Porter's Forces Model & Generic Competitive Strategies

1

Group 12

Completed During Milestone #6

Group 12 decided to interview and research the Minnesota Mining and Manufacturing company (3M) for this paper. We decided on 3M because our team member, Mr. Hersey McCulloch, currently works as an engineer in the Industrial Mineral Division at the 3M Little Rock, Arkansas plant facility. Mr. McCulloch was able to provide in depth knowledge of the core processes at the local facility and companywide within the United States, as well as interview access to 3M’s Chief Information Officer, Mr. John Turner. Additionally, 3M is currently undergoing a massive business transformation (BT) from its legacy Information Systems (IS) to a new Enterprise Resource Platform (ERP), SAP. We felt this was an excellent example of how businesses utilize IS to support their primarily business processes.

The following sections present an overview of the 3M organization, the focal business processes we analyzed, and the associated supporting IS. We primarily focused on the legacy systems at the Little Rock, Arkansas plant, as well as the current BT to the new ERP run by SAP.

The Minnesota Mining and Manufacturing company (3M) is a publicly-traded, multinational manufacturing company that began in 1902 in Northern Minnesota (3M, 2019). According to 3M (2019), the company started as a small-scale mining venture that grew into a global powerhouse to improve the lives of people around the world. 3M applies science to solve problems and meet customer needs by following the mission statement, “we explore, we connect, and we invent.” Their mission is executed through five (consolidated to four in March of 2019) business groups: Consumer, Electronics and Energy, Health Care, Industrial, and Safety and Graphics. 3M is an internationally recognized corporation with 90 manufacturing facilities in the U.S. states, and 125 facilities in 37 countries internationally. The company is headquartered in the Unites States in Saint Paul, Minnesota (3M, 2019).

According to 3M (2019) more than 60,000 of its products are used in homes, businesses, schools, hospitals, and other industries. Their products are sold through distribution channels, directly to their users, through wholesalers and retailers, jobbers, and dealers around the world (3M, 2019). In 2018, the company’s annual revenue was $32.8 billion earning it the rank of 97 on the Fortune 500 list of largest U.S. corporations by revenue. 3M is ranked second among its top ten competitors which include Avery Dennison, Corning, and PPG, and employs over 91,000 people in more than 70 countries (Owler, 2019). Figures 1 & 2 provide historical revenue data dating back to 2014, as well as the revenue trend for 2018 (3M, 2019). As noted in Figure 2, revenue declined from the beginning of 2018.

Figure 1: 3M company sales from 2014 to 2018.

Figure 2: 3M quarterly sales and annual revenue.

3M has a substantial presence in manufacturing. The life blood of these operations is the value stream, which looks at the entire process from sourcing raw materials to payment for finished goods. The majority of sites within the 3M manufacturing network employ Lean Six Sigma Black Belts, and Value Stream Managers at the site, and sometimes there are multiple roles of that type assigned to separate departments within the same facility (Turner, 2019). We looked at the 3M manufacturing facility in Little Rock, Arkansas. There they manufacture roofing granules of over 22 different colors and value stream management is supported by a wealth of information systems. Figure 3 shows an example of the roofing granules manufactured at the facility (Addington, 2019).

Figure 3

There are over 30 information systems utilized at and around the Little Rock plant to facilitate management of the value stream and customer relationships. The upcoming transition to SAP will consolidate most of them into a single platform. The focus of this paper is the value stream related aspects of order processing and inventory management, and the IT ticket processing system.

Orders placed to the 3M Little Rock plant can be initiated through two avenues. The Customer Service Management System (CSMS) is the most common ordering system and is responsible for more than 80 percent of the orders that are received. The CSMS is structured like a shopping cart system whereas customers log in, fill up their carts, and checkout. The customer is able to tailor the order quantity, delivery date, and several other elements within the stated business rules. That information is then passed to COMS (Corporate Order Management System) where it is sent to production in the form of a work order, which will be produced by the operations team. At each individual 3M manufacturing facility (herein, the plant), the inventory management system allocates finished goods inventories to transportation vessels and fills them with product. From there the information is passed back to the plant to OFO (Order Fulfillment Operations) and COMS for shipping and billing.

