3m Case Study

3M Case Study

November 16, 2016

3M Case Study

On January 1st, 2001 3M had announced the election of their newest CEO, W. James McNerney Jr. McNerney had big plans to improve many parts of the company. That same year at the annual shareholders meeting in May, McNerney stated that he planned on strongly implementing Six Sigma into 3M’s business strategies. He had sold many people on this new tactic including the board of directors. He started a large training program for hundreds of senior executives who were in charge of leading the efforts to middle managers. He also made it critical that the senior executives come up with 100 key six sigma projects to help in improving the company. Many managers thought that the company was already efficient and that it was a quality company, but financially 3M had not seen any growth and that its overall financial performance had gone “flat”.  The biggest question as a result from this was how to use the Six Sigma program as pivotal point for the improvement of 3M.

        Six Sigma program at 3M would focus on primarily on process improvement and 3M acceleration. More specifically, 3M had established initiatives focusing on Six Sigma, E-productivity, Supply, and Indirect Costs. These four initiatives were established in order to target areas in which the company would significantly benefit if improved.  With McNerney’s primary focus on Six Sigma, the company established its own. Its simplistic approach to Six Sigma was: The Right Project + The Right People + The Right Roadmap and Tools + The Right Support = The Right Results.

After his election to CEO, McNerney implemented many changes to the company. More importantly, he implemented Six Sigma into 3M’s business strategies. With his additions and implementations to the company, McNerney cut capital expenditures from $980 million to $677 million. This also allowed for sales to grow to $21 billion and profits grew by 22% per year for his four year term as CEO. In 2005, McNerney left 3M to become the CEO of Boeing.

McNerney’s implementation of Six Sigma to 3M was deemed successful at the end of his time as CEO for 3M. The biggest issue faced with the implementation of Six Sigma in 3M was getting employees to adapt to it. In the beginning, many employees were content with the overall status and performance of the company. Aside from this, there was also many skeptics of Six Sigma and its benefits.

However, Six Sigma offers many benefits, especially to 3M. With Six Sigma, it forces you to constantly collect data and back things up. This essentially creates a stronger and more accurate collection of data, decreasing the chance of error down the road. It also provides a single approach and a common language to improve communications and how things get done in the company. It also increases financially stability and improvements that can be seen. This especially aided in the process of increasing financial growth since there was minimal growth in the past. Six Sigma allows for benefits to be gained and seen by employees, customers, and as well as shareholders/investors. Six Sigma’s role in a corporation is ultimately to create a more efficient and prosperous company than what it was previously established as.