Supply chain Case Study: 3M
Diversified Technology - company 3M has produced thousands of innovative products and solutions since its inception in 1902. So, Logistics Middle East magazine sat down with Abid Mehmood, the firm’s supply chain manager for the Gulf and North Africa, to find out the logistics details behind the company’s regional operations.
“Our logistic operations in the Gulf are managed by DHL, who is basically our 3PL partner, and we have been working with them for a number of years now,” says Mehmood.
“Initially, we started business with them in air freight in 1991 and then expanded into ocean freight. Approximately three years back, we started warehouse and distribution operations, as we wanted to implement a direct supply chain model