The second avenue for order entry is customer specific. Owens Corning is one of the larger companies that buys 3M roofing granules for making asphalt shingles. Owens Corning uses an automated forecasting system to place orders with 3M. Instead of CSMS, Owen Corning uses Vendor Managed Inventory (VMI). The VMI regularly tracks their usage and inventories and sends order forecasts to 3M. These forecasts bypass the normal routing and are almost immediately turned into orders for production. The information is still relayed to the COMS system and OFO for shipping and billing. The next critical component of the process is the finished product itself and it being ready to ship. This is where the inventory management system provides support.

3M Little Rock manages inventory using several information systems that exchange data and information. This is a vital part of the value stream because of the targets they set for DOTIF (Delivery On-Time In-Full). The plant produces an average of 50,000 tons of granule per month, with an inventory capacity of 7,000 tons for finished product. That comes out to at least 7 full inventory turns per month, so failures in the inventory management system can lead to cascading delays for customers. Finished goods are loaded in trucks that can hold a maximum of 25 tons and railcars that can hold a maximum of 115 tons.

Plant operations manages the production reporting through CRM (Coloring Run Manager). The CRM tracks raw material usage, as well as total quantities produced per work order. The finished goods quantities are mirrored in BSM (Blend Shipment Manager). BSM tracks finished goods levels in over 130 tanks and assigns inventory to outbound shipments. Once shipments are loaded, they are passed to OFO, but the history is retained within BSM. Other useful functions performed by BSM are truck and railcar monitoring. 3M Little Rock is capable of loading 80 trucks and 20 railcars on a busy day. For that reason BSM must be accurate and reliable. The system tracks the transport vessels from the time they enter the site to the time the leave. Metrics like load times, wait times, late pick-ups, late loadouts, and inventory on hand are reviewed at least once each day. Figure 4 shows a diagram of the process links (Addington, 2019).

Figure 4

Figure 4: Diagram of the information systems flow

According to Addington (2019), the grey areas in Figure 4 will eventually be replaced by SAP in the next one to two years. This will ultimately create immense efficiencies in communication between facilities, which in turn will improve accuracy and speed associated with order processing, inventory management accuracy, and the IT ticketing system.

In an ever-changing competitive marketplace, it is crucial for firms to have well structured, easy to understand, clear metrics to identify growth, expansion, and overall performance in the workplace. With the integration of IT systems and metrics in everyday activities performed by employees across the company, it is imperative for employees and management to communicate these metrics to all levels of the organization and set the base level of expectations. These established metrics will help identify successes, challenges, and overall company performance. It allows the firm to know if decisions are winning in the marketplace, and if they are not, then why. At the 3M Industrial Mineral Division in Little Rock, Arkansas, performance with the assistance of IT tools is clearly defined through goals and standards outlined in their key performance indicators (KPI’s) presented by top line management and pushed down to all level of employees.

With respect to IT and the utilization of these tools to increase value in the activities performed by employees, as well as to track overall company performance, 3M Industrial Mineral Division utilizes a handful of technology focused key performance indicators (KPIs) to assist in operations quality improvement and increasing customer satisfaction. According to Turner (2019), one KPI used to improve overall customer satisfaction is the CRM system’s Deliveries on Time in Full (DOTIF). This metric has an ambitious goal of 100 percent. To simplify, one may ask the question, “Did the customer get everything they requested, when they requested it?” This tool is cloud based and it is an operations level Critical Success Factor (CSF). Customer satisfaction resides at the core of all 3M’s operations. Therefore, maintaining customer satisfaction as the pinnacle of KPI’s shows the criticality of this component (Turner, 2019).

Turner (2019) notes a second tool that is tracked through metrics at 3M’s Industrial Mineral Division is a ticketing system for issues presented by customers to the company due to service level attainment issues such as delivery, quality of product, and any other concerns. The goal of this KPI is to respond to a minimum of 80 percent of these customer tickets within 24 hours, and have a ticket completed and resolved within 48 hours. Although it is pertinent to the industrial mineral division, this KPI is managed by a companywide team located at their corporate facility located in St. Paul, Minnesota (Turner, 2019).

