3M Moves to a Customer Focus Using a Global Data Warehouse
Dale Goodhue, University of Georgia
Barbara Wixom, University of Virginia
In 1995, 3M Chairman and CEO L. D. DeSimone along with his top management team recognized that the focus of 3M had to change. For nearly 100 years, 3M manufactured products to make life easier, safer, healthier, and more productive for people in nearly 200 countries. In the excitement of creating innovative products, however, 3M was ignoring its customer relationships.
Until that point, 3M was organized into 50 autonomous, product-centric divisions, each with its own IT group, its own strategy, products, and markets. Innovation was the driving force of 3M's decentralized organization, and each division focused on selling its own unique suite of products, which resulted in 15.7 billion in sales in U.S. and abroad in 1999.
Unfortunately this approach confused customers who often had to interact with a host of 3M divisions to meet a wide range of needs. Under DeSimone's leadership, 3M was restructured into seven market segments: Industrial, Transportation, Health Care, Graphics and Safety, Consumer and Office, Electro and Communications, and Specialty Material. Each segment was charged with serving customers better and efficiently meeting their needs.
Changing a large Fortune 100 1 company like 3M is not easy. It requires shifts in mindsets, work processes, and the information that is needed to run the business. To address the latter need, 3M began a significant initiative to create a data warehouse called Global Enterprise Date Warehouse (GEDW). Before the GEDW, aggregate information was available only on division or country specific monthly reports at a fairly high level of aggregation. With GEDW, thousands of 3M employees now have real-time access to accurate, global, detailed information about sales, orders, customers, and products down to the SKU level of detail. The GEDW also underlies new web-based customer services that are dynamically generated based on warehouse information. GEDW has created a number of benefits for 3M, the most important being the capability to understand 3M's customer relationships by providing a customer-centric view of the business. The data warehouse has enabled 3M personnel and processes to become more customer-focused, and it serves as the foundation for Customer Relationship Management (CRM) initiatives throughout the organization.
This case study describes 3M and the business and systems drivers for the global data warehouse. Next, the development of GEDW and its architecture are described. The case
Fortune ranked 3M 110th in the 2000 Fortune 500 ranking.
concludes with benefits of the data warehouse and the lessons that 3M has learned along the way.
Minnesota Mining and Manufacturing (3M) is a $15.7 billion manufacturer with 70,000 employees selling 50,000 products that comprise 500,000 SKUs. The products are diverse, ranging from office supplies and industrial supplies to healthcare products and telecommunications and electronics components. 3M is a global company, with operations in more than 60 countries, manufacturing in 41 countries, research in 29 countries, and sales in 200 countries (52 percent of sales come from outside the U.S.). 3M strives to be the preferred supplier to its channel partners (e.g., K-Mart, Target, Office Depot) and customers, and focuses on customer loyalty, supply chain excellence, and new product innovation.
Until 1995, 3M's divisions were autonomous. Because of a major emphasis on product innovation throughout their history (30 percent of 3M's sales each year come from products introduced within the previous four years), 3M divisions were good at sharing research and development knowledge throughout the corporation. However, there was little sharing of information about customers and markets across divisions. Most divisions also had their own IT group and decision support...
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