3M has begun untangling the “hairballs” in its supply chain:
3M Co.’s Command picture-hanging hooks, made of plastic and strips of sticky foam, don’t look complicated. Until a couple of years ago, however, the Command production process meandered more than 1,300 miles through four factories in four states.
3M’s recently retired chief executive officer, George Buckley, branded such convoluted production trails as “hairballs.” The 110-year-old conglomerate is still trying to untangle them to wring costs out of one of the world’s most complex manufacturing enterprises.
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The goal is to reduce cycle times — the period needed to go from ordering raw materials to delivering finished goods — by 25%.
Before the war on hairballs, the production process for Command hooks began at a 3M plant in Springfield, Mo., which made the adhesives. Those adhesives were shipped about 550 miles to a 3M plant in Hartford City, Ind., where they were applied to polyethylene foam.
The foam was shipped 600 miles to a contractor’s plant near Minneapolis, where the product was imprinted with the 3M logo and sliced into needed sizes. Then the product was trucked about 200 miles to central Wisconsin, where another contractor bundled adhesive foam with plastic hooks and put the product into blister packaging.
About two years ago, 3M consolidated these steps at its plant in Hutchinson, Minn., one of the super hubs, where Scotch tape, Nexcare bandages, furnace filters and other items are made.
That plant creates finished Command products for the Americas while sending giant rolls of unfinished sticky foam to Singapore and Poland, where they are tailored for Asian and European markets. The cycle time for making Command has dropped to 35 days from 100, Mr. Welsh says.
3M’s Littmann stethoscopes used to be made in steps involving 14 outside contractors and three 3M plants. Now all processes are being brought into a plant in Columbia, Mo. The cycle time will fall to 50 days from 165, Mr. Welsh promises.
Hairballs mean more inventory costs because at each geographically separate production stage a buffer stock of unfinished items is kept to cope with any disruptions in the flow from another plant. Holding that inventory is expensive in terms of space and cash sunk into materials waiting to become merchandise.
Why did 3M let some processes get so complicated? Part of it, says Mr. Welsh, is the company’s risk-averse culture. An old saying at 3M is “make a little, sell a little.” In other words, don’t buy a lot of new machinery and set up plants until a product has proved itself in the market.
So 3M product developers would look around for available machines and expertise even if it was hundreds of miles away. That meant 3M could keep machinery running round the clock more often, gaining efficiency. But it also meant more costs for shipping and longer production cycles. Now 3M’s goal is to ramp up production much faster when it has a hit product and avoid “disjointed supply chains,” Mr. Welsh says.