Finally, Turner (2019) provided a third KPI metric used to track performance using a 3M proprietary tool called COMS, which serves as the primary ordering and invoicing system. This system will be replaced with a SAP module in the near future; however, integration for the new tool will require very precise implementation to avoid interruption in the ordering and invoicing system. This system has precise business rules that govern and feed out order data from this system to the operations plant during established time intervals. However, orders may be requested outside of these governing business rules and entered manually through an electronic data exchange (EDI). This critical success factor is also maintained by a companywide team located at 3M’s corporate headquarters (Turner, 2019).

Maintaining and accurately monitoring the critical success factors in 3M’s Industrial Mineral Division is critical to identifying opportunities, challenges, and successes in the division. These metrics will identify whether the firm was successful, or not, and serve as the drive of all levels of everyday operations. Adhering to these key performance indicators and their attached goals allows 3M Industrial Mineral Division to continue to grow and enhance the overall customer experience.

According to Addington (2019), the infrastructure and architecture requirements at the 3M Little Rock, Arkansas facility leverages at least 90 or more local workstations connected to various servers throughout the business. There are over 10,000 internal communications to the various servers that run the business applications scattered across the different facilitates in the United States. 3M requires a high security network infrastructure that uses a Virtual Private Network (VPN) for employee access inside and outside the company network. As part of their daily operations the 3M Little Rock, Arkansas location currently employs seven servers used solely for storage purposes with a combined capacity of 12.5 Terabytes (Addington, 2019). To put this in perspective, if the average song is 3 to 6 megabytes (Mb) the on-site server has the capacity to store 2.5 to 4.1 million individual song files. Addington (2019) estimates 3M requires at least a Petabyte of storage capacity to manage 3M’s facilities in the United States.

Finally, Abbington (2019) indicated that the 3M Little Rock, Arkansas facility servers leverage a 10 Mb fiber connection to another 3M facility for data replication purposes. These processes are leveraged to ensure business continuity in the event of a hardware failure, data corruption issue, or any other issue that would warrant restoring their data from a backup.

3M’s infrastructure needs are massive. Not only does 3M’s operations require stout network capabilities to link their facilities together, but they also require very powerful servers with access to large amounts of storage capacity. 3M’s business has not transformed thanks to these computer systems, but now depend on them to ensure continued successful operations for all of their business functions.

According to Addington (2019), 3M’s Information Technology department is organized into two broad groups, the corporate department and local departments that support each individual division (plant or distribution center). Both groups support 3M’s order processing, inventory management, and IT ticket processing. The corporate IT department handles all applications at the SAP level, while on-site IT departments handle specific local applications used at the division level. Additionally, both the local and corporate levels may outsource some of their IT support, particular when it involves large-scale build outs or programming issues. 3M’s IT Ticketing System is primarily managed by the corporate IT department, but tickets may be assigned to the local departments depending on the type of issue or application involved (Addington, 2019).

As noted previously, 3M is currently in the middle of a major business transformation from its legacy systems to a new Enterprise Resource Platform (ERP), SAP, which will encompass the order processing, inventory management, and IT ticketing systems. According to Mr. John Turner (2019), 3M CIO, corporate leaders are pushing to have all software and applications continuously upgraded using the AGILE methodology. Upgrades and troubleshooting are handled by the most qualified personnel within the applicable IT department (i.e. corporate or local). However, major application issues or large-scale build outs are completed in coordination with an outside consultant. In contrast, the legacy systems had a few dedicated team members who were responsible for system maintenance and upgrades (Turner, 2019).

As 3M undergoes its BT, the firm faces unique challenges associated with the transition. Most notably, 3M needed to build an integration layer, known as MIL, to permit each plant and distribution center to communicate with SAP during the transition without going out of service (Turner, 2019). Additionally, VMI, the link between orders sent between COMs and the plants, was initially mismatching order dates (i.e. promise dates, order dates, load dates, etc.) (Addington, 2019). In this example, local IT personnel at the plant level created temporary fixes via programming scripts while broad programming solutions were developed at the corporate level.

As the firm navigates through its BT, 3M must rely on constant and effective communication between the localized and corporate IT departments. The local IT divisions identify and communicate issues to corporate and develop fast, temporary solutions, while the corporate IT department develops a permanent solution. The ultimate goal is to integrate all operations, information, and order processing into SAP. This will ultimately reduce order error, increase efficiency via improved inventory management, and improve customer service.

