Chapter 15.2, Problem 1RQ

READING AT 3M, A LONG ROAD BECAME A SHORTER ROAD

One of 3M's many products is a plastic hook. Production occurred at several widely scattered locations in the Midwest. The process started in a Springfield, Missouri, plant that made adhesives, which were then shipped about 550 miles to a plant in Hartford City, Indiana, where the adhesive was applied to foam. Next, the foam was shipped another 600 miles to a plant near Minneapolis, Minnesota, where the foam was cut into individual pieces and imprinted with the 3M logo. Finally the foam pieces were s hipped to a plant in central Wisconsin, another 200 miles or so, where they were bundled with the hooks and packages for sale. This entire process took over a hundred days and over 1,000 miles to complete.

3M eventually consolidated operations in a s ingle plant in Hutchinson, Minnesota, where a number of other 3M products are made. That eliminated all the travel and reduced the process time by two-thirds.

Situations like this can a rise when businesses acquire other companies and then elect to maintain their processing operations in their current locations.

1. Businesses sometimes acquire widely dispersed processing facilities through a number of mergers or acquisitions . What trade-offs might they face in considering consolidation?

Based on: "3M Begins Untangling Their Hairballs." The Wall Street Journal, May 17, 2012.