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The Innovation Mindset in Action: 3M Corporation

• Vijay Govindarajan and Srikanth Srinivas

How 3M has consistently powered itself through innovation.

In three recent blog posts we looked at the innovation mindset in individuals, profiling game changers Jerry Buss , Peter Jackson , and Shantha Ragunathan . These three innovators share common qualities, which we call the innovation mindset, a robust framework which can be applied at the micro (individual) as well as macro (organizational) levels: they see and act on opportunities , use “and” thinking to resolve tough dilemmas and break through compromises, and employ their resourcefulness to power through obstacles. Innovators maintain a laser focus on outcomes , avoid getting caught in the activity trap , and proactively “expand the pie” to make an impact. Regardless of where they start, innovators and innovative companies persist till they successfully change the game.

• VG Vijay Govindarajan is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth. He is coauthor of Reverse Innovation (HBR Press, 2012). Srikanth Srinivas is the Senior Vice President of Solution Innovation at Medecision and the author of  Shocking Velocity .

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The strategy that makes 3M an innovation powerhouse

Innovation is not a one-time story, but it is a process and a strategy, and no other organization reflects this process better than 3M (company that manufactures scotch brite). It is about an organization that went from a small and unprofitable Minnesota Mining and Manufacturing (where the three “M” come from) company in the early 1900s to becoming one of the most successful and revered product companies today.

3M bagged the US government’s highest award for innovation through its sheer and stellar innovative solutions, the National Medal of Technology. Its portfolio of nearly 60000 products includes Post-It notes, Scotch-Brite, ACE bandages, and many other innovative medical and industrial products.

Some stories of innovation strategy that show how 3M has time and again transformed failures into successes

Initially, 3M ventured to mine corundum, which they planned to use to make grinding wheels. Instead, what they found was a low-grade mineral called anorthosite. They did much experimentation, and the result was their first breakthrough product: Wetordry sandpaper. Discovering the poor-quality mineral could have caused an early end to any fledgling company, but it was 3M innovation strategy that transformed this failed venture into a success .

Another story is about Post-It Notes. Dr. Silver, an employee of 3M, had invented this new product, but he did not know what to do with it. He tried to promote his creation within 3M, but no one could think of using it. Art Fry, a Silver colleague at 3M, used to sing in his church choir. During one such program, he became frustrated when the bookmarks he used to mark his place in his hymnal kept falling out. He remembered Silver’s adhesive and tried some on his bookmarks. It worked wonderfully! The bookmarks stayed in place, and he could move and reattach them easily without harming any of the pages. The rest is history.

View this post on Instagram A post shared by 3M (@3m)

Scotchgard development is another success story of innovation. Patsy Sherman, a 3M researcher, was conducting experiments on fluorochemical polymer when one of the lab assistants accidentally spilled some of the mixtures on her shoes. She tried water, alcohol, soap but was unable to remove the spillage from her tennis shoes. From here, she got the idea that this substance could perhaps act as a stain protection barrier for other textiles.

This unparalleled success of 3M provokes us to ask: When several organizations struggle to even maintain and deliver values through a single product, how 3M has been successfully providing values through its more than 60000 odd products? The answer lies in understanding the innovation strategy of 3M.

Over time big organizations of the size of 3M siege to innovate. Organizations that pursue growth based on innovations are subject to an innovation paradox: do we manage today or tomorrow? 3M has been able to find the answer to this paradox. So, what are they doing, and how are they doing this?

Over the years, 3M has developed a robust and rich organizational culture and structure that promotes, encourages, and facilitates innovation. Let us have a walk-through of some of their approach to business growth and success.

Varied Platform to foster Innovation:

3M’s strategy is to provide a wide variety of Innovation centers and Technical forums to create a pool of practical, novel, and worthful ideas that are then nurtured into opportunities. Field visits by Scientists to observe customers to understand their pain points are very common at 3M.

Customers are also encouraged to visit Innovation Centers set up specifically to generate new ideas, explore possibilities, and solve problems. These platforms facilitate building a network among scientists, employees, and customers where they freely exchange their ideas and future projects.

Dedicated time for innovation:

In 1948, 3M launched its “15% rule” program, where 15 percent of employees’ time was dedicated to innovation. The Post-It note was invented during 15 percent time. Not only Post-It, many of the products from nearly 118,000 patented products of 3M result from this 15% rule program. Organizations such as Hewlett-Packard and Google have both replicated this approach. Gmail and Google Earth were originated during Google’s 20 percent time . 

Technology and innovation are at the heart of 3M – the company has been granted more than 118,000 patents, and each year, more than 4,000 new patents are issued to 3M worldwide. 3M

30/4 rule to increase innovation speed:

3M has set up this rule which states that 30 percent of the company’s profit should come from products introduced in the last four years. This rule has been developed to provide the speed at which innovation takes place in 3M.

These kinds of initiatives are not so simple as they sound. It requires actual work on the ground and a bird’s eye view of the inner and outer organization’s environment, and 3M has mastered it with time.

Virtuous cycle through Innovation:

Innovation powers the new product development at 3M, which increases market share through customer acquisition leading to improved profit, which again encourages new product development innovation.

3M invests more than USD 1 billion in R&D every year, which is around 6% of its revenue. This unprecedented expense on R&D is above the industry average and a cornerstone of 3M’s product development efforts.

Commitment to Science and Sustainability:

3M has been very serious about science, which is the foundation of its existence. But it is equally considerate towards climate change and sustainability. 3M has announced to make its entire operations carbon neutral by 2050.

Such early commitments to climate change allow organizations to prepare themselves for new technological adoption. It has planned to invest nearly 1 billion USD over the next 20 years on the ESG front. Following a path of resource efficiency would improve the bottom line of 3M and give it an edge over its competitors in the world, where resources are becoming scarce with the passing of days.

3M has consistently been regarded as an entrepreneurial organization both within scholarly and business communities. Undoubtedly, 3M’s core competency is its entrepreneurial corporate culture.

Over the years, 3M has transformed this philosophy into an organizational capital with tolerance for failure, regard for success, and encouragement for every idea, even if it looks like a foolish one. It has institutionalized knowledge from the learnings of past failures and collaborations of its employees and resources.

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I am pursuing MBA from IIM Lucknow and I passionately read and write about brands. I continuously learn, refine, and drive myself to be a better person and professional. I really enjoy listening to and sharing new perspectives.

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3M: Rethinking Regionalisation to Adapt to Supply Chain Disruptions

By: Steven M. Miller, Lipika Bhattacharya

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…

• Length: 27 page(s)
• Publication Date: Oct 16, 2022
• Discipline: Strategy
• Product #: SMU088-PDF-ENG

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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?

Learning Objectives

The case helps students analyse (1) entrepreneurial culture in a large organisation (2) functional strategies to promote innovation (3) regionalisation and globalisation - its impact on company strategy (4) impact of supply chain disruptions - Bullwhip effect, and critical strategies to avoid obstruction of business.

Oct 16, 2022

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SMU088-PDF-ENG

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3M: Profile of an Innovating Company

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3M: Innovation, ideas and solutions for a modern world

Innovation, ideas and solutions for a modern world.

This Case Study investigates how 3M has developed a culture of innovation that drives new product development throughout its global operations.  It examines the process of innovation at 3M and investigates how the company’s workplace culture and management strategies encourage and support staff to be active members of its entrepreneurial culture.

As a result of reading this Case Study students should be able to:

• Discuss the role and importance of innovation and product development at 3M
• Describe how 3M supports a culture of innovation.
• Evaluate the success of 3Ms entrepreneurial culture including the relationship between 3M Australia and DFAT

Introduction

3M is a global diversified materials science company and a powerful, diverse and integrated enterprise.

What is innovation?

3M prides itself on being a customer-focused organisation.

Developing a culture of innovation

One of the most celebrated aspects of 3M’s entrepreneurial workplace culture is the 15 percent rule that encourages employees to explore and work together to generate ideas.

Creating innovative applications

The Australian passport is the most widely held identity document used in the Australian community.

3M has emerged as a global leader in providing practical solutions and is home to some of the world’s most recognisable brands.  

To download this case study as a free pdf, click the button below:

3M is a global diversified materials science company and a powerful, diverse and integrated enterprise. Although 3M identifies its core competency simply as “applying coatings to backings”, the company’s operations extend far beyond this. 3M, famous for its consumer brands such as Scotch® Tape and Post-it® Notes , also creates thousands of industrial products used by manufacturers and service providers to create their own products.

From its beginnings in 1902 as Minnesota Mining and Manufacturing, 3M has grown to achieve sales revenue of $US25.3 billion and an operating income of $US3.5 billion in 2008. The company has over 79,000 employees with approximately 13 percent employed directly as technical staff. As a truly global presence, 3M services almost 200 national markets, and operates subsidiary companies, such as 3M Australia, in more than 60 countries. Almost 64 percent of 3M’s entire sales revenue originates from international operationsWith a vision “to be the most innovative enterprise and preferred supplier in the markets we serve”, 3M prides itself on its history of innovation – reinforced through its brand promise, “practical and ingenious solutions that help customers succeed”. Key values underpinning 3M’s continual success include its commitment to: • Satisfy our customers with superior quality and value • Provide investors with an attractive return through sustained, high quality growth • Respect our social and physical environments • Be a company employees are proud to be part of. 3M has 45 core technology platforms ranging from adhesives, biotechnology and films through to nanotechnology, optoelectronics and wound management. The 60,000 products developed through these technology platforms satisfy consumer needs in six marketfocused businesses.New product development and innovation are the cornerstones of 3M’s continued success. According to the Australian Bureau of Statistics, innovation is: “The process of introducing new or significantly improved goods or services and/or implementing new or significantly improved processes”. 3M celebrates its long history of innovation by turning innovators into company legends. In 1925, Dick Drew famously visited a customer’s auto production plant and discovered that the growing demand for two-tone cars meant that workers needed a solution to create cleaner paint lines. After some research, and testing, a new product – masking tape – was born. Product development occurs when investment in research and development leads to new and innovative products. This usually involves phases such as idea generation, testing, engineering, prototype creation, commercialisation, manufacturing and marketing. It can take many years for a product to reach the market and product development also represents significant capital investment; hence 3M uses the term, ‘patient money’.

3M adds 500 innovative new products every year to its 60,000+ productline. Many of these products are ground-breaking, newly-invented products, unique in the marketplace and protected by patents.

3M's six businesses

• Consumer and Office: Adhesives and wovens such as Scotch® brand, Scotch-Brite® , Post-it ® and more.
• Display and Graphics: Films for electronic displays, touch screens, reflective materials for highway safety and more.
• Electro and Communications: Electrical tapes, copper and fibre-optic cabling and more.
• Health Care: Medical, surgical, pharmaceutical and dental products and more.
• Industrial and Transportation: Abrasives, specialty adhesives and tapes, as well as automotive, aerospace and marine industrial products and more.
• Safety, Security and Protection Services: Respiratory protection systems, anti-counterfeiting security films, cleaning products and more.

3M prides itself on being a customer-focused organisation. “We understand our customers’ expectations and make sure that we exceed their expectations…Loyal customers stay with you, are more receptive to new products and recommend you to others.”

The customer-focused organisation is an important part of continuous improvement and Total Quality Management (TQM). A TQM organisation consists of a number of interdependent internal stakeholders or customers. These individuals, groups, departments and units supply to, and rely on, another individual, group, department or unit within that same organisation. These internal customers combine to improve quality throughout all processes and create better quality output for the end-users; the external customers. This philosophy of 3M applies equally to internal customers, demonstrated through the interdependence of its 45 technology platforms and diverse global operations; as well as to external customers.

Each of the three broad categories of innovation applies to 3M.

1. Innovation in goods and services occurs when new and improved goods and services are developed or where new uses are found for existing goods or services. 2. Innovation in operational processes occurs when organisations implement significant positive change in their methods of production of goods and/or services. 3M describes the four fundamental reasons driving innovation as; personal satisfaction, competitiveness, growth and survival. New products are the lifeblood of 3M and the company builds innovation into all of its operations. 3M’s innovation is the deliberate product, “…of a complex set of principles and practices which support and encourage the coupling of technology and creativity to satisfy customer needs.” It is also no accident that 3M, a company driven by cuttingedge technological innovation, believes that successful innovation is in reality accomplished by its people. 3M’s senior management empowers employees to work with determination and imagination to create innovative solutions. Customers are consulted so that they can provide input and feedback to the process of innovation and product development. This commitment to inclusive leadership resulted in 3M ranking No. 1 on Chief Executive magazine’s 2008’s Best Companies for Leaders list. A further strength of 3M’s organisational structure is that 3,000 of their 10,000+ technical employees are located outside the USA. These technical employees work in research-based laboratories in 34 countries or in Customer Technology Centres in 30 countries. The result is a highly-skilled global workforce uniquely positioned to create proactive solutions in response to specific customer needs. This localisation of innovation is demonstrated through 3M’s diverse research and development centres; optical manufacture and testing in Poland, electronics in Japan, water filtration in India and dental products in the UK and other markets. 3M provide locally-based product development resulting in customised solutions that subsequently result in global replication through the entire company.