Located a few miles southwest of the Bill and Hillary Clinton Airport in Little Rock, Arkansas is the 3M roofing granule processing plant. Camp-Hays & Toland (2019) indicate that 3M Little Rock strives to provide roofing granule products to their customers with the highest levels of quality, flexibility, and service. The granule plant is where 3M adds the greatest value to the value stream; however, the supply chain starts three miles west of the main plant at the 3M quarry. Roofing granules require crushed rock as the primary input. Initially the quarry was located at the granule plant itself when it opened 70 years ago, but it was determined that there was not enough suitable rock at that location, so it was moved to the current location (Camp-Hays & Toland, 2019).

According to Camp-Hays & Toland (2019), the quarry is owned and operated by 3M, and is more than 2,500 acres, making 3M one of the largest landowners in Little Rock and the state of Arkansas.  

The rock is blasted off in sections and then hauled using 26-foot tall trucks, to be crushed on site. The rock is a naturally occurring resource and therefore is subject to variation. The rock is graded after blasting as A, B, and C stone. Grade-A rock is the only input suitable for use in roofing granules and must meet a required set of standards related to the hardness, porosity, mineral composition, color, and other factors. By itself grade-A rock is not of great value; however, its value to the roofing granule manufacturing process increases due to the scarcity of the precise type of rock required. The rock is not easily substitutable, and products that imitate it are costly and/or have a shorter lifespan. The quarry is a clear source of strategic advantage due to these factors. To protect this strategic advantage, 3M employs geologists that conduct surveys and establish mine plans using 3D drone modeling to ensure a stable supply of resources as far as 40 years into the future.  The B and C grade stone are sold to the Arkansas Aggregates Company, which repurposes or processes it for use in road construction and several other areas which reduces management costs for unsuitable material. From there, the grade-A crushed rock is transported, using a railroad system owned by 3M, to the granule plant (Camp-Hays & Toland, 2019).

Figure 5: 3M Quarry in Arkansas

Camp-Hays & Toland (2019) report that the granule plant maintains at least a three to four-day supply of raw rock on site should an interruption in the supply from the quarry occur due to flooding or other factors. Next, the rock is crushed, screened, coated with a proprietary pigmented ceramic coating, fired in 1,200-degree Fahrenheit kilns, and post-treated with additional compounds, prior to being placed in finished goods inventory. Total demand is forecast; however, with over 23 different products, demand for raw material inventories are not managed for a specific product. Monthly meetings with the account manager are used to help gauge the overall market direction and receive feedback from customer visits. 3M Little Rock takes advantage of a local warehouse to minimize onsite inventory costs and unsure accurate supply even during periods of interruption from upstream suppliers. Enough raw materials are warehoused to allow for extraordinary lead times on most products. The inbound materials buffer allows ample time for the plant to respond to changes in demand without interrupting production. 3Ms competitors often set fixed run schedules weeks in advance and customers must wait their turn if they need a specific product (Camp-Hays & Toland, 2019). 3M is customer centered and sets their production schedule according to customer needs, while also allowing for added complexities required by each unique client.

3M Little Rock ships over half a million tons of finished product to over 30 locations in the United States via rail and truck (Camp-Hays & Toland, 2019). In order to maintain their target of 100 percent On Time in Full (OTIF) shipments, careful attention must be given to promised dates (the date the customer is promised to receive the product), shipment dates, and inventories. According to Camp-Hays & Toland (2019), this is accomplished through an Information Systems (IS) network of several applications, including Blend Shipment Manager (BSM), which manages the Little Rock plant’s finished goods inventories. BSM also communicates certificate of analyses (COA) and bill of materials (BOM) data to COMS to ensure the customer receives all the required documentation with the finished product upon delivery. Additionally, testing is conducted on the product as it is produced, and each individual shipment is also tested prior to shipping. These results are passed along to the customer upon receipt to certify to the customer the quality of the product (Camp-Hays & Toland, 2019).

