Two months after reporting that sales sunk 4.9 percent in 2015, diversified manufacturer 3M said it is resolute on reducing overhead and reinforcing its core business to better serve customers and grow profitability, according to President and CEO Inge Thulin.
“Going forward, we remain focused on controlling the controllable, investing for the long term and leveraging our scientific capabilities to create even greater value for our customers and shareholders,” Thulin said during the company's investor day earlier this week.
At the heart of the company's streamlining efforts are three business priorities, which the company initiated two years ago: portfolio management, investment in innovation and business transformation.
3M has "done quite a bit" of work in these areas already, especially portfolio management, according to Thulin, who noted that the company has slimmed down from six sectors to five business groups and from 40 businesses to 26 businesses.
"This is all under the concept of making sure that we can prioritize for the best opportunity, be more relevant to our customers and make sure that we really take a hard look at our portfolio," Thulin said. Benefits include: "increased agility, we can move faster; … reduced costs and efficiency and productivity, and at this point in time, that’s around $300 million (in savings) just in this initiative."
3M last fall announced plans to lay off 1,500 employees, but Thulin's remarks this week were focused on finding new efficiencies to improve profitability. This strategy aligns with a trend we're seeing in distribution – refocusing on the core. During the investor day, the company also highlighted another key trend happening in house, as well as up and down the supply chain – implementing "lean" processes.
3M has appointed an operating committee member to oversee the company's Lean Six Sigma initiatives in hopes of "simplifying optimized processes specifically in supply chain and manufacturing," Thulin said. "And it’s also to increase employee engagement and leadership development focus. So, this is a fantastic initiative for us."
