Table of ContentsExecutive Summary2Introduction3Organizati.docx

Table of Contents
Executive Summary2
Introduction3
Organizational Overview3
Focal Business Process and Supporting Information System5
Order Processing6
Inventory Management Systems7
Critical Success Factors8
Infrastructure and Architecture Requirements10
Information Management Issues11
Strategic Business Analysis13
Supply Chain13
Upstream13
Downstream15
Challenges Facing the Supply Chain16
Competitive Forces and Generic Response Strategies17
Porter’s Competitive Forces17
Generic Response Strategies20
Value Chain Analysis23
Primary Activities23
Support Activities25
References27
1
Group 12
Executive Summary

Introduction
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. Organizational
Overview
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.
Focal Business Process and Supporting Information System
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.
Order Processing
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.
Inventory Management Systems
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. Critical
Success Factors
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.Infrastructure and Architecture Requirements
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.Information Management Issues
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.Strategic Business AnalysisSupply Chain
Upstream
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.
Downstream
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
Challenges Facing the Supply Chain
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. Competitive Forces and Generic Response Strategies
Porter’s Competitive Forces
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.
Generic Response Strategies
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
Value Chain Analysis
The following sections discuss 3M Little Rock facility’s value
chain. Information was provided by an interview with Camp-
Hays & Toland (2019). Primary Activities 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.Support Activities
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
practicesTechnology 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.

References
3M (2019). 3M Science. Applied to Life. Retrieved from
https://www.3m.com/3M/en_US/company-us/about-3m/history/
3M Logo[JPG]. (2019). St. Paul, MN: 3M News Center.
Retrieved from https://news.3m.com/image/logos-us/3m-lockup
Addington, S. (2019, April 11). ISDS 705 3M IT Interview
[Telephone interview conducted by Hersey McCulloch].
Camp-Hays, L. & Toland, B. (2019, April 16). ISDS 705 Supply
Chain Analyst Interviews [In-Person interview conducted by
Hersey McCulloch]
Global Home Improvement. (2013, October 25). Compare
Owens Corning Duration Shingles vs GAF Timberline Shingles.
Retrieved from CBS Philly:
https://philadelphia.cbslocal.com/2013/10/25/compare-owens-
corning-duration-shingles-vs-gaf-timberline-shingles/
Marr, B. (2015, September 30). Big Data: 20 mind-boggling
facs everyone must read. Retrieved from
https://www.forbes.com/sites/bernardmarr/2015/09/30/big-data-
20-mind-boggling-facts-everyone-must-read/#30eed2e417b1
Martin, M. (2018, September 25). Porter's Five Forces:
Analyzing the Competition. Retrieved from Business News
Daily: https://www.businessnewsdaily.com/5446-porters-five-
forces.html
McKenna, B. (2013, March). What does a petabyte look like.
Retrieved from https://www.computerweekly.com/feature/What-
does-a-petabyte-look-like
Moor, T. (2018, November 28). How Much Does Roof
Replacement Cost? Retrieved from
https://www.angieslist.com/articles/how-much-does-roof-
replacement-cost.htm
Owler. (2019). 3M’s Competitors, Revenue, Number of
Employees, Funding and Acquisitions. Retrieved from
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Patton, L., Townsend, M., & Bloomberg. (2019, March 2).
America's Trucker Shortage Is About to Hit Consumers Where

It Hurts. Retrieved April 17, 2019, from
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ProRemodeler. (2017, September 25). Metal Roofing Gains
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share
The World's Most Admired Companies. (2019, April 20).
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