Figure 6: List of 3M’s Top Customers and Delivery Location

Historically, 3M Little Rock experienced problems with deliveries and pick-ups. Customers were scheduling their own trucks and often those trucks were missing pick-up times, cancelling orders without notification, and showing up late attempting to charge demurrage. In response, 3M decided to coordinate the majority of shipments internally by hiring a private contractor and scheduling trucks for deliveries for their customers. This provided 3M the ability to directly control quality of service issues with the carrier responsible for deliveries and drive down costs associated with schedule compliance issues. However, 3M experiences other issues with deliveries related to general problems associated with the trucking industry. The industry is under-staffed and unable to meet modern transport needs of consumers and businesses (Patton, Townsend, & Bloomberg, 2019). This causes delays in delivery times and increased delivery costs due to a shortage of drivers.

In response, 3M Little Rock has positioned itself to negotiate competitive contract rates (i.e. bargaining power) and generates enough volume to keep transport costs down (i.e. economies of scale). 3M also utilizes trains as an alternative transportation option. However, railroads have become increasingly less flexible and small interruptions to the railroad company can cascade into huge delays for 3M’s deliveries. Further, many of 3M’s customers are not capable to receive rail shipments, which reduces 3M’s bargaining power if rail is the only option for delivery.

According to Porter’s Five Competitive Forces framework, there are five separate components utilized to analyze a firm’s competitive environment that will dictate how efficient and effective a firm is able to combat its rivals, potential new market entrants, the threat of potential substitute good and services in the marketplace, the bargaining power of buyers at the negotiation table, and on the flip side scenario, the bargaining power suppliers have at the negotiation table as well (Martin, 2018). In order for 3M’s Industrial Mineral Division to supersede the competition in the marketplace and show profitability year over year, 3M must strategically attack every one of Porter’s Five Competitive Forces.

3M is known as pioneer in research and development of new technology and innovative development of products in the marketplace; the Industrial Mineral Division is not the exception. In order for 3M to effectively combat current rivals and potential new rivals, a top-level strategy must be in place. Currently, 3M Industrial Mineral Division has one strong competitor named Owens Corning. This firm, Owens Corning, is also producing a very similar product that is designed to replace the usage of 3M’s granule with GAF (Global Home Improvement, 2013). With a product so similar to 3M’s characteristics, the deciding factor will reside in the ultimate quality of the product combined with the appropriate marketing mix to support this product in the marketplace. Although 3M serves as the pinnacle of product quality and innovation and in most other divisions in the company the threat of new competitors is elevated, in the Industrial Mineral Division the elevated costs and conditions needed for a firm to enter into this space make it difficult for new entrants to meet the customer demands that 3M has mastered and continuously executes (Moor, 2018). In order for a firm to enter this space and match up to the likes of 3M, a firm must have the technological and logistical distribution channel capabilities to efficiently create the raw material mix for their products. This process involves crushing rocks, transporting the raw material from plant to plant, and cooking it at an estimated 1,000 degrees Fahrenheit. Most of 3M Industrial Mineral Division’s primary focus revolves around producing the roofing material compound found in customary shingles.

In today’s environmental focused society, the substitution of 3M’s product for more environmentally friendly products is a substitution threat to 3M. The utilization of solar panel roofing, metal roofing, and concrete clay tiles instead of shingles produced using 3M’s material mix are contenders as threats of substitute goods under Porter’s Five Competitive Forces.

The bargaining power of buyers is the fourth component under Porter’s Five Competitive Forces that must be strategically attacked by 3M in order to remain at its highest level of competition. The bargaining power of buyers remains low in this industry as the mixing material composition of 3M’s products is superior and costs less. With higher inventory turnover rates, incremental quantity orders, and better quality than the competition and higher switching costs, 3M is able to provide a better everyday low cost to their customers than other competitors in this industry; this eliminates the bargaining power from buyers at the negotiation table because a better pricing for a quality product is already being offered (What is Bargaining Power of Suppliers?, 2019).

Finally, the last of Porter’s Five Competitive Forces that must be strategically attacked is the bargaining power of suppliers. Suppliers are willing to provide a lower cost for raw materials if their needs are met. With the capability to purchase larger inventory orders of raw materials from suppliers than most of its competitors, 3M Industrial Mineral Division has the capability of negotiating the best everyday low cost in exchange for first in market products and becoming one of the world’s fastest growing consumer packaged goods preferred supplier. In today’s marketplace, the strength of bargaining powers of suppliers and buyers conducting business with 3M are less impactful than before. 3M is an industry leader and, as such, holds the bargaining power on both ends when conducting business operations.

