repeatedly purchase and merge those innovative companies.

The agility practices incorporated by 3M are primarily concerned with three factors: speed, flexibly, and efficiency:

Firstly, the organization design of 3M is gradually transforming into a project system organization, aiming to tighten linkages between departments and to encourage cooperativeness and flexibilities among each operational units in response to changes and uncertainties. Furthermore, 3M strongly emphasizes the establishment of internal communication to allow smooth and thoughtfully exchange of knowledge and ideas throughout the organization. Moreover, the utilization of work cells owned and operated by employees to motivate workers’ sense of responsibilities over their work and projects.

Secondly, the manufacturing part of 3M supports the idea of agility by incorporating several production principles. 3M created a form of concurrent manufacturing by grouping workers into small and flexible cells to promote the versatility in manufacturing. Furthermore, by implementing decentralized stocking principle, the storage areas are scattered on the production floor, near where the materials are needed. This principle promotes more efficiently management and greater control over the company’s inventory.

Lastly, 3M’s relationship with other firms is designed to promote its agility.

3M has strong and close cooperative relationship with its suppliers by outsourcing non-core activities so that 3M itself could completely focus on the development of its core competencies. On the other hand, unlike ordinary companies avoid contacting their competitors; 3M actually establish collaboration agreements with its potential

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competitors in the exploration of new markets. 3M believes that by cooperating with companies fighting for the same market, this is a much more efficient way to gain access to the target market. (Vazquez-Bustelo, 2006; Moore et al., 2007; 3M, 2014)