To support innovation, 3M allocates 6-7 percent of its entire sales revenue ($1.4b in 2008) to research and development. This heavy investment also means that staff can devote 15 percent of their work time to self-directed projects. It is no surprise that the company was ranked World’s 4th Best R&D Company in 2007.

One of the most celebrated aspects of 3M’s entrepreneurial workplace culture is the 15 percent rule that encourages employees to explore and work together to generate ideas. Product development is driven by the cross-fertilisation of ideas and new technologies shared across the entire company. “Products belong to divisions, but technologies and ideas belong to the company.” 3M has developed six principles of innovation to support this culture.

Build a Vision Effective leadership means that employees understand the importance of achieving 3M’s vision. Innovation is a cornerstone of 3M’s self-image and the company prides itself on a culture of success stories by celebrating the achievement of its people. The importance of innovation is communicated and reinforced which replicates success. Foresight It is vital to, “…anticipate the structure of the future before it arrives.” 3M can solve articulated needs, whereby the customer knows and communicates what they need; as well as unarticulated needs, whereby 3M proactively provides a solution for a problem that the customers don’t yet realise they have! Going beyond 3M sets goals to challenge their people to strive for significant improvements. One objective is to generate 30 percent of all sales from new products introduced in the past four years. However 3M’s commitment to stretching goals is demonstrated through an additional objective; to cut the time for new products to reach the market by a further 50 percent. Empowerment Back in the 1940s McKnight said, “Hire good people and leave them alone”, and this philosophy is still paramount. 3M’s management believes that employees need freedom to achieve their goals. Empowered employees are given both responsibility and accountability for key tasks. The company trusts employees, provides direction, support and resources, with minimal interference. This collaborative management style is effective when dealing with intrinsically motivated and highly-qualified professionals. Communication 3M feels that successful people need to work with others. Management communicates the vision, employees communicate opportunities to management – the dialogue extends into multiple channels throughout the organisation. 3M use technical forums, trade fairs and conferences to encourage networking and ideas sharing. Staff use part of their 15 percent self-managed time to help people from other areas. Networking occurs internally across platforms and externally through customer feedback and joint ventures. Staff can be transferred locally and globally and apply their particular expertise on projects. This adds value by sharing both expertise and the experience of 3M’s diverse global culture. Rewards and recognition 3M believes that the most effective type of reward is recognition through technical and corporate awards and promotions. 3M’s celebrated Innovator Award is given to individuals who use their 15 percent self-directed work time to develop a new product or technology. The highly prestigious Circle of Technical Excellence honours extra effort, motivation and creativity. 3M have a dual career structure that maintains parity between technical and corporate staff. Outstanding technical employees can be promoted into positions such as Corporate Scientist or they can move into management with the same opportunities for salary, benefits and otherprivileges. This encourages topperformers to stay with the company.

The Australian passport is the most widely held identity document used in the Australian community. Over many decades the Australian Government, through the Department of Foreign Affairs and Trade (DFAT) has built a reputation for producing high quality, innovative passports that are recognised as being amongst the most secure in the world.

Since the early 1980s 3M has worked collaboratively with DFAT to deliver a series of unique laminates that secure the data page against fraudulent alteration. The data page contains the holder’s personal details, signature and facial image. To manufacture security laminates, 3M leverages a range of core technologies and processes including adhesives, vapour coat processing, optics, moulding and specialty materials. In the early 1980s, the practice was to adhere a photograph of the passport holder to the data page and cover it with a security laminate. While best practice at the time, it was open to the risk of fraudulent photo substitution. DFAT, in partnership with 3M, innovatively applied advances in digital printing technology to issue a passport with a colour facial image and signature digitally printed into the passport, a world first in passports. This evolution occurred over three phases, Dawn I, Dawn II and Dawn III. Dawn I was designed to create a passport with a laser printed machine readable zone (MRZ) and was successfully introduced in 1985. It was the first passport in the world to achieve 100 percent reading accuracy in the MRZ and set a new standard. A patent was lodged on behalf of the Australian government to cover what became known as ‘reverse imaging technology’ and 3M were engaged to commercialise the technology. Dawn II used the reverse imaging technology to directly image a black and white photograph into the reverse side of the laminate, a world first for DFAT and 3M. Dawn III built on the technology developed in the preceding phases of the project and culminated in the first passport with the holder’s facial image and signature digitally printed in full colour being issued on the 4th May 1994. The 3M laminate also contained new covert security features including images of the Australian Coat of Arms, which were visible under coaxial light, and three stylised kangaroos securing the signature label and a corner of the facial image. These innovations were another world first for DFAT and 3M and significantly reduced the security risk of photo substitution and data alteration. In 2003, the next generation of 3M laminate allowed DFAT to add the first ‘floating image technology’ seen on passports. Lasers were used during manufacture to create images of kangaroos and emus within the laminate that appear to ‘float’ above and sink below the surface as the page is viewed from different angles. In 2009, the 3M laminate was redesigned and enhanced to incorporate a continuous Australian wave pattern visible only under UV light. Today, this is one of the key features used by border control authorities to validate the integrity of the passport.

3M has emerged as a global leader in providing practical solutions and is home to some of the world’s most recognisable brands.

Although a technologically-oriented company, 3M feels that its success stems from the quality of its people. 3M has a diverse global workforce of naturally inquisitive and highly-trained technical specialists that is supported throughout the entire corporation by a progressive and people-centred management philosophy. 3M delights both in reinforcing the principles laid down by some of its key early executives and also celebrating the ongoing success of its current staff. With a continual emphasis on innovation and product development 3M is committed to finding solutions for its diverse group of customers. Management is also committed to encouraging and supporting staff in their pursuit of excellence. The company attributes much of its success to the 15 percent rule which allows staff to search for proactive solutions for difficult problems. For a company whose core competency might be described as ‘making things stick’, 3M has developed an innovative entrepreneurial workplace culture that its stakeholders seem more than happy to be stuck with.

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Six Sigma in Action: A Case Study at 3M

Introduction to 3m.

3M is the world’s 3 rd most innovative technology company that strives to create groundbreaking products. The goal of 3M is simple – create products that make positive differences in everyone’s lives. Six Sigma specializes management strategy method that has evolved and modernized since its origin in 1986. It focuses on proactively deterring issues that will arise in production and corporate operations. Like many companies have begun to do, 3M acquired the Six Sigma management strategy and has revolutionized its infrastructure. The “World’s Most Ethical Company” is now a leading innovator in technology, energy, and more due to the success of the method. Now, 3M offers an in-depth case study to show exactly how Six Sigma transformed their company.

Implementing Six Sigma

Gaining control of 3M in 2001, James McNerney placed the Six Sigma methodology into the backbone of the company. McNerney’s unique, considerate approach led to a four-year overhaul of the manufacturing and production processes. From eliminating waste to improving productivity, this methodology grew revenue faster than ever and continues to lead innovative technologies.

McNerney grew 3M other enterprises such as Global Souring, 3m Acceleration, eProductivity, and Indirect Cost Control. As a result, 3M began 2005 with over 30,000 employees Six Sigma certified, with a minimum Green Belt training for all technical and sales staff. Combining the Six Sigma methodology with a strong leadership, 3M consistently practices an ever-improving production process with increasing profits to match.

In addition to substantial revenue growth, this methodology continues to bring out massive savings and benefits. The 2003 Annual Report states that operating income was amplified by more than $500,000 in 2002 alone as a result of the Six Sigma initiatives. This figure is substantially larger than earlier predictions, and the forecast continues to remain high for the following year, sitting at $400,000, an estimate which was successfully met as reported by the Prudential Financial Conference in September 2004.

The Results

Alongside considerable financial growth, 3M enjoys significant corporate network growth. 3M’s network continues to expand by collaborating with numerous companies on over 250 projects such as Ford, Estee Lauder, Motorola, Wal-Mart, and Procter & Gamble. Mature, effective Six Sigma programs are easily spotted, sharing their knowledge with customers, suppliers, and other important personnel. Only Six Sigma has the tools necessary to transforming your business, with total process improvements and reducing defects. Six Sigma drives growth, reduces costs, increases revenue, and produces strong business relationships with customers that last a lifetime.

SixSigma.us offers both Live Virtual classes as well as Online Self-Paced training. Most option includes access to the same great Master Black Belt instructors that teach our World Class in-person sessions. Sign-up today!

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• Robert E. Richards 3  

Part of the book series: Sagamore Army Materials Research Conference Proceedings ((PHAE,volume 26))

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Historically, 3M has worked to maintain a quality image in its world-wide markets. Changing competition, raw materials evolutions, and the economic pressures of the late 1970s brought new recognition to the significance of quality as a key competitive factor. The new quality emphasis required a reworking of not only the techniques and priorities of quality management, but also a revitalizing of the quality commitment of senior management, and the development of a process for building organizational quality continuously.

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P. B. Crosby, Quality is Free, McGraw-Hill Book Company, ISBN 0-07-014512-1.

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Quality Training Program - QTP-1, 3M Company Education and Training, (1980).

Douglas N. Anderson, The Quality Evolution, 3M Company Publication.

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Richards, R.E. (1986). A Total Quality Program 3M Case Studies. In: McCauley, J.W., Weiss, V. (eds) Materials Characterization for Systems Performance and Reliability. Sagamore Army Materials Research Conference Proceedings, vol 26. Springer, Boston, MA. https://doi.org/10.1007/978-1-4613-2119-4_25

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Case study: How 3M uses predictive analytics

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A truly modernized compliance department not only manages vast amounts of data, but also leverages that data in a proactive way—watching the road ahead, driving insight, and teaming with the business and the board to more efficiently and effectively reduce risks. Global conglomerate 3M is one such company on that journey right now.

ABOUT MICHAEL DURAN

Michael Duran is Vice President and Chief Ethics & Compliance Officer for 3M, where he leads 3M’s global ethics & compliance program driving innovations and enhancements to our program to mitigate, identify and address risk and build upon 3M’s strong ethical culture of Be 3M.

Michael was appointed to this role in June of 2019 after serving as Assistant General Counsel and Compliance Director for 3M, where he led the team that designed and implemented many of the global elements of 3M’s compliance program. His team was also responsible for managing all six successful applications for Ethisphere’s “World’s Most Ethical Companies” recognition program.

Michael joined 3M in December of 2011. From 2006 to 2011, Michael helped design and implement enterprise-wide compliance controls for Marsh & McLennan Companies. From 1998 to 2006, Michael held various financial and compliance roles at multiple General Electric businesses. Michael has a B.S. in Finance from DePaul University, a J.D. from the University of Illinois, and a M.B.A. in Finance from the Kelly School of Business at Indiana University. He is admitted to the Illinois, Nevada, and the Minnesota bar.

Implementing a modernized compliance department at a company the size of 3M is no easy task. After all, we’re talking about a company that made $32.8 billion of revenue in 2018, operates in 70 countries, and has roughly 90,000 employees globally. Founded in 1902, however, you might say the global powerhouse knows a little bit about changing with the times.

At NAVEX Global’s 2019 Ethics and Compliance Virtual Conference, 3M Chief Ethics and Compliance Officer Michael Duran shared lessons learned on the company’s journey toward predictive analytics, evolving from a labor-intensive collection and metrics-reporting system to the adoption of automated dashboards and scorecards.

Functionally, the business is organized into four diverse business groups: safety and industrial; transportation and electronics; healthcare; and consumer. Each one creates a very different, unique risk profile and different types of compliance risk, Duran said. “We have to be dynamic in how we address these types of risk.”

When Duran joined 3M eight years ago, the company at that time was in what he referred to as an “activity-based reporting” phase, meeting on a quarterly basis with key stakeholders, including the audit committee of the board and the business conduct committee, made up of senior executives and business leaders. At these meetings, stakeholders would be provided with basic metrics concerning current compliance initiatives and program highlights—for example, the number of employees who completed online training courses or the number of people who completed the annual conduct certification course.

These key stakeholders were also briefed on third-party risk and provided with information about the third-party risk management program. “We have a pretty robust third-party due diligence program, and we’ve internally built the workflow to support that,” Duran said. “We’ve centralized the use of it into our workflow system, where we get a great deal of data out of it.”

