1. Describe how large, complex organizations such as 3M can develop large, complex supply chains. Does this situation occur by accident? By design? Support your answer.

2. Describe the advantages of 3M using super hubs.

3. Describe disadvantages of 3M using super hubs.

4. Is 3M experiencing the bullwhip effect in this case? Why or why not? Support your answer.

CLOSING CASE 23M Deals with Supply Chain Problems 3M (www.3m.com) manufactures 65,000 products, ranging from adhesive tape to film for solar energy panels to dentalHefe's largest site in China. braces. It makes these products in 214 plants located in 41 countries. Over the years, 3M had developed extensive and n Command hooks at a super hub located in Hutchinson, highly complicated supply chains for many of its products. cost of 1 billion yuan (S16.3 milion), and it will become 3M In 2010, 3M consolidated the steps involved in produc- Minnesota. This plant also produces adhesive tape, Nexcare One reason why the supply chains became so compli- bandages, furnace filters, and other ttems. In sddition to cated was the company's risk-averse culture. Specifically, the creating finished Command products for the Americas, the culture at 3M is "make a little, sell a little." That is, the com- pany does not purchase new machinery and/or construct plants until a prodact has proved itself in the market. Instead foam to Singapore and Poland, where they are tailored for Asian and European markets, respectively. The cycle time for making Command has dropped from 100 to 35 days 3M product developers utilized existing machires and expertise even if they were located hundreds of miles away. This strategy enabled 3M to keep its ma chinery running around the clock, thereby achieving efficiency, It also resulted in higher shipping costs and longer centraized in a plant in Columbia, Missouri. The cycle time for this product has fallen from 165 to 50 days. Sources: Compiled froen B. Ferark The Paradigm Shift Towards tUS CMatten, September 3. 2013 M. Chenguang and Z Tan 3M es Yuan Super Pann, Chine Daily June 13, 2013 Glebal Supply Chain Leaders to Discas Reducing Cost and Improving Performance at 2013 Lets take a look at two 3M products wth convoluted fclence Alley Coeference Modairy Neui, Ocnober 3i. 201x s cat. supply chains Command picture-hanging hooks and Littupply Chale DisrptioeaMajoe Threat to Business Forbe February 15, 2013; A. Saltaata, reating a Supet Hub. Pakaging Eampe, Fbruary 4, 2013"3M to Establish Super Hub in Turkey" Hurriyet Daily News, 3Ms Command picture-hanging hooks are made of Ober 10202 dustrial Galant 3M on Mission to Remeve lts Supply plastic and strips of sticky foam. and they do notlook com- Chain "Haitallsr Supply Chain D gert hane 2012. I Hagerty, 3M plicated. However, as recently as 2010, the Command pro Beges Untangling duction process literally stretched more than 1.300 miles MT through four factories in four U.S, states. The process began 15,2014 Tedinology Review, January 27,2010 www. 3m.com,acesed March at 3M plant in Springfield, Missouri, which made the adhesives. The plant then shipped those adhesives about 550 miles to a 3M plant in Hartford City, Indiana, where they were applied to polyethylene foar.. Next, the foam was shipped 600 miles to a coatractor's plant near Minne apolis, which imprinted the product with the 3M logo and sliced it into the standard sizes. Finally, the product was trucked about 200 miles to central Wisconsin, where another contractor bundled adhesive foam with plastic hooks and enclosed the prodact in blister packaging Littmann stethoscopes also had a convoluted supply chain. Until recently, the stethoscopes were produced in stepe 4. Is 3M experiencing the bullwhip effect in this case? Why or why not? Support your answer involving 14 outside contractors and three 3M plants When 3M became aware of these problems, it developed strategic plan to simplify its supply chains, both to reduce costs and to increase fleaibility in its manufacturing processes and along its supply chains. Loag, convoluted supply chains increase inventory costs because each separate production stage maintains a buffer stock of uninished items to cope with any disruptions in the flow from another plant or from sup pliers. Holding that inventory is expensive in terims of space and cash spent for materials waiting to become menchandise 3M set out to sperd up production for in-demand products and to avoid convoluted supply chains 3M has also developed 10 larger, more efficient plants, called super hubs, that are capable of making multiple prod- ucts for a particular reglon of the world. Six of these hubs are located in the United States, and the remaining four are sita ated in Singapore, japan, Germany, and Puland. By moving production closer to its customers, 3M can reduce shipping costs and currency risks while customizing its products to match regional tastes, Essentially, 3M wants to improve ethi ciency in the manufacturing of its major products. To accom- plish this goal, the company plans to reduce cycle tises the period needed to complete the entire manufacturing process from ordering raw materials to delivering finished goods-by 3M Hefei, a ranch of 3M, plans to become a super manufacturing hab for the US. company, with the capacity to make variety of products. 3M currently relies on 10 single- product sites around China The new plant is being built at