Executive Briefings

Opinion: Digitization and the 3M Supply Chain

Paul Keel, senior vice president of supply chain management at 3M, explains how 3M is working to improve its supply chain capabilities.

3M is a global company headquartered in St. Paul, Minnesota in the United States. This $30bn multinational runs a global supply chain that includes around 200 manufacturing plants, 100 warehouses, and 25 customer-facing divisions.

“For many years,” Keel said, “the world has thought in linear terms.” If we invested more in certain areas, we would get certain predictable returns. But in a competitive, global economy that is just not good enough anymore. “We are trying to shift from a linear to a geometric curve.” 3M has recently intensified their “digitization” efforts.

There are many opportunities. 3M can focus on equipment reliability, on plant optimization, on better synchronizing production across a group of plants, or on optimizing an end to end supply chain that includes upstream suppliers and downstream customers.

But whichever level 3M focuses on, Keel says there is a common theme: “Friction occurs at the connection points.” And part of that friction is due to a lack of “trust” across different internal and external groups. Digitization provides the information that allows different parties to get to a point where they can more efficiently work with each other. “I don’t mean ‘trust’ in the emotional sense. We all work very well together and ‘trust’ one another to do our very best. I mean ‘trust’ is the empirical sense. A statistical track record that our suppliers will perform as they promise us they will, and 3M in turn will perform as we promise our customers that we will. This is data. Digitization.”

Keel provided some examples of digitization at the connection points in different portions of their supply chain.

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3M is a global company headquartered in St. Paul, Minnesota in the United States. This $30bn multinational runs a global supply chain that includes around 200 manufacturing plants, 100 warehouses, and 25 customer-facing divisions.

“For many years,” Keel said, “the world has thought in linear terms.” If we invested more in certain areas, we would get certain predictable returns. But in a competitive, global economy that is just not good enough anymore. “We are trying to shift from a linear to a geometric curve.” 3M has recently intensified their “digitization” efforts.

There are many opportunities. 3M can focus on equipment reliability, on plant optimization, on better synchronizing production across a group of plants, or on optimizing an end to end supply chain that includes upstream suppliers and downstream customers.

But whichever level 3M focuses on, Keel says there is a common theme: “Friction occurs at the connection points.” And part of that friction is due to a lack of “trust” across different internal and external groups. Digitization provides the information that allows different parties to get to a point where they can more efficiently work with each other. “I don’t mean ‘trust’ in the emotional sense. We all work very well together and ‘trust’ one another to do our very best. I mean ‘trust’ is the empirical sense. A statistical track record that our suppliers will perform as they promise us they will, and 3M in turn will perform as we promise our customers that we will. This is data. Digitization.”

Keel provided some examples of digitization at the connection points in different portions of their supply chain.

Read Full Article