The data generated from this internal workflow system is what’s provided to the business stakeholders. This data includes, for example, the number of third parties who have gone through the due diligence program; how many are at each risk level; and what the status is of any mitigation plan. 3M risk-ranks all its third parties, with some requiring enhanced due diligence, Moran explained.

Also, at this basic activity-based reporting stage, stakeholders were provided data from 3M’s global case management system generated from its hotline reports. The type of data reported includes the number of hotline calls, the type of reports being made, the substantiation rate of these reports, and the number of employees who have decided to remain anonymous.

All these examples of activity-based reporting mentioned above marked “the start of our use of data,” Duran said. It opened the dialogue to what eventually evolved into the next stage of maturity, the “business insight and influence” phase, he said.

Business insight and influence

As 3M evolved, different stakeholders and partnerships were folded in to help develop, enhance, and deploy the compliance program, Duran said. Within 3M, its four core business groups have lots of business divisions underneath them, and each of those divisions are associated with different products or operations.

Thus, compliance ambassadors play a very important role in helping to design and deploy the compliance program globally. Duran described these individuals as “stewards of our program” who are separate and distinct from 3M’s regional compliance officers. These compliance contacts have “insight and influence” in their country’s operations and are typically nominated by a business division head or leader within each country’s operations, he said.

With these folks, 3M holds monthly calls reporting to them similar metrics as it does with the board but slightly modified to be more relevant to them. He cited the following questions as examples: “‘Here is an initiative we are doing. What will be the receptiveness within your region? What will be the challenges? What are your observations locally? How can we make enhancements to the overall program?’”

That would lead to some seeking additional information to delve deeper into the data. “Honestly, we welcome that, because that, to me, shows engagement,” Duran said.

As one way to progress and start to influence change behavior, scorecards were then created in which certain parties were measured against, using a color-coding system of green, yellow, and red. 3M’s country operations and divisional operations were then given this scorecard.

“This was a large undertaking,” Duran explained. “We were getting data from multiple, different sources.” These sources included 3M’s online training platform, its case management system, its third-party due diligence platform, its HR system, and its annual certification system.

As just one example, 3M requires annual third-party certification. If certification was done on time, they scored in the green. If they did it late, they scored in the yellow. If it still hadn’t been completed in an allotted amount of time, they were in the red.

Additionally, company leaders could see how they measured up against their peers. Each country’s operations were also measured, meaning that all the countries in the APAC region, for example, would be measured against each other.

“When you’re measuring business leaders in each country, when you’re color-coding them, they consider it a reflection upon them, so it’s a great influencing tool,” Duran said. If someone was in the red, for example, the business leader would say, “Give me the list of people who have not done this. I’m going to make sure they get it done.” Duran added, “We found this to be a very effective tool to help drive our program and drive engagement, as well.”

“What we’re looking for is how effectively our compliance program has been deployed.” Michael Duran, Chief Ethics and Compliance Officer, 3M

Process optimization phase

The next phase in 3M’s data analytics maturity journey was the hiring of a data scientist. “Because we were sitting on so much data, we thought it would be helpful to hire someone with data expertise,” Duran said. “This was a big evolution in our program.”

It first required a steep learning curve for the data scientist. “We wanted this individual to learn and understand 3M,” Duran explained. This individual needed to be educated on where data was sourced; how the data correlated to 3M’s business operations; and the compliance reasoning behind why putting metrics around the data was important.

By hiring this data scientist, 3M was effectively able to automate its data-gathering exercise from one that used to involve a labor-intensive, manual process of gathering the data, putting it all into an Excel spreadsheet, creating a PowerPoint slide, and then sending it out to the business leaders for them to validate. “An exercise that took a month was cut by half,” Duran said. “So, the value benefit we got was simplification of our processes.”

For some companies, making the business case for hiring a data scientist can pose a challenge, but for 3M the hire came at an opportune time, just as a position within its compliance function had become available. That’s when compliance decided to do some reshuffling of its team to fill that position with someone who had a data science background, Duran said.

Predictive and strategic analytics

The final phase of 3M’s journey is the predictive and strategic analysis stage. “Understanding the data first and foremost is important,” Duran said.

Because concerns about conflicts of interest are a frequently raised issue, analyzing 3M’s conflict-of-interest data is “one of the first big projects we gave our data scientist,” Duran said. The first stage of this process has involved the collation of all the data from 3M’s conflicts of interest disclosure platform, HR data, its case management system, as well as external benchmarking data and then analyzing how the data correlates with substantiated conflicts of interest investigations. Duran explained 3M is using the findings to help prioritize how to address—and, furthermore, get ahead of—conflict of interest matters, as well as where compliance needs to spend more time on education and training.

In terms of compliance using the data in a more predictive and strategic way, 3M also does compliance evaluations, which Duran described as “audit-like exercises, where we visit our various operations.” A select number of these visits, which span one to two weeks, are made each year to certain regions. The data helps prioritize where to do these evaluations.

“We partner with internal audit to do books and records testing,” Duran said. “What we’re looking for is how effectively our compliance program has been deployed.” More time can now be spent analyzing the data and more clearly seeing where there may be broader trends or trouble spots in certain countries or regions that need more attention, he said.

In this way, the business is also able to provide more thoughtful analysis to the board to show them what is driving certain trends. “That’s where we’re going with the data,” Duran said. “We’re explaining to them what we are doing with the data and how it is driving the direction of our program, and they’re giving us feedback as well. They’re expecting us to continue to evolve and improve. Like all of us, we are on a continuous evolution and journey with the data. We look forward to the next direction we go.”

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Pollution prevention at the 3M corporation: Case study insights into organizational incentives, resources, and strategies

Research output : Contribution to journal › Article › peer-review

3M initiated its "Pollution Prevention Pays" (3P) program in 1975 and is probably the U.S. corporation which has been most identified with using preventive strategies to reduce toxic releases. This case study draws on interviews conducted with representatives of 3M manufacturing plants and corporate staff to provide both an overview of 3M's pollution prevention efforts and explore the organizational dimensions of two types of pollution prevention projects. The analysis addresses two key questions: (1) what do 3M's accomplishments indicate about the potential for pollution prevention approaches? and (2) what are the organizational incentives, resources and strategies which underpin 3M's pollution prevention efforts?

ASJC Scopus subject areas

• Waste Management and Disposal

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• https://doi.org/10.1016/0956-053X(96)00047-5

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• Link to the citations in Scopus

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• pollution prevention Earth & Environmental Sciences 100%
• incentive Earth & Environmental Sciences 78%
• resource Earth & Environmental Sciences 45%
• manufacturing Earth & Environmental Sciences 13%
• program Earth & Environmental Sciences 8%
• project Earth & Environmental Sciences 8%
• analysis Earth & Environmental Sciences 4%

T1 - Pollution prevention at the 3M corporation

T2 - Case study insights into organizational incentives, resources, and strategies

AU - Ochsner, Michele

AU - Chess, Caron

AU - Greenberg, Michael

N1 - Funding Information: RECEIVED 7 FEBRUARY 1996; ACCEPTED 14 MAY 1996. Acknowledgements--Research for this project was supported wholly through funding from the Hazardous Substance Management Research Center, an Advanced Technology Center of the New Jersey Commission on Science and Technology and a National Science Foundation Industry/University Cooperative Research Center. The authors would also like to acknowledge the contribution of 3M personnel at the Cordova (IL) facility and at the division and corporate level who made themselves available for lengthy, and in some cases multiple, interviews.

N2 - 3M initiated its "Pollution Prevention Pays" (3P) program in 1975 and is probably the U.S. corporation which has been most identified with using preventive strategies to reduce toxic releases. This case study draws on interviews conducted with representatives of 3M manufacturing plants and corporate staff to provide both an overview of 3M's pollution prevention efforts and explore the organizational dimensions of two types of pollution prevention projects. The analysis addresses two key questions: (1) what do 3M's accomplishments indicate about the potential for pollution prevention approaches? and (2) what are the organizational incentives, resources and strategies which underpin 3M's pollution prevention efforts?

AB - 3M initiated its "Pollution Prevention Pays" (3P) program in 1975 and is probably the U.S. corporation which has been most identified with using preventive strategies to reduce toxic releases. This case study draws on interviews conducted with representatives of 3M manufacturing plants and corporate staff to provide both an overview of 3M's pollution prevention efforts and explore the organizational dimensions of two types of pollution prevention projects. The analysis addresses two key questions: (1) what do 3M's accomplishments indicate about the potential for pollution prevention approaches? and (2) what are the organizational incentives, resources and strategies which underpin 3M's pollution prevention efforts?

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JO - Waste Management

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Home > Learn More About Six Sigma Green Belt > Six Sigma Implementation: 3M Story in 2024 [Updated]

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Table of Contents

“We can’t solve problems by using the same kind of thinking we used when we created them”. Albert Einstein

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” – Charles Darwin

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Six Sigma implementation consist of both the qualitative and quantitative change in an organization relies on the same  thought of this timeless world icon’s philosophy.

It implies the human species to continuously change and change for better and strive to relentlessly evolve for higher,better, stronger self. Six Sigma implementation strategy was originally developed by Motorola in 1986  by  Jack Welch who made it a central focus of his business strategy at General Electric in 1995.

Over the time it has been emulated by many industries experts and today it is widely used in many sectors of industry. Six Sigma aims to improve the quality of process outputs. This is done by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. 

It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization e.g”Black Belts”, “Green Belts”, etc. who are experts in these methods. They propagate and practice the Six Sigma philosophy daily in an organization to produce zero defect product/services to delight the consumers eventually. 

 Each Six Sigma implementation project carried out within an organization follows a defined and well documented sequence of steps to achieve quantified financial targets e.g.cost reduction and/or profit increase.

What is Six Sigma?

Top of the head if Six Sigma be defined as a ;  statistical term that measures how far a given process ( to develop and deliver the product/services) deviates from perfection in bringing the ultimate joy to the customer. 

The core concept behind Six Sigma is that if you can measure the ‘defects’ you have in a process. This can help you to systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible.

How does Six Sigma work?

The Six Sigma work on consciously applying the core principles e.g.

• Always focus on the customer.
• Understand how work really happens.
• Make your processes flow smoothly.
• Reduce waste and concentrate on value.
• Stop defects through removing variation.
• Get buy-in from the team through collaboration.
• Make your efforts systematic and scientific.

What is the mathematics (or rather logic) of Six Sigma?

The probing into the generic name of Six Sigma or rather how the baptized name of Six Sigma arrived will spell bound even the mathematicians.

The word Six Sigma stands for 6 standard deviations (6σ) between average and acceptable limits. LSL and USL stand for “Lower Specification Limit” and “Upper Specification Limit” respectively. The optimum mean lies somewhere in between these two limits.

However the million $ question is Why is Six Sigma, not seven sigma or may be five sigma? 

Six sigma is 3.4 defects per million opportunities. … The cost of defects are more at 5 sigma and the cost of reaching 7 sigma level is more than the savings( between the LSL and the USL) 

In case of five sigma the number of defects are 233 per million opportunity. Similarly, for 7 sigma it is 0.02 defects per million opportunity. The cost of defects are more at 5 sigma and the cost of reaching 7 sigma level is more than the savings.

However a perfect relation between cost and savings is stuck at six sigma level, so the methodology is named as six sigma.( Eureka!)

Six sigma is 3.4 defects per million opportunities.(the ideal number)

It is the magic number or rather the magic of Mathematics.( OH MY GOD! )

How is Six Sigma implemented in an organization?

Six Sigma is defined or implemented through applying DMAIC. DMAIC is an acronym for five interconnected phases: Define, Measure, Analyze, Improve, and Control.

• D stands for Define.(Define project boundaries ­ the stop and start of the process)
• M stands for measure (Measure the performance of the Core Business Process involved.)
• A stands for Analyse (Analyze the data collected and process map to determine the root causes of defects and opportunities for improvement.
• I stand for Improvement (Identify gaps between current performance and goal performance)
• C stands for Control.(Control the improvements to keep the process on the new course.)

The DMAIC denotes the parameters,rather the goal post of Six Sigma. It is then signified through data collection and data analysis and then into their individual goal setting for improvement to enhance the product/service capabilities of an organization. 

In other words, the goal is to produce nearly perfect products/services for the customers’ delight. With the help of statistical models, Six Sigma practitioners will methodically improve a company’s manufacturing process until they reach the level of Six Sigma.

Advantages and Disadvantages of Six Sigma

Six Sigma is customer-driven quality- control program that is most commonly associated with different companies who adopt the system with varying results refer to the product they are making and its customer requirement in manufacturing.

After the success of Six Sigma implementation in various 500 fortune companies of the USA, many companies worldwide implemented the Six Sigma principle as an ideal for ensuring the quality of their product/services.

