3M, a product driven company is divided into seven divisions: Health Care, Transportation, Display and Graphics, Consumer and Office, Industrial, Electro and Communications, and Safety and Security Services. Each is responsible for its own manufacturing and marketing facilities, as well as the product lines within it. They also have another division called the Industrial Business Division (IBD). The IBD serves a broad range of industrial markets, from appliances and electronics to paper and packaging (Page 3). 3M’s Canadian IBD has been successfully manufacturing abrasive and adhesive products and now faces a dilemma with the emergence of a new channel to market known as the National distribution channel. Numerous National distributors of items
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In order to restructure the logistics they had to link an incentive program to reduce supply chain costs for large National players as 61% of the supply chain costs were costs of procurement and 36% cost of inventory which signified large room for supply chain savings (Exhibit 5). Also, the transportation and industrial divisions were merged to effectively improve sales and to collaborate in common markets, sales channels, technologies, manufacturing facilities and selling processes that would add value for customers and ensuring IBD to strive in logistic success such as – provide responsive technical support to the end users, offer total solutions and quicker decision making process and standardizing stock keeping units (SKUs), and just-in-time delivery, which are necessary to gain a competitive edge and for an effective supply chain …show more content…
This approach would further improve its logistic/supply chain by quickly accommodating to its customer requirements/expectations, changes in product offerings, etc. IBD should also venture into to manufacturing private labels, which could be a good opportunity for the company to fill up the vacant spaces in the MRO market. This move would not enhance the 3M brand or its market share as the products would not be labeled under 3M, but it would generate sales volumes with private labels and also shows a commitment to a new brand positioning in catering the MRO market at an affordable and competitive price that is in consistent with the needs of National distributors. In addition, IBD could collaborate with independent sales agents for a specific product line by outsourcing their sales force. This approach would reduced IBD’s training cost of sales representatives and eliminate turnovers in sales personnel, these highly experienced sales personnel would have immediate access to the market and possess the general sales skills required to get business, giving IBD an competitive
In order to restructure the logistics they had to link an incentive program to reduce supply chain costs for large National players as 61% of the supply chain costs were costs of procurement and 36% cost of inventory which signified large room for supply chain savings (Exhibit 5). Also, the transportation and industrial divisions were merged to effectively improve sales and to collaborate in common markets, sales channels, technologies, manufacturing facilities and selling processes that would add value for customers and ensuring IBD to strive in logistic success such as – provide responsive technical support to the end users, offer total solutions and quicker decision making process and standardizing stock keeping units (SKUs), and just-in-time delivery, which are necessary to gain a competitive edge and for an effective supply chain …show more content…
This approach would further improve its logistic/supply chain by quickly accommodating to its customer requirements/expectations, changes in product offerings, etc. IBD should also venture into to manufacturing private labels, which could be a good opportunity for the company to fill up the vacant spaces in the MRO market. This move would not enhance the 3M brand or its market share as the products would not be labeled under 3M, but it would generate sales volumes with private labels and also shows a commitment to a new brand positioning in catering the MRO market at an affordable and competitive price that is in consistent with the needs of National distributors. In addition, IBD could collaborate with independent sales agents for a specific product line by outsourcing their sales force. This approach would reduced IBD’s training cost of sales representatives and eliminate turnovers in sales personnel, these highly experienced sales personnel would have immediate access to the market and possess the general sales skills required to get business, giving IBD an competitive