According to Camp-Hays & Toland (2019), 3M’s manufacturing facility in Little Rock, Arkansas faces two significant threats to their market share in the roofing granules manufacturing industry; (1) intensity of rivalry among existing competitors and (2) substitute products. These forces pose the greatest threat to 3M and are further detailed in the following sections.

Intensity of Rivalry Among Competitors

Camp-Hays & Toland (2019) indicated that 3M’s top rivals in the roofing granules industry include GAF and Lucas Specialty Rock’s (Lucas). Both companies compete directly with 3M in roofing granules production and sell to 3M’s existing customers, most notably Owens Corning. What makes these companies distinct is that they also manufacture asphalt shingles from their roofing granule products. 3M currently only produces roofing granules and sells the final product to manufacturers that create asphalt shingles (Camp-Hays & Toland, 2019). This direct competition and vertical integration on the downstream side of the supply chain by GAF and Lucas poses a significant threat to 3M.

In addition to 3M’s direct competition for customers, the firm is facing a looming threat due to cooperation between GAF and Owens Corning. Camp-Hays & Toland (2019) reported that both their competitor (GAF) and customer (Owens Corning) are working together to develop a replacement for the 3M granule products that Owens Corning currently purchases. If the partnership should succeed, this would not only turn Owens Corning into a direct competitor and potential lost customer, but it would create an additional substitute product, which is discussed later in this section.

In response, 3M is leveraging its vertical integration of the main raw material for their granule product and its custom-made products for Owens Corning in an effort to raise the switching costs too high for Owens Corning to ditch 3M (Campy-Hays & Toland, 2019). Specifically, Camp-Hays & Toland (2019) indicated that only a particular type of rock can be used to create the raw material needed to produce the granules, which is extremely difficult to find, mine, and refine. As such, 3M has vertically integrated its supply chain to ensure it has direct access to quarries with the specific rock needed to create granules, which ultimately gives 3M control over the supply of this particular raw material (Camp-Hays & Toland, 2019).

Additionally, customers are reliant on specific shades of granules in order to maintain quality and uniformity in their roofing shingle products. According to Camp-Hays & Toland (2019), 3M has developed a process of blending colors for their customers in order to provide a consistent product. Ultimately, this practice has made their customers more reliant on 3M’s product as their customers may be unable to switch to another supplier without compromising their end product (Camp-Hays & Toland, 2019). As such, if GAF and Owens Corning are unable to develop a substitute to 3M’s granule that can deliver the same results, 3M may be able to squash this threat. However, 3M must continue to refine its blending process to ensure its product remains superior.

Threat of Substitute Products

The threat of substitute products also poses a significant threat to 3M. According to Camp-Hays & Toland (2019), solar, metal, and concrete tile roofing products are the main substitute products that consumers may choose over asphalt shingles. These materials do not utilize roofing granules to manufacture and offer different benefits and disadvantages than asphalt shingles.

Specifically, these substitute products last longer than asphalt shingles but are more expensive per square foot or may involve higher maintenance expenses after installation (Morr, 2018). For example, Figure 7 (Morr, 2018) shows the average cost per 100 square feet of asphalt shingles versus concrete and metal. Although asphalt shingles are less expensive, concrete and metal materials will last at least twice a long (Morr, 2018). Additionally, substitute products offer energy saving advantages that asphalt shingles to not provide (i.e. power generating and cooling).

Figure 7: Average Cost of Various Types of Roofing Materials

Although asphalt shingles remain the dominant roofing material for buildings, the usage of asphalt shingles has reduced from approximately 83 percent to 75 percent between 2004 and 2015, with metal increasing to almost 10 percent in the same period, as shown in Figure 8 (ProRemodeler, 2017). As such, 3M faces the potential of decreased demand for roofing granules as substitute products continue to advance, reduce in price, and provide desirable advantages.

The substitute products noted above represent a current threat to 3M’s roofing granules manufacturing business. In response to growing popularity in substitute products, 3M is producing new granules that can help reduce smog pollution, provide cooling properties to increase building energy efficiency, and prevent the build-up of algae on rooftops (3M, 2019). Therefore, 3M is reducing this threat by providing asphalt shingle manufacturers the raw materials to match the properties of the substitute products that are threatening 3M’s business.

