Originally dubbed the Minnesota Mining and Manufacturing Company, the company we now know as 3M first made its mark manufacturing sandpaper. Since then it has evolved into a multinational conglomerate corporation focused on the development and production of industrial, worker safety, US health care, and consumer goods products. 

By 2012 3M was one of the 30 companies included in the Dow Jones Industrial Average. However, in recent years, 3M has suffered (many argue, unfairly) as a result of the trade war between the U.S. and China. 

In 2018, 3M’s new CEO at the time, Mike Roman outlined the company’s 5 year transformation plan. Focused on four key priorities – Portfolio, Innovation, Transformation, and People and Culture – the goal was to position 3M for long-term growth and value creation. 

Here’s a look at what this digital transformation initiative has accomplished so far and where it is going next in the post-pandemic world.

The Trials, Tribulations & Triumphs of 3M’s Digital Transformation

Fast forward to 2019 and 3M launches PACESetter, an acronym for proprietary process technology, automated processes, connected data, efficiency, and safety and sustainability. The goal of this initiative was to support 3M’s various product lines to optimize and digitize manufacturing processes. 

For example, the Film and Material Research Division (FMRD) team built its own “factory-of-the-future.”  As Robert Sentz, FMRD manufacturing technology engineer explained to Smart Industry, "For us, one of our four key initiatives was batch automation and advanced control programming, which is key for operations, safety and productivity. Our second initiative was process analytical technology for real-time process analysis of our chemistries and processing. Our third initiative involved workflow and providing an operator-guided work experience—standard work. Our fourth initiative was related to reliability/analytics to extend the life of our equipment."

A few months later in January 2020, 3M announced it was entering the next phase of its transformation centered around developing a new global operating model and streamlined organizational structure. According to the official press release, the goal of this phase was to:

• Consolidate manufacturing, supply chain and customer operations into a new Enterprise Operations organization focused on optimizing the customer experience end-to-end
• Create a new global Corporate Affairs organization focused on advancing and protecting the company’s brand and reputation in all areas of the world
• Realign all existing corporate functions to drive more effective operations across geographies.

As a result of these actions, 3M expected to reduce headcount by approximately 1,500 positions, spanning all business groups, functions and geographies. As a result of this alone, the company expected annual pre-tax savings of $110 to $120 million.

To support these initiatives, 3M launched a number of highly promising digital initiatives:

• The creation of a new Digital Science Center to accelerate the development of healthcare information technology and connected solutions as well as  optimizing global technical, data security, and privacy operations.
• Leveraging the C3 IoT Platform to develop and deploy AI-based applications including predictive healthcare and supply chain analytics 
• Partnering with Palantir to evolve its supply chain alerting, demand forecasting and business planning technology

However, things still did not go exactly as planned. As the COVID-crisis unfurled, demand for some 3M products such as N95 respirators and antiseptic surged while others plummeted. In addition, the company was faced with unprecedented supply chain disruptions, material shortages and market turbulence. 

What Now?

It’s no secret that 3M struggled to effectively produce and distribute critical medical equipment in the early months of the Coronavirus emergency. Despite having invested billions of dollars in technology over the past few years, it's over reliance on historical demand models and a lack of general business resilience planning lead to disaster.

But has 3M learned from its past mistakes? Investors seem to think yes. After sinking to a record lows in 2018 and being dubbed a failing company by some analytics, 3M stock hit a 2 year high in April 2021. As CEO Mike Roman commented, “Our four industry-leading businesses are delivering strong results, while we accelerate 3M's digital transformation and sustainability efforts with significant new goals to improve air and water quality.”

3M’s trajectory highlights the importance of embracing a holistic approach to digital transformation. While cost saving and increased efficiency can result from successful digital transformations, most successful transformations are often about so much more. 

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