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
Introduction
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).
E-Commerce
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).
Conclusion
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
Analysis
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 100th 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.
Findings
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
Summary
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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