Figure 8: Share of Roofing Materials for Construction

The following sections discuss 3M Little Rock facility’s value chain. Information was provided by an interview with Camp-Hays & Toland (2019).

Inbound Logistics

3M sources base materials to produce their granules from multiple locations across the world. The base for all the granule products is natural ingenious rock which can be found and sourced from domestic and international underground hard rock miners across the world including its own on-site quarry. Other entities are also used to supply product packaging, as well as ceramic which is embedded into various product lines.

Operations

3M Little Rock’s operations include quarrying, crushing, screening and coating the various granules produced onsite. To differentiate itself, 3M is continuously improving its operations by implementing six sigma, lean management concepts and committing to environmental, health and safety efforts leading to not only a more efficient operation but also a safer environment.  3M relies on business intelligence reports based on information tracked by the firm’s KPIs, energy usage statistics, waste information, and target versus actual production information. This information is then used to make data-driven decisions to ensure continuous, safe operations of their facility.

Outbound logistics

The 3M Little Rock facility provides outbound logistics capability to its suppliers via railcar, bulk trucks, and bags. These products are sent to various shingle manufacturers in the United States that include, but are not limited to, Gerard, Owens Corning, Atlas, and Certain Teed.

Marketing and Sales

3M is beginning to leverage social media, as well as traditional press, to market its granule products. Traditionally, 3M markets their products online by providing technical data sheets and color guides, as well as attending trade shows. Their National Account Managers regularly meets with their customers to assure that 3M is meeting their needs, and also requests feedback via scorecards. According to Camp-Hays & Toland (2019), 3M Little Rock’s sales territory includes 14 different states in the south and southeastern United States. 3M’s trademarks and marketing intellectual property are also used by its suppliers to market the finished products created with 3M products.

Services

3M Little Rock brings value to its customers by providing and distributing regular roofing granules, algae resistant granules, and even aggregate rock for road base or landscaping (3M, 2019).  3M also provides emergency support that allows orders to be fulfilled in as little as 48 hours. To ensure that their service is meeting the needs of their customers, 3M maintains an open chain of communication with customers providing opportunities for constant customer feedback.

Firm Infrastructure

More than 30 systems are used together for daily operations. CSMS provides an online b2b ecommerce platform to its customers. Data is then fed into COMS, which sends the order information to the operations side to be fulfilled. 3M Little Rock also employs multiple systems such as CRM, which tracks inventory used in producing the different types and colors of granules. This information is also tied to a Blend Shipment Manager (BSM), which acts as a historian for finished goods. The information in BSM is critical for outbound logistics to allow 3M to serve its customers accurately and on time. In the near future, 3M will also employ a new ERP, SAP, which will add additional value into the Customer Relationship Management and operations processes of the business. SAP customers have reported profit increases of up to 60 percent (SAP, 2019).

Human Resource Management

3M leverages the platform named Workday for Human Resources (HR) management. 3M Little Rock engages in a practice of contracting out initial hiring and may offer new employees a permanent position as a hourly worker after 3 to 12 months of tenure. Salaried employees are trained and onboarded in line with their position and duties, there is a required compliance training schedule that is updated and completed by all employees each year to assure that employees understand the rules and organizational goals. This training also aims to enforce organizational behaviors and positive psychological practices

Technology development

3M is actively searching out new ways to deliver products and services to its customers more efficiently. The Little Rock Arkansas facility is using technology develop new ways to mine raw materials sustainably to protect the environment. Additionally, the Little Rock facility uses continuous improvement methods to improve the design of their production processes and control mechanisms used to develop their industrial mineral products. Examples include Cool Roofing Granules that reflect heat instead of absorbing it, allowing their customers to have more energy efficient properties. Another example is Smog-reducing Granules that help eliminate smog pollutants to improve air quality (3M, 2019).

Procurement

To ensure consistency and quality, 3M’s procurement regularly reviews their suppliers and rates them to determine if there are areas of potential improvement, or if an alternative should be explored. With many of their materials being sourced globally, many factors come into play that require 3M to consistently review this information to ensure the business can successfully turn inventory into quality products.