Six Sigma implementation in some of the companies are:

• BAE Systems.

Bank of America

Becton Dickinson.

However the Six Sigma principle was accepted as ideal for ensuring the quality of their products, the debate also grew that other businesses may find the Six Sigma system too rigid or otherwise impractical for their particular situations.

Six Sigma implementation approach follows the DMAIC application process and will ensure 

• Reduce rework
• Reduce high inventory levels
• Improve delivery performance

Reduce non-value added activities

Produce more competitively priced products

Gain more satisfied customers

• Win more business!

THE 3M STORY 

The 3M Company, was formerly known as the Minnesota Mining and Manufacturing Company. This is an American multinational conglomerate corporation which is based in Maplewood, Minnesota.

The company reported an overwhelming data of $30 billion in sales. It employs 84,000 people worldwide and produces over 55,000 products. This includes adhesives, abrasives, laminates, passive fire protection, dental products, electronic materials, medical products, car-care products, electronic circuits, and optical films.

3M has operations in more than 65 countries—29 international companies with manufacturing operations and 35 companies with laboratories.

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3M & Six Sigma

3M is the world’s 3rd most innovative technology company that strives to create groundbreaking products. The goal of 3M with implementing Six Sigma is simple – create products that make positive differences in everyone’s lives.

The company strives to continue its conscious efforts to excel with the Six Sigma implementation by proactively deterring issues that will arise in production and corporate operations.

3M has imbibed the Six Sigma implementation strategy and has revolutionized its infrastructure. Known to be today as the “World’s Most Ethical Company” 3M is now a leading innovator in technology, and energy and offers an in-depth case study to show exactly how Six Sigma transformed its company.

Six Sigma Implementation

The story of 3M and Six Sigma harks backs to the time when James McNerney joined 3M. James McNerney gained control of 3M in 2001 and placed the Six Sigma methodology into the backbone of the company. His unique, considerate approach led to a four-year overhaul of the manufacturing and production processes which lead the innovative technologies.

McNerney grew 3M other enterprises such as Global Sourcing, 3m Acceleration, eProductivity, and Indirect Cost Control. As a result, in 2005 it began with over 30,000 employees Six Sigma certified, with a minimum Green Belt training for all technical and sales staff.

This brought substantial revenue growth, massive savings, and benefits to the company. The 2003 Annual Report stated that operating income was amplified by more than $500,000 in 2002 alone as a result of the Six Sigma initiatives.

3M researchers still use the Six Sigma toolset and the success saga continues setting iconic examples of customer delight, bringing satisfaction to the people working for the company and benefits to society with numerous social activities and spreading environmental awareness.

Only Six Sigma has the tools necessary to transform business, with total process improvements and reducing defects. Six Sigma drives growth, reduces costs, increases revenue, and produces strong business relationships with customers that last a lifetime.

The Outcome

Alongside with considerable financial growth, 3M enjoys significant corporate network growth. 3M’s network continues to expand by collaborating with numerous companies on over 250 projects such as Ford, Estee Lauder, Motorola, Wal-Mart, and Procter & Gamble.

Mature, effective Six Sigma programs practiced at 3M are easily spotted, sharing their knowledge with customers, suppliers, and other important personnel.

It is a popular or rather compelling perception of the 3M company. Call it the continuous brand building exercise or/ and perhaps the second nature of the 3M company. It has given the multi-fold growth of the company.

The flip Side Of Six Sigma at 3M.

Every great thought even though highly successful and historical in lifting mankind to the next level has its share of criticism. While 3M emerged financially stronger from the McNerney era, many long-time 3M researchers, engineers, and scientists chafed under the strictures of Six Sigma have their share of criticism.

3M Shelves Six Sigma in R&D

Geoff Nicholson, 3M ambassador, and former vice president for international technical operations also widely regarded as the “father” of the Post-It note initiative perhaps sounded critical for 3M processes at a recent media tour of 3M’s research and development facility in Singapore.

He quipped, Innovation has become too much of a “buzzword”. His premise was supported by an advise. Companies first need to define innovation and how it fits into their business plans, then provide the resources to support it.

He said “It is important to provide leadership and then people know that they can practice innovation. That is part of the problem, people are afraid of failure. Maybe it’s because of ‘losing face’ in an Asian society, but the fact of the matter is, failure is not a failure. I would rather call it a learning experience,” he said.

He also inferred that the lack of freedom, or too strict a process, is also a significant roadblock, such as the Six Sigma process. Perhaps he thinks too much of format thinking (like Six Sigma) inhibits the out of box thinking.

However, the 3M ambassador pointed out he had nothing against the Six Sigma but felt it was not ideal for the creative process.

In India, 3M was established in the year 1998 by the name of Birla 3M Limited in Bangalore. The company changed its name to 3M India Limited in the year 2002. The company has become a big name in the field of technology and household business for its high-quality services and facilities. 

3M India offers a number of specialized solutions in the field of technology-based marketing and household products. The Industrial segment consists of:

• Health care services
• Telecom and marine services
• Oil and gas
• Security and defense

In addition, it also offers other allied services in the automotive, industrial, electrical, safety and telecom sectors oil and gas pipelines, fiber cables, insulating materials, voltage power instruments, high-quality reflective equipment for personal and traffic safety, etc.

3M India also produces production material for commercial graphics and designs e.g. digital signage solutions, touch systems, and lots more.

 In the field of health care, some of the products of the company include:

• Stethoscopes
• Dental care equipment
• Infection Prevention therapy instruments
• Orthodontics products

The company boasts both B2B and B2C satisfied client base with an extensive list of around 5000 products in a diverse industrial and household product list. Today the company is located with well-equipped manufacturing units at cities like Pondicherry, Pune, and Bangalore employing 1200 people. The annual turnover of around Rs.7524 million and gained profits amounting to Rs.575 million.

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.” – William A. Foster

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15 comments.

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Innovation at 3M Corporation Case Solution & Answer

Home » Case Study Analysis Solutions » Innovation at 3M Corporation

Innovation at 3M Corporation

Introduction.

“Minnesota Mining & Manufacturing Company” was the previous name of the 3M Company. It is a global corporation in the “United States” that has interests in “industry, worker safety, health care, and consumer goods”. “Maplewood, Minnesota, a suburb of Saint Paul,” according to the website(Nimgade, 2002).

The “3M Company” is familiar with its “inventive culture” and “R&D efforts”, which have resulted in creating several “new products” for both the “industrial” and “consumer markets”. Rita Shor works as the company’s product expert. She recruited a team of subject experts to solve the problem using “Lead User Research,” a new and creative market research approach she learned at MIT. The goal of this activity is to collect data about consumer demands and then present items to the market that meet those needs.

Problem Statement

In this example, the “3M Corporation” uses and learns a new technique known as “Lead User research” to better predict “future customer” and “market expectations”. A team from “3M’s Medical-Surgical Markets” Division employs the “Lead User approach” to find not just “new product concepts”, but also a very good “new commercial strategy” in “surgical infection prevention. ”This case focuses on three topics are as under:

• First is the “3M’s approach” to managing “innovation and identifying market demands”.
• Second is an in-depth discussion of the “Lead User technique” and it’s possible in the “medical industry”.
• And third is “the managerial obstacles” of implementing fresh methods into a “successful company”.

Situation Analysis

1) recommendation for the “medical-surgical lead user team”.

I have to recommend the “three new product concepts” for the “medical-surgical lead user team ”because this recommendation is less risky. The Three new product concepts are discussed in below:

• “The Economy Line”.
• “The Skin Doctor Line”.
• “Antimicrobial (Armor) Line”.

“The Economy Line”

The “Medical-Surgical Market Division” might consider creating a line of surgical drapes composed of several “low-cost textiles.” Existing 3M adhesives and fasteners can cling to the body in a variety of ways. A “one-size-fits-all strategy” and “timesaving dispensing methods” will improve product acceptance in the “current cost-containment” context, particularly in developing nations. (The motivation for this product line came from divisional fact-finding missions to poor countries.) Following the lead user’s instructions, these materials should allow the surgeon to focus entirely on the body part being operated on. Because it’s based on current 3M technology, it’s a step-by-step approach.

“The Skin Doctor Line”

Antimicrobial protection should be considered by the Medical-Surgical Market Division as hand-held devices that look like hand-held vacuums. Antimicrobial chemicals would be layered on the surfaces being worked on by these machines. Besides the original layering mode, a developed iteration of the “Skin Doctor” may have a vacuum mode that could suck up surface liquids. The Lead User workshop sparked this idea. This is also an incremental idea because it is based on 3M technologies that already exist.

“Antimicrobial (Armor) Line”

3M is currently entirely focused on “surface infections”, disregarding other infection control areas including “blood-borne, urinary tract, and respiratory disorders”. 3M technology would be used to “armor” catheters and tubes against unwanted microscopic guests in an armor product line. This line would be a game-changer since it would not only complement the company’s current reactive infection management strategy, but it would also allow it to enter a new $2 billion market.

2) Convince with senior management to adopt the Recommendation

3M’s aim is to develop a pool of “practical, creative, and valuable ideas” that are encouraged into possibilities by providing a range of “innovation centers” and “Technical forums”. I persuaded and negotiated with top management to implement the suggestion using the following techniques:

• Of course, terms like “this recommendation enhances efficiency” or “reduces rework” will pique their attention. However, it also provides figures such as “expected savings of X thousand dollars per year,” e.g. as compared to the current strategy.
• Prepare to answer the questions like, “What happens if the new tool doesn’t work?” “How long do we have to use it?” and “how much will it cost?” “Can we go back to the old solution if it doesn’t work?”
• Even before the meeting, you should be prepared to answer these questions. You may have to deal with those who are opposed to change, so be prepared with aggressive and concrete responses. Making any form of a change in a business is difficult. It doesn’t matter if it’s a new recommendation tool or a simple modification in the air conditioner’s temperature setting.

Conclusion:

In this situation, Rita and her team should deliver the first three product line suggestions, together with all findings, to top management. Because the firm won’t be able to build a game-changing product in a decade, the first three proposals should be prioritized. Because it applies to revising the healthcare unit’s business plan, the fourth proposal can be offered later once analysis and consensus have been reached. Redefining your objectives, targets, and strategies is part of rewriting your business strategy. It can occasionally lead to the failure of an organization. As a result, the organization may benefit from evaluating the fourth advice. Concerning the fourth recommendation, a brief presentation might be made. It can be done if top management agrees….

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Innovation at 3M Corp. (A) is a Harvard Business (HBR) Case Study on Technology & Operations , Fern Fort University provides HBR case study assignment help for just $11. Our case solution is based on Case Study Method expertise & our global insights.

Technology & Operations Case Study | Authors :: Stefan Thomke, Ashok Nimgade

Case study description.

Describes how 3M Corp. introduces and learns a new and innovative methodology called Lead User research to understand future customer and market needs. A team from 3M's Medical-Surgical Markets Division applies the Lead User methodology to the field of surgical infection control and discovers not only new product concepts but also a very promising new business strategy. Focuses on: (1) 3M's approach to the management of innovation and understanding market needs, (2) an in-depth description of the Lead User method and its potential as applied to the medical business, and (3) the managerial challenges of introducing novel methods into a successful organization.

Change management, Collaboration, Competition, Market research, Product development, Strategy execution

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[10 Steps] Case Study Analysis & Solution

Step 1 - reading up harvard business review fundamentals on the technology & operations.

Even before you start reading a business case study just make sure that you have brushed up the Harvard Business Review (HBR) fundamentals on the Technology & Operations. Brushing up HBR fundamentals will provide a strong base for investigative reading. Often readers scan through the business case study without having a clear map in mind. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions. Reading up the HBR fundamentals helps in sketching out business case study analysis and solution roadmap even before you start reading the case study. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself.

Step 2 - Reading the Innovation at 3M Corp. (A) HBR Case Study

To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly - underline the details and sketch out the business case study description map. In some cases you will able to find the central problem in the beginning itself while in others it may be in the end in form of questions. Business case study paragraph by paragraph mapping will help you in organizing the information correctly and provide a clear guide to go back to the case study if you need further information. My case study strategy involves -

• Marking out the protagonist and key players in the case study from the very start.
• Drawing a motivation chart of the key players and their priorities from the case study description.
• Refine the central problem the protagonist is facing in the case and how it relates to the HBR fundamentals on the topic.
• Evaluate each detail in the case study in light of the HBR case study analysis core ideas.

Step 3 - Innovation at 3M Corp. (A) Case Study Analysis

Once you are comfortable with the details and objective of the business case study proceed forward to put some details into the analysis template. You can do business case study analysis by following Fern Fort University step by step instructions -

• Company history is provided in the first half of the case. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the organization. Often history is provided in the case not only to provide a background to the problem but also provide the scope of the solution that you can write for the case study.
• HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the ground. Use these instances and opinions to mark out the organization's culture, its people priorities & inhibitions.
• Make a time line of the events and issues in the case study. Time line can provide the clue for the next step in organization's journey. Time line also provides an insight into the progressive challenges the company is facing in the case study.

Step 4 - SWOT Analysis of Innovation at 3M Corp. (A)

Once you finished the case analysis, time line of the events and other critical details. Focus on the following -

• Zero down on the central problem and two to five related problems in the case study.
• Do the SWOT analysis of the Innovation at 3M Corp. (A) . SWOT analysis is a strategic tool to map out the strengths, weakness, opportunities and threats that a firm is facing.
• SWOT analysis and SWOT Matrix will help you to clearly mark out - Strengths Weakness Opportunities & Threats that the organization or manager is facing in the Innovation at 3M Corp. (A)
• SWOT analysis will also provide a priority list of problem to be solved.
• You can also do a weighted SWOT analysis of Innovation at 3M Corp. (A) HBR case study.

Step 5 - Porter 5 Forces / Strategic Analysis of Industry Analysis Innovation at 3M Corp. (A)

In our live classes we often come across business managers who pinpoint one problem in the case and build a case study analysis and solution around that singular point. Business environments are often complex and require holistic solutions. You should try to understand not only the organization but also the industry which the business operates in. Porter Five Forces is a strategic analysis tool that will help you in understanding the relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in the light of given facts.

Step 6 - PESTEL, PEST / STEP Analysis of Innovation at 3M Corp. (A)

Another way of understanding the external environment of the firm in Innovation at 3M Corp. (A) is to do a PESTEL - Political, Economic, Social, Technological, Environmental & Legal analysis of the environment the firm operates in. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. You can even identify the source of firm's competitive advantage based on PESTEL analysis and Organization's Core Competencies.

Step 7 - Organizing & Prioritizing the Analysis into Innovation at 3M Corp. (A) Case Study Solution

Once you have developed multipronged approach and work out various suggestions based on the strategic tools. The next step is organizing the solution based on the requirement of the case. You can use the following strategy to organize the findings and suggestions.

• Build a corporate level strategy - organizing your findings and recommendations in a way to answer the larger strategic objective of the firm. It include using the analysis to answer the company's vision, mission and key objectives , and how your suggestions will take the company to next level in achieving those goals.
• Business Unit Level Solution - The case study may put you in a position of a marketing manager of a small brand. So instead of providing recommendations for overall company you need to specify the marketing objectives of that particular brand. You have to recommend business unit level recommendations. The scope of the recommendations will be limited to the particular unit but you have to take care of the fact that your recommendations are don't directly contradict the company's overall strategy. For example you can recommend a low cost strategy but the company core competency is design differentiation.
• Case study solutions can also provide recommendation for the business manager or leader described in the business case study.

Step 8 -Implementation Framework

The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions. Implementation framework differentiates good case study solutions from great case study solutions. If you able to provide a detailed implementation framework then you have successfully achieved the following objectives -

• Detailed understanding of the case,
• Clarity of HBR case study fundamentals,
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• Developed an ability to prioritize recommendations based on probability of their successful implementation.

Implementation framework helps in weeding out non actionable recommendations, resulting in awesome Innovation at 3M Corp. (A) case study solution.

Step 9 - Take a Break

Once you finished the case study implementation framework. Take a small break, grab a cup of coffee or whatever you like, go for a walk or just shoot some hoops.

Step 10 - Critically Examine Innovation at 3M Corp. (A) case study solution

After refreshing your mind, read your case study solution critically. When we are writing case study solution we often have details on our screen as well as in our head. This leads to either missing details or poor sentence structures. Once refreshed go through the case solution again - improve sentence structures and grammar, double check the numbers provided in your analysis and question your recommendations. Be very slow with this process as rushing through it leads to missing key details. Once done it is time to hit the attach button.

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Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)

Research and Analysis on Corporate Inventory Management Issues under the Epidemic - A Case Study of 3M Company

From the beginning of 2020 to the present, Covid-19 has been spreading around the world, continuously destroying the global economy and people’s health. At the beginning of the Covid-19 outbreak, the global mask market was in short supply, and 3M, the world’s leading mask manufacturer, expected to expand its production capacity in the midst of Covid-19. However, due to the impact of the supply chain management and the rising costs of raw materials and labor forces, 3M was unable to expand its production capacity in time. This paper studies the supply chain management of 3M, finds out the problems, and proposes corresponding countermeasures to improve the supply chain management of 3M, so as to help the company better achieve its strategic goals and gain more profits. It is found that supply chain management is a key source of competitive advantage and a powerful tool to boost performance. In the grand scheme of things, a methodical approach to supply chain optimization is both scientific and necessary. By optimising the supply chain, 3M has been able to improve customer satisfaction while lowering costs and increasing the efficiency of the entire system from the procurement of raw materials and components to the manufacture, distribution, and delivery to end users. The supply chain optimization and improvement programme at 3M are meant to increase customer satisfaction while lowering overall costs and increasing the efficiency of each company in the supply chain.

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A Case Study of 3M Company

Introduction, overview of the topic of study, background of information technology (it) implementation.

In the contemporary business atmosphere of online shopping options available due to the proliferation of eCommerce and mCommerce, the field of supply chain management has become a primary concern for many enterprises. This implementation of IT is especially critical for heavily supply chain reliant commercial entities, such as manufacturing companies which depend on the network to deliver their products to the end-user. In such a scenario, suppliers, shipping entities, distributors, and retailers form the primary stakeholders.

In the face of a rapidly evolving marketplace, comprising exponential technological development and changing customer expectations, an integrated supply management system encompassed within a digital environment that integrates the operations carried out by the various stakeholders in the supply chain is a necessity, and no longer a value-added proposition. This would enable an enterprising corporation avoid the various bottlenecks of conventional supply chains, while speeding up the entire process and streamlining the duties of just-in-time procurement, inventory reduction and management, manufacturing efficiency and meeting of customer-specific requirements such as mass customization promptly and effectively. Interestingly, real-time, or near real-time information disbursement and delivery is critical in the implementation of a contemporary supply chain management system.

Introduction of 3M Company

The Minnesota Mining and Manufacturing Corporation was conceptualized and launched in 1902 in Minnesota, near Lake Superior (3M n.d.). 3M is an American-based multinational conglomerate company that is primarily operating in the fields of healthcare, consumer goods, industry, and worker safety. The company is based in a St Paul, Minnesota suburb of Maplewood and produces a wide variety of items under different brands. The Company has a portfolio of at least 55,000 products including laminates, abrasives, adhesives, personal protective equipment, passive fire protection, paint and window protection films, car-care products, circuitry, electrical and electronic products, dental and orthodontic products, and insulating materials (3M, n.d.; Baker, 2017).

As per the year 2018, the company was listed in the Fortune 500 list of the biggest US corporations in revenue at number 95 (Fortune, n.d.). It also had about 93500 employees in its employ and had operations in at least 70 different countries, with franchises in about 200 countries by the end of that fiscal year.(3M, n.d.) As with any other multinational entity, globalization and technology is a significant influence in corporate actions. Every company ought to fluidly adapt to changing technology and globalization trends through market research and development (Susarla & Karimi, 2012). Efficient globalization provides a platform for the effective control of 3M Company’s assets and resources; bringing an understanding of transnational research and development, and better budgetary and innovation considerations and managerial constraints (Bertho & Crawford, 2008).

A company that adjusts to the market through an understanding of the effects of technology and globalization on its business procedures is likely to grow and maintain its market scope and profitability margins (Borgia 2014; Juntao & Yinbo, 2016). The information flow within a multinational conglomerate, such as 3M Company is imperative to its continued development. In the contemporary society, clients highly prefer to shop online, and a multinational corporation like 3M should ideally have infrastructure in place to scale, augment, and replenish its resource base, while cost-effectively catering to its diverse client base.

Purpose of the Report

The purpose of this study is to review the implementation of information technology (IT) in the case of 3M Company. The establishment of 3M Company as a multinational conglomerate with business ventures spanning across more than 200 countries will provide an effective case study review and provide generalizable results that can be extended for application in other Small and Medium Enterprises (SMEs). The 3M Company’s products are available in the majority of the countries and locations in service through a wide network of suppliers and distributors. However, the company avails most of its products for purchase online (3M, n.d.).

The review of the company’s transnational research and development in the field of IT in SCM would also be essential in understanding how to innovate for stronger consolidation of resources and budget. This study will seek to assess 3M Company’s IT implementation, and how these capabilities translate to the corporation’s revenue-generating capabilities, operational efficiency, and competitive capacity relative to its competitors. Informed conclusions and recommendations can then be drawn from the findings, based on the effect of IT on the implementation, augmentation, and replenishment of the company’s supply chain.

Literature Review

Supply Chain Management (SCM) widely refers to the management of a network of interlinked businesses that are involved in the provision of commodities; products or services, that are needed by the end consumer (Varma & Khan, 2014; Foerstl, Schleper & Henke, 2017). The efficient relay of information among supply chain networks facilitates supply chain stakeholders to collaborate in the integration and coordination of the supply chains for a more efficient SCM. Information also plays a critical role in enhancing the performance; by increasing speed and reducing bottlenecks, of supply chains, and reducing risk as it provides processes of executing transactions and creates opportunities for decision-makers within a company by providing them with prompt information in the format they require it in (Zhu, Krikke & Caniëls, 2017).

In the contemporary business landscape, decision-makers can effectively track products and services at every step of the process flow, much to the automation of many of the processes through the development of technology. This technology and globalization development also improve the relay of necessary and accurate information within timelines that allow the implementation of information to reduce errors. The primary objectives of IT in the domain of SCM are to provide information in an abundant and visible fashion, to enable a single point of contact of critical data, to allow the making of decisions based on an informed overview of the entire supply chain, and facilitate the collaboration of the various supply chain stakeholders (Nair, 2012; Varma & Khan, 2014).

The purpose of IT implementation in SCM is to create a cohesion between the supply and demand of products, allowing a more prudent approach to inventory management, decision-making, and consumer acquisition and management. This aligns with the functional roles of IT in SCM, which have been outlined as Decision Support, Collaboration and Coordination, and Transaction Execution (Varma & Khan, 2014). The implementation of IT in SCM also provides an excellent vessel for the integration of external partners into the supply chain as well (Gilaninia et al., 2011). The implementation of IT in SCM is also widely considered a prerequisite for the management of cyber-crime and other e-risks (Soosay & Hyland, 2015; Zhong, Xu & Wang, 2017).

Electronic Records Management

Electronics Records Management (ERM) is a collective term used to refer to the paperless business transactions conducted over Enterprise Resource Planning (ERP), Electronic Data Interchange (EDI) and Automatic Identification (AutoID) systems (Rawat et al., 2013). The increasing complexity of data significantly increases the uncertainty risks in supply chains. However, an effectively integrated IT system can manage information flow within critical business processes, money, and resources; improving quality and profit margins by reducing transaction risk and coordination costs (Jian, Yang & Gao, 2015). The primary objective of Electronic Records Management (ERM) systems within SCM is to ensure accountability of the process flow.

Electronic Data Interchange (EDI) is the computer node-to-node interchange of business information and documents in a structured, standardized, and machine-retrievable format. This allows the computer to access and process the information autonomously with minimum human input. This helps in an overall better customer support experience, improved cost efficiency, productivity, and tracing and expediting, competitive advantage, and better invoicing (Angelova, Kiryakova & Yordanova, 2017).

Enterprise Resource Planning (ERP) on the other hand comprises of organizational planning systems, which all work around the core activities of business, and have all the logical interfaces necessary to facilitate seamless flow of information to all entities within the supply chain. Essentially, ERP is not a system, but rather a framework comprising administration, human resources, and manufacturing. It is a cooperative software that manages and coordinates a company’s activities, assets, and resources. The ERP is designed as an enterprise information system that integrates and streamlines the business process and transactions within a corporation (Jian et al., 2015).

Bar Code, Radio Frequency Identification (RFID), and Scanners

Bar codes can either have a ladder orientation; where the width lines are arranged in a horizontal fashion, or picket fence orientation; where the width lines are arranged in a vertical fashion. The data is then stored in optical or magnetic form to comprise part of a communication system and organizations use it in a supply chain network to automate the identification and tracking of products and services at each step of the process flow.

Radio Frequency Identification (RFID) is a technology that is based on tags that emit and relay the identity of an object in the form of a unique serial number through wireless radio signals. Readers then receive the data transmitted from these tags and send it to the corporation’s information system for review and analysis. Both bar codes and RFID tags are based on the automatic identification (AutoID) technology, with the discerning factor being that, in bar codes, the scanning technology reads the bar code using optical imaging or laser technology, while in RFID, the reading technology scans the RFID tag using radio signals. They are both critical in providing accurate identifying information within efficient timelines to reduce errors (Xiao, Bo & Chen, 2017).

This primary advantage of both technologies helps in the mitigation of the Bullwhip effect which is very prevalent in the consumer goods industries (Oliveira et al., 2015). This effect is brought about by the distorted or exaggerated communication leading to misguided capacity plans, excessive inventory and investment, missed production schedules poor customer support, and lost earnings. RFID and bar code technology can be implemented within these areas of the supply chain to significantly remove inaccuracies. A real-life case scenario of this implementation is Wal-Mart following its implementation of RFID and bar code technology in 1983, complemented by satellite communication implementation in 1987 (Alyahya, Wang & Bennett, 2016). This facilitated the real-time communication of inventory data. Furthermore, FedEx implements the same technology, which allows the customer to track their package in real-time (Goudarzi, Malazi & Ahmadi, 2016).

Overall, the implementation of RFID and bar code systems enables accurate product identification, improves data accuracy, eases data entry, minimized on-hand inventory, verifies orders on reception and in shipping, improves customer support, reduces ide time, and work-in-process, reduces scrap or enhances product yield, and improves, monitors, and controls shop floor activities, including scheduling and floor space (Jedermann et al., 2009; Ballestín et al., 2013). These technologies further allow the corporation to reduce supply chain risks which may arise from the manual oversight, and possible fraudulent data entry by insiders.

However, these technologies are susceptible to data mismanagement, which may be performed through the execution of unauthorized changes to the data prior to addition in the system, fraudulent input data, inaccurate posting of a transactions, omitting accurate input data, alteration of master file records, destroying of the output data, or entry of a virus that can manipulate the data, program, or database (Goudarzi et al., 2016).

Electronic commerce (e-Commerce) refers to the techniques and tools that are implemented to manage a business within a paperless environment. This includes the implementation of Electronic Data Interchange (EDI), electronic funds transfers, image processing, databases, optical or magnetic data capture, the internet, and electronic mail and publishing (Yu et al., 2017). E-commerce may be implemented in the following forms;

Electronic procurement (e-Procurement)

An e-procurement framework can be integrated within an existing purchase to pay (P2P) supply value chain to make it into a computerized SCM system. This is implemented via a software application that ideally includes features for vendor management, supplier management, catalogue management, and contract management. E-Procurement is implemented and facilitated primarily in the form of a web-based enterprise resource planning (ERP) program (Wamba & Chatfield, 2011; Li, 2014).

Intel is widely considered a pioneer in this domain, whereby the corporation launched a revolutionary global online ordering system in 1998, surpassing USD 1 billion in product orders within the first month of operation (Cao, 2014). Today, the company generates approximately 85 percent of its revenue from online business, and almost all Intel customers transact with the company, in one form or the other, over the internet. The company is aggressively pushing for paperless business transactions, from the issuance of purchase orders, to the shipment deployment and notification processes (Yu et al., 2017).

Electronic Retail (e-tailing)

Electronic Retail (e-tailing) is simply the implementation of infrastructure that facilitates the sale of goods over the Internet (Kembro, Danielsson & Smajli, 2017). This is a domain of the market that Amazon has become renowned within, by selling a wide variety of goods and services over its Amazon.com online market place.

Secure Electronic Transaction/ Technology

Secure electronic transaction (SET) is the proposed industry standard for the secure relay and acceptance of payment and payment cards over the internet. The core of the system often involves a pair of digital keys, one private key and a public key that are held by each part within a payment transaction. In practice, the client is provided both keys, along with a digital certificate that proves the authenticity of the keys. When this client wishes to transact with an online merchant, he can then give the merchant his public key along with the digital certificate to prove its authenticity. In similar fashion, the merchant proceeds to provide his own key and certificate for assurance and this allows the transaction to proceed. This is necessary to ensure that accounts correctly match to their clients (Prajogo & Olhager, 2012; Hübner, Holzapfel & Kuhn, 2015).

Extensible Markup Language (XML)

A markup language is a mechanism implemented in identifying and deciphering structures within a document. The extensible markup language (XML) specification provides a standardized way in which users that add markup into a document and data, such that the document’s content can be processed with relatively little to no human intervention. It also provides that this data flow is efficient, and can be accessed across different hardware, applications, and operating systems (Xie et al., 2014).

XML can be relayed across languages, applications, and platforms over a diverse range of development utilities and tools. The modes of application of XML are boundless, and the implementation in electronic business (e-business) and SCM are only one application area. XML-based solutions would provide viable alternatives to conventional Electronic Data Interchange (EDI) and significantly lower the barriers of entry into the foray of e-business as it has a relatively lower investment and implementation cost compared to conventional EDI (Xie et al., 2014; Ben-Daya, Hassini & Bahroun, 2017). In essence, XML provides a relatively cost-effective approach to information exchange between systems and organizations.

Intranet/Extranet

By using specialized web browsers and server software within their internal systems, corporations can improve their internal information networks and link otherwise incompatible nodes within the supply chain networks for reduced manual intervention. These computer networks developed within an organization, however, are often connected via internet-based protocols but are inaccessible from the outside (Tyagi et al., 2012).

These internal networks are usually developed as means to communicate pertinent company information to employees, but as they employ similar language, and easily connect to the internet, they can be easily scaled to include suppliers and clients. This results in a supply chain extranet, that would be implemented at a far lesser cost than a proprietary network. The extranet may provide secured access to its intranet and is secured behind a firewall (Madakam, Ramaswamy & Tripathy, 2015; Tu, 2018).

Spread Sheets

Organizations are increasingly using consumer-level spread sheet applications, such as Microsoft Excel as their default computer software and decision-making tools in their supply chains. This is because these consumer-grade software features extensive functionality and has a lower cost of ownership in comparison to commercial software alternatives (Mahamani & Rao, 2010). Usually, the complexity involved with supply chain networks creates loopholes within which fraudsters can commit fraud beyond the scope of internal controls. However, effective implementation of spreadsheet software can highlight the fraudulence on the data sets using a rather simple procedure such as Benford’s Law of distribution (Varma & Khan, 2012). Spreadsheet software is essential in the management and organization of organizational data for supply chain networks in a bid for performance improvements, and the mitigation of financial fraud such as bid rigging, false counting, counterfeiting, fictitious accounting, falsified hours and so forth (Liu et al., 2013).

Data Mining and Data Warehouses

A data warehouse represents a combination of the different databases that exist across the entire enterprise, aiding in the management and decision-making process, and exhibiting specific characteristics such as integration, non-volatile, process oriented, and accessible. Data mining, on the other hand, combines data analysis techniques, including statistical modeling and analysis, and data acquisition to uncover hidden patterns and interrelationships within the data. This allows the user to infer to the rules that would govern the prediction of future results (Fawcett et al., 2011; Ma Yinbo, 2016).

Data mining allows the corporation to define operational procedures based on both intuition and experience, detect anomalies based on statistical deviations from normal or expected behavior parameters, develop predictive models, and social network analysis based on the level of association between the present accounts and individuals. Data mining is also rather significant in the review and identification of fraudulent behavior based on associations between accounts and individuals, and deviations in the data (Waller & Fawcett, 2013).

Software Agents

A software agent refers to a software system(s) that has the coded attributes of autonomy, perception, intelligence and adaptability. This enables it to act on behalf of its user in a proactive capacity. Intelligence of a software agent may refer to a software’s ability to perform a task or action by analyzing the prevalent information gathered (Gowder, 2013; Lee et al., 2017a). This can be seen implemented in buyer agents, or shopping bots, surveillance agents, and data-mining agents. As e-commerce heavily relies on online business, security is a primary concern. As a result, software agents can provide security to any relayed information, providing encryption and decryption in real-time (Nair, 2013). Software agents are also responsible often for customer support and service in B2B and B2C e-commerce and they have proven to be invaluable within the e-commerce domain. In fact, Gowda (2013) likens the absence of software agents within e-commerce as a man missing a leg.

Machine to Machine (M2M) Technology

Machine to Machine technology (M2M) refers to the wireless or wired communication between devices with a similar or complementary ability. The contemporary M2M communication has expanded exponentially beyond a one to one communication model to become an interconnected network system that allows the transmission of data to a host of personnel devices. M2M domains include system monitoring, digital signature, advertising, telemetry and telematics (Varma & Khan, 2014; Lee et al, 2017b; De Koster, Johnson and Roy, 2017). The implementation in SCM has boundless potential, from the tracking of demand and supply, to the implementation of real-time sensors that make operations detect, and predict procedures to ensure smooth production processes. With the projected growth in this sector, owing to the transition into the Internet of Things, M2M technology with continue to grow into the future (Ben-Daya, Hassini & Bahroun, 2017).

The proliferation of IT has provided an avenue into the management of complex supply chains and changed the landscape business communication. High performance systems, and cloud computing platforms have started appearing in supply chain networks, and owing to globalization, technology development, and mass customization requirements, enterprises have continually adopted efficient SCM frameworks (Ng et al., 2015; Ngai, Chau & Chan, 2011).

To compete, corporations have to expand their supply chain integration and integrate all their stakeholders and ensure efficient and seamless communication. IT tools are critical for such efforts, and IT is often an enabler in SCM with considerable benefits to organizations. However, with the implementation of extensive IT comes the increased susceptibility to cyber-crimes and other e-risks. Coincidentally, the response to the mitigation of cyber-crimes and e-risks is the effective implementation and usage of IT; where the tools that increase the susceptibility to e-risks provide the means to combat them (Pflaum et al., 2017; Xue et al., 2013; Alicke, Rexhausem & Sevfert, 2017).

Data Analysis and Findings

The inception and development of 3m company.

3M company was previously known as the Minnesota Mining and Manufacturing Company, and was conceptualized in Two Harbors, Minnesota by five businessmen; Hermon Cable, William McGongale, Henrey Bryan, John Dawn, and Daniel Budd (3M, n.d.). The initial company’s goal was in the mining industry, and specifically corundum, but this failed as the mine’s holdings were on anorthosite, which had no commercial value. It transitioned to the manufacture of sandpaper products, with the company finally becoming financially stable and paying its first dividends in 1916

The company would further expand and diversify its operations over the next century of business. With the name being officially changed to “3M Company” on its 100 th Anniversary (3M, n.d.). It would, however, in the span of operations during this time, make significant acquisitions of companies in different fields, including Riker Laboratories in the mid-1960s, proceeding to produce the first asthma inhaler, and the first CFC-free asthma inhaler in the 90s (Baker, 2017). Other acquired entities included Meguiar’s; a car-care products company, Arizant Inc., Winterthur Technology group; a bonded abrasives company, and Scott Safety; the safety gear outfit for Johnson Control International PLC (3M, n.d). The company has a portfolio of over 65000 products globally, over their core six business units which include Displays and Graphics, Health Care, Industry and Transportation, Electrical and Communications, Safety Security and Protection Services, and Consumer and Office (Baker, 2017).

Reasons for the Digitization of 3M Company’s Supply Chains

3M Company is a USD 30 Billion multinational conglomerate with global supply chain that includes approximately 200 manufacturing plants, 100 warehouses and 25 customer-facing divisions (Banker, 2017). The rather unique state of 3M company, in regards to its wide-span scale of operations and exposure in the international market provided the requirement to further streamline and digitize its supply chain network. Mr. Keel, who is the senior Vice-President in Supply Chain Management at the company outlines that the conventional approach to SCM, would no longer be conducive for the company, stating;

“…the world has though 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.” (Baker, 2017)

This realization has seen the company revitalize its efforts to digitize its supply chain network, which in essence can only be implemented via the integration of IT.

Another inherent problem in the conventional SCM at 3M Company was the length and complexity of the supply chain network. With the current business operations, the complexity of the supply chain is further compounded by the fact that some of the businesses and plants within the 3M conglomerate function as primary suppliers to other lines and areas of the business. Further, processes and locations required for the support of external customers can add time, distance, and a great deal of complexity for the core internal manufacturing flows (Hagerty, 2012).

This supply chain complexity is especially illustrated in a simple case scenario whereby a picture hook manufactured under the 3M “Command” brand name is traced in the entirety of its supply chain. The production process started in an adhesive plant in Missouri, from where adhesive was shipped to another 3M plant in Indiana, a distance of 550 miles, for the manufacture of polyethylene foam. From here, the work-in-progress was then shipped 600 miles to Minneapolis, and a contractor would apply the 3M logo and slice the work-in-progress material into the appropriate sizes. A final trip would be made to a contractor 200 miles away for the hooks to be added and final packaging to be made. This is an overly complex and tedious process, with the materials covering over a 1300mile supply chain for a final product that is sold for a few dollars (Hagerty, 2012).

The goal, therefore, was to digitize the 3M company Supply chain network with an overall aim of reducing manufacture cycle times by 25 percent. This will be implemented in what 3M refers to as “super hubs” whereby production will be done in fewer, larger, and more efficient plants spread out in the 3M Company’s sphere of influence all over the world (Hagerty, 2012). Mr. Keel further posits that the longer supply chains were more inefficient, in that, “…friction occurs at the connection points…” (Baker 2017). This means that there is more opportunity for mistrust and lack of cohesion among the various internal and external groups within 3M’s Supply chain network.

Finally, some of the policies adopted by 3M were out of touch with contemporary production procedures. For instance, the company had been under attack by two different and influential NGO campaigns faulting the company’s sourcing of pulp and paper. The policy weaknesses highlighted were specifically with 3M Company sourcing its pulp and paper from sensitive regions within the Canadian Boreal and from controversial suppliers. With limited responsibility on what was happening on the ground level related to pulp and paper sourced for its products, including the iconic Post-It note, the company would only hope to implement more transparency within its vast supply chain network (Earthworm.org, 2018).

Contextual Implementation of IT in 3M’s Supply Chain Management

The unnecessary travel time and production nodes were increasing on the complexity of the company’s supply chain with little to no payoff. As a result, 3M Company transitioned its supply chain significantly by consolidating the smaller operations into large regional hubs with more efficient manufacturing procedures. The streamlined manufacturing process ensures that raw materials can be effectively sourced and tracked, and a wide array of goods developed within the same complex. This significantly cuts down on the costs, as well as reducing complexity as well. Furthermore, each hub would be ideally located to cater for the production of items to the region in which it is located. This shift also sees the production change from several contractors, to being handled in-house. The entire implementation of the move to regional hub vertically integrated the supply chain network. The entire transition is aimed at reducing costs, and the manufacture cycle by 25 percent; further streamlining 3M (Hagerty, 2012).

Digitization of the entire production process also facilitates seamless communication between 3M, their suppliers, and the consumer and other stakeholders. This builds trust, in the empirical sense that, a track record can be established that the suppliers can perform at expected parameters, and as a result, set the precedence for 3M to match in its service delivery to its clients. For instance, the company operates a large specialty chemical business. This entity requires the regular purchase of chemicals and the creation of intermediate adhesive products that are then channeled into other lines of business within 3M as raw materials.

In the previous conventional supply chain, the supply of the chemical feedstocks and adhesive products would have been relayed in a linear fashion. With the digitization of the supply chain and adoption of a geometric network, 3M Company bolsters their physical supply chain to their upstream suppliers with digitization. Their systems can then by synced, with 3M being in a position to look upstream and see their suppliers’ capacities, and the suppliers looking downstream to see 3M’s consumption (Baker, 2017). This helps to significantly secure and maintain supply, even in cases where unprecedented demand occurs.

This digitization, or establishment of digital connections is also implemented on a peer to peer level, whereby 3M establishes the same brand of ERP with its partners. This allows the two peer systems to communicate directly with no middleware and with little to no manual intervention. However, for redundancy and security, 3M company has further instituted a cloud middleware between many of its peer connections that receives and translates the signals being relayed into intelligible communication for all recipient parties involved.

In regards to its iconic Post It notes, and a multitude of other paper-based products. 3M Company sought to implement digitization in the implementation of its 3M Sustainability Program. A significant part of this program revises the company’s procurement policy to encourage sustainable forestry. It states that

“…the 3M Pulp and Paper Sourcing Policy is designed to ensure all the virgin wood fiber going into our paper-based products and packaging comes from sources that protect forests and respect the rights of workers and people who live in or may depend on forests for their livelihood. 3M will only accept virgin fiber that can be traced to the forest source, proven to be obtained legally, and protective of high carbon stock forests, high conservation values, and workers’ and indigenous peoples’ rights.” (Baker, 2017; Earthworm.org, 2018)

However, there were problems with the implementation of this sustainable sourcing vision, which is the tracking and traceability of the pulp and paper products. 3M, therefore sought to enforce their sustainable sourcing policy by working in tandem with paper suppliers that could track where their harvested trees were sourced (Green et al., 2012). Consequently, a partner to partner (P2P) digital information network was established in support of these identification efforts. The paper suppliers would then have forestry partners who would bar code the trees, with loggers using handheld scanners to read the tags and identify the tree to a specific order.

This identifying information is then relayed to the mills, and from there, once 3M Company orders a roll from the mill, the traceability information is attached to the delivery of the roll. As a result of this implementation, 3M Company can reliably trace back more than 85 percent of their paper supply used for global production to the mill, and 40 percent to the forest (Baker, 2017; Earthworm.org, 2018; Diabat & Al-Salem, 2015; Crum et al., 2011).

3M Company also implements IT to foster trust internally. This is aimed at the numerous information hand-off points that include the numerous supply chain teams, sales and finance, marketing, production and logistics and so forth. These information relays encompass different planning and time horizons. For instance, the plant scheduling is conducted daily, while financial stakeholders are communicated to quarterly. However, the production planning is done weekly. As a result, the implemented IT system(s) ought to be scalable and complementary. The solution was to implement a standardized SAP-based Enterprise Resource Planning (ERP) platform complemented by a rigorous statistical-based approach that ensures that “one version of the truth” is reached.

On the customer side, 3M can reliably access point of sale data on how their products are selling and also how much inventory is in stock at different sections of a retailer network. However, more innovatively, 3M Company seeks to gain a competitive advantage by engaging in co-innovation and collaborative research and development with some of its big customers. This ensures that the company delivers what is needed, when it is needed. This implementation requires immense trust and communication, which is significantly facilitated by seamless IT implementation.

Globalization and Technology Advancement is a gamechanger in Supply Chain Management

3M Company’s policies and Supply Chain Networks had ensured the company’s success throughout, from its inception in 1902. However, as Earthworm.org (2018) point out, some of the policies and procedures adopted had quickly lost touch with the contemporary situation. Probably its biggest controversy in relation to SCM was with its sourcing of pulp and paper products which were unsustainable practices, and cast the company in a bad light in the court of public opinion. Furthermore, this would have adversely impacted the company’s arguably most iconic and widely recognizable product the Post It notes. Some years prior, however, this would not have been an issue, given the 3M Company did not own, and neither did it manage the forest lands from which its pulp and paper were sourced. However, in light of globalization, and technology advancement, the means to ensure that their products were sourced sustainably were in place, yet 3M company had not implemented them; much to the chagrin of Non-Governmental Organizations concerned with Forest protection and recovery, and the general public.

This underlines the importance of globalization and technology advancement, which are the primary driving factors behind the exponential growth of IT, in optimizing the decision-making in supply chain networks, and SCM overall. For a multinational conglomerate, such as 3M company, the implementation of IT would invaluably improve communication in the face of globalization, increasing competitiveness, mass appeal, and transactions and process improvement. This also allows such an entity, with diverse business transactions and endeavors to consolidate its projects and plants into what the company terms as “regional hubs” that are interconnected for streamlined production and overall better profit margins.

The advancement of IT also allows the efficient implementation of ERP systems that enable a manufacturing company, such as 3M Company, more transparency both upstream and downstream in the supply chain. Further, this enhanced transparency allows the abandonment of the more constricting linear model of resource supply to a more robust geometric model. This allows better resource allocation, as the suppliers upstream can look downstream and be acutely aware of the company’s consumption, while the company can in turn look upstream and gauge the supplier’s capacity. This allows the establishment of an efficient inventory management system, that is readily scalable in the face of unexpected demand surges. Furthermore, the integration of IT within SCM also brings accountability, accuracy and efficiency in that in peer-to-peer implementation of ERP systems, there is little to no manual intervention as well as a redundant cloud-based middleware that interprets signals into intelligible information for the recipient. This improves transparency reduces “friction” during information relay.

The “Human Aspect” in any Digital System should be Accounted for

Despite the advantages availed by the integration of IT within supply chain networks, a significant aspect has been introduced and defined. That of trust. Mutual trust can only be fostered between two human interfaces within business context and it has been defined in two significant ways. First is the emotional trust in that everyone involved, every stakeholder in the supply chain will do their part and to the best of their ability. This trust can be fostered and maintained through regular, and seamless communication. However, the second is trust in the empirical sense, whereby first, based on the track record of say, the supplier, the company can confidently communicate a promise to its clients on service delivery. Second is that, despite the numerous moving parts within the supply chain, a statistical review of the ERP system should yield a common truth from all stakeholders. This should be inherently accounted for in the implementation of an information system within SCM as outlined by 3M Company.

Finally, the human aspect of the IT implementation is explicitly outlined in the 3M Sustainability Program. While the overarching goal is to ensure sustainable forestry, the executors of the vision are primarily human. As such, 3M Company had to review their suppliers and identify those whom the company could rely on to implement the requirements of the 3M Pulp and Paper Sourcing Policy. Further the policy encouraged the suppliers to not just take responsibility for the wood products they supplied but make sustainable policies of themselves (Earthworm.org, 2018) This would ultimately foster collaboration between 3M Company and its suppliers and in turn better information flow between the two parties in reflection of the values outlined in the policy.

Conclusions

3M Company is a renowned figure in the international business scene and hosting a diverse portfolio of business pursuits. As such, the company’s innovative implementation IT within their SCM will undoubtedly form the blueprint to be implemented within other comparable and competing entities in the domain. However, this implementation has undoubtedly contributed to the conglomerates as well. While this implementation of IT within supply chain networks may be seen as the inevitable convergence and maturation of technologies and processes, 3M Company has taken the time, research and testing to ensure that the adopted methods are advantageous to their capabilities, and easily integrable in existing work capacity. This is the epitome of effective IT implementation within SCM (Thöni & Tjoa, 2017; Kurnia, Rahim & Gloet, 2012; DeGroote & Marx, 2013).

Demand management also plays a significant role in the corporate strategy adopted at 3M Company. Therefore, forecasting demand may help 3M adjust their output and input requirements to volatile the volatile global market (Nasiri, Zolfaghari & Davoudpour, 2014). This would continually improve operating efficiency within the company; with its unique production network design and demand management working to create a truly novel SCM system that may be unlike any other. However, given the exponential growth of technology, it is essential that the company channels some of the benefits of this particular IT implementation back into research and design to keep abreast the changing policy landscape and cushion for the future.

Finally, the company’s bid to streamline its operations within its primary markets, as well as utilization of IT to anticipate new areas of business interest will remain vital within the foreseeable future. The company’s policy of allowing its suppliers share the responsibility for shared goals and social practices also fosters trust and communication, which would be essential going forward.

Reflections

I have consistently studied the implementation of IT systems within SCM and logistics during the tenure of my MBA Program. Despite this theoretical exposure, I have had no previous experience within the field. However, I genuinely feel that this course has significantly increased my exposure to the field of contemporary SCM and logistics. Furthermore, the field study has provided and invaluable opportunity for me to learn and implement my knowledge in thinking like a business manager. Throughout the study, I had the opportunity to assess modern IT systems implemented within the business landscape and especially within Supply Chain Management and Logistics. I had the opportunity to understand the drawbacks and advantages of the implementation of each of these systems and I believe this knowledge would be essential for my future in the field. I am greatly inspired and contemplative from the readings I have had to go through in the course of this field study and I believe that this research, and the MBA program as a whole has greatly benefitted me.

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Lawsuits test Tesla claim that drivers are solely responsible for crashes

San Francisco — As CEO Elon Musk stakes the future of Tesla on autonomous driving, lawyers from California to Florida are picking apart the company’s most common driver assistance technology in painstaking detail, arguing that Autopilot is not safe for widespread use by the public.

At least eight lawsuits headed to trial in the coming year — including two that haven’t been previously reported — involve fatal or otherwise serious crashes that occurred while the driver was allegedly relying on Autopilot. The complaints argue that Tesla exaggerated the capabilities of the feature, which controls steering, speed and other actions typically left to the driver. As a result, the lawsuits claim, the company created a false sense of complacency that led the drivers to tragedy.

Evidence emerging in the cases — including dash-cam video obtained by The Washington Post — offers sometimes-shocking details: In Phoenix, a woman allegedly relying on Autopilot plows into a disabled car and is then struck and killed by another vehicle after exiting her Tesla. In Tennessee, an intoxicated man allegedly using Autopilot drives down the wrong side of the road for several minutes before barreling into an oncoming car, killing the 20-year-old inside.

Tesla maintains that it is not liable for the crashes because the driver is ultimately in control of the vehicle. But that contention is coming under increasing pressure, including from federal regulators. Late Thursday, the National Highway Traffic Safety Administration (NHTSA) launched a new review of Autopilot, signaling concern that a December recall failed to significantly improve misuse of the technology and that drivers are misled into thinking the “automation has greater capabilities than it does.”

Meanwhile, in a twist, Tesla this month settled a high-profile case in Northern California that claimed Autopilot played a role in the fatal crash of an Apple engineer, Walter Huang. The company’s decision to settle with Huang’s family — along with a ruling from a Florida judge concluding that Tesla had “knowledge” that its technology was “flawed” under certain conditions — is giving fresh momentum to cases once seen as long shots, legal experts said.

“A reckoning is coming as more and more of these cases are going to see the light of a jury trial,” said Brett Schreiber, a lawyer with Singleton Schreiber who is representing the family of Jovani Maldonado, 15, who was killed in Northern California when a Tesla in Autopilot rear-ended his family’s pickup truck in 2019.

Tesla did not respond to multiple requests for comment on the lawsuits.

The outcomes of the cases could be critical for the company. Tesla’s stock has lost more than a third of its value since the beginning of the year. Last week, the company reported a steeper-than-expected 55% plunge in first-quarter profit as it struggles with falling sales of electric vehicles and stiff competition from China. To allay investors’ concerns, Musk has made lofty promises about launching a fully autonomous “robotaxi” in August. Soon, he said during Tuesday’s earnings call, driving a car will be like riding an elevator: you get on and get out at your destination.

“We should be thought of as an AI or robotics company,” Musk told investors. “If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company. But we will.”

Meanwhile, the company has defended itself in court documents by arguing that its user manuals and on-screen warnings make “extremely clear” that drivers must be fully in control while using Autopilot. Many of the upcoming court cases involve driver distraction or impairment.

Autopilot “is not a self-driving technology and does not replace the driver,” Tesla said in response to a 2020 case filed in Florida. “The driver can and must still brake, accelerate and steer just as if the system is not engaged.”

But the Huang case also potentially involved a distracted driver: Huang was allegedly playing a video game when his Tesla plowed into a highway barrier in 2018. Tesla has not said why it decided to settle the lawsuit, and details of the settlement have not been disclosed in court documents.

More fatal crash details emerge

Meanwhile, federal regulators appear increasingly sympathetic to claims that Tesla oversells its technology and misleads drivers. Even the decision to call the software Autopilot “elicits the idea of drivers not being in control” and invites “drivers to overly trust the automation,” NHTSA said Thursday, revealing that a two-year investigation into Autopilot had identified 467 crashes linked to the technology, 13 of them fatal.

NHTSA did not offer specific information about those crashes. But two fatal crashes from 2022 are detailed in lawsuits that have not been previously reported.

In Phoenix, Iwanda Mitchell, 49, was driving a Tesla in May 2022 when she struck a Toyota Camry that had stalled on the highway, according to court documents and dash-cam footage obtained by The Post. According to the Mitchell family’s lawyer, Jonathan Michaels with MLG Attorneys at Law, Autopilot and the car’s other features — including forward collision warning and automatic emergency braking — failed to result in Mitchell’s Tesla taking evasive action and prevent the vehicle from barreling into the stalled sedan.

Mitchell was then struck and killed by an oncoming vehicle when she got out of her car.

Tesla did not respond to a request for comment regarding this case. In response to the complaint in January 2024, Tesla said it denies the allegation and “has not yet had an opportunity to inspect” Mitchell’s vehicle.

About a month later in Sumner County, Tenn., Jose Roman Jaramillo Cortez drank two beers and three tequila shots after his shift at a local restaurant, and then hopped into his Tesla Model 3, court documents say. He plugged his address into the Tesla’s GPS and flicked on Autopilot, it said.

According to the lawsuit filed in June 2023 and dash-cam footage obtained by The Post, the car then pulled onto the wrong side of the road. After driving south in a northbound lane for several minutes, the Tesla rammed into a car driven by Christian Malone, 20, who died from the impact. In its response to the complaint, Tesla said “the crash was caused by the negligence and/or recklessness of the driver.”

Trial dates for both cases will be set later next year, Michaels said.

In another case — set for trial in November in Key Largo, Fla. — a Tesla in Autopilot allegedly failed to detect an approaching T-intersection while its driver searched for a dropped phone. The Tesla barreled through flashing lights and a physical barricade before crashing into a vehicle parked on the side of the road, killing a woman and seriously injuring a man.

In court documents, Tesla has argued that the driver was ultimately responsible for the trajectory of the car. Tesla also states in user manuals that Autopilot may not operate as intended “when unable to accurately determine lane markings” or when “bright light is interfering with the camera’s view.”

When these cases head to trial, juries may be asked to consider whether Tesla’s many driver warnings are sufficient to spare the company from liability. Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, said the last thing the company needs is a highly publicized courtroom battle that focuses attention on such questions.

At a trial, “the defense would dig into the weeds … and it would become very clear that the perception of the Autopilot software was very different from the reality,” Gerber said. “Every day would be a headline, and it would be embarrassing.”

So far, Tesla has faced a jury only once over the role Autopilot may have played in a fatal crash. In Riverside, Calif., last year, a jury heard the case of Micah Lee, 37, who was allegedly using Autopilot when his Tesla Model 3 suddenly veered off the highway at 65 mph, crashed into a palm tree and burst into flames. Lee died from his injuries, while his fiancée and her son were severely injured.

Due to the extensive damage to the car, Tesla said it could not be proved that Autopilot was engaged at the time of the crash. During the trial, Michael Carey, the attorney for Tesla, argued the technology was not at fault, and that the crash “is classic human error.” According to a toxicology report taken after the crash, Lee had alcohol in his system but it was within the legal limit in California.

“This case is not about Autopilot. Autopilot didn’t cause the crash,” Carey said during opening statements. “This is a bad crash with bad injuries and may have resulted from bad mistakes — but you can’t blame the car company when that happens. This is a good car with a good design.”

Ultimately, Tesla’s arguments prevailed, and a jury found the company not liable.

But the company appears to face headwinds in some other cases. Last year, Florida Circuit Judge Reid Scott upheld a plaintiff’s request to seek punitive damages in a case concerning a fatal crash in Delray Beach, Fla., in 2019 when Jeremy Banner and his Tesla in Autopilot failed to register a semi truck crossing its path. The car plowed under the truck at full speed, killing Banner on impact.

In the ruling, Scott said the family’s lawyers “sufficiently” presented evidence to reasonably seek punitive damages at trial, which could run millions of dollars.

The plaintiffs’ evidence included that Tesla “knew the vehicle at issue had a defective Autopilot system,” according to the order. Citing other fatal crashes involving Autopilot, Scott wrote that there is a “genuine” dispute over whether Tesla “created a foreseeable zone of risk that posed a general threat of harm to others.”

Tesla’s appeal of the ruling is pending.

Change in defense strategy?

As the spate of lawsuits churns forward, Tesla has shown a fresh willingness to settle such cases — despite Musk’s vow on Twitter in 2022 to never settle “an unjust case against us even if we will probably lose.”

In addition to settling the Huang case, Tesla “indicated” that it was open to discussing a potential settlement in the Riverside case as it was being presented to a jury last fall, said Michaels, the MLG lawyer who represented Lee’s family.

The month-long trial featured testimony from an accident reconstructionist, a top engineer at Tesla and a paramedic who responded to the crash and said it was among the most horrific crashes he had ever seen. Michaels said he declined to engage in settlement talks because he wanted to continue to “make this a really public issue.” He said he also “did not have confidence in our ability to come to an agreeable amount.”

Tesla and its lawyer in the case, Carey, did not respond to a request for comment.

After four days of deliberations, the jury decided the case in Tesla’s favor.

Though he lost, Michaels said the trial attracted media attention and gave other lawyers with cases against Tesla insight into the company’s defense strategy. Plus, he said, his law firm’s phone has since been blowing up with potential clients.

“We walked away from guaranteed money,” Michaels said, “but that wasn’t what it was about.”

Van Dairy pulls pins as last slice of once-vast Tasmanian dairy farm Woolnorth put up for sale

ABC Rural Van Dairy pulls pins as last slice of once-vast Tasmanian dairy farm Woolnorth put up for sale

• In short:  The remaining parcel of an historical dairy farming property in Tasmania's far north-west hits the market this week.
• The farm was once Australia's largest dairy operation, but has been mired in controversy and been the subject of a senate hearing in foreign investments since its 2016 sale.
• What's next?  Senator Peter Whish-Wilson has urged the state or federal government to purchase the property to preserve its history.

The remaining slice of a 200-year-old farming property in Tasmania's north-west is up for sale, following years of controversy, unrealised grand ambitions, allegations of animal cruelty and mismanagement, and the recent loss of a major milk contract.

The property last sold in 2016 for $280 million in a contentious purchase to a Chinese investment company after an eleventh-hour bid that staved off two rival bids by Australian companies.

The sale  required signing off by the Foreign Investment Review Board , headed by then-treasurer Scott Morrison.

At the time of its sale, it was the largest dairy operation in Australia, spanning a vast 143,500 hectares, milking 17,890 cows over 7,062 hectares.

On Monday, billionaire Chinese businessman Xianfeng Lu announced he would sell off the last 9,500 hectares of his landholdings at remote Woolnorth.

"It is with disappointment that I will be placing our remaining landholdings of Woolnorth on the property market, in anticipation of the expiration of our long-term milk supply agreement," he said.

"It has been an honour to be the owner and custodian of one of Australia's most important historic agricultural properties."

The sale follows news that New Zealand dairy giant Fonterra cancelled its 25-million-litres per year milk contract with Mr Lu's company, Van Dairy Ltd, formerly Moon Lake Investments, in February after a number of unresolvable commercial factors.

In the wake of the announcement, the ABC understands Mr Lu sent thousands of dairy cows to the nearby abattoir for slaughter. It was widely reported at the time that about 700 cows were killed, but sources have confirmed that number to be much higher.

Plan was to fly fresh milk to China

Initially, Mr Lu had a grand plan to fly millions of litres of fresh Tasmanian milk to Chinese consumers in Ningbo, Shanghai, Hangzhou and Beijing.

That did not eventuate.

The sale was supported by the then-federal treasurer Scott Morrison, who said the investment commitments from the buyer would result in more jobs in Tasmania.

Mr Lu's approval from the Foreign Investment Review Board to buy the property was subject to five conditions, including employment in the area, investment in infrastructure and environmental projects.

However, the conditions were a voluntary agreement and were not met, which later led to calls to toughen the board's powers.

In 2021, Mr Lu announced plans to build a milk powder processing plant at Woolnorth, which would then be packaged at a Burnie factory the company bought. The application was withdrawn in 2023.

Again in 2021, Mr Lu said he would put aside 1,800 hectares of land for Tasmanian devil conservation.

It is unclear what happened to that land in subsequent sales.

Former chief executive of Moon Lake Investments, Evan Rolley, joined the company with high hopes.

"A board was appointed with a lot of expertise … an excellent team of 25 dairy managers, it was all set," he said.

"There were all these commitments made, but unfortunately, none of that transpired."

Case study of 'what not to do'

A critic of Van Dairy's ownership, Greens Senator for Tasmania Peter Whish-Wilson, said the property became a case study in "what not to do" for a Senate inquiry into foreign investment proposals.

"They made undertakings that they would spend $100 million in capital upgrades," Senator Whish-Wilson said.

"What we found five or six years later was that the investor hadn't spent the money that they promised.

"These undertakings were voluntary, so couldn't be enforced under our Foreign Investment Review Board laws. So that needs to change."

As the years rolled on, the property became subject to numerous reports and investigations into allegations of effluent management issues and animal cruelty, as well as the mass resignation of its board members in 2018.

Mr Lu denied any cruelty but confirmed a 2021 audit had found 83 per cent of the company's 23 farms had failed to comply with the Farm Dairy Premises Effluent Management Code of Practice.

Farmland carved off

Over subsequent years, Mr Lu sold off portions of the property, whittling his holdings down to a final 9,500 hectares.

Last month, a further 700-hectare slice entered the market. It sold for $15 million to Prime Dairy, the dairy arm of Melbourne-based fund manager Prime Value Asset Management.

The current sale, listed by Nutrien Harcourts, includes an historic homestead, an 1830s workers cottage and multiple historic dwellings.

"I personally feel that the state and federal government should consider buying part of this iconic property, especially the original homestead," Senator Whish-Wilson said.

"It's an ark and a refuge for the Tasmanian devil, there's enormous potential for this to be a tourist attraction in a part of the world that does need jobs.

"I think the key lesson that we need to learn is that this part of Tasmania may not be suitable for intensive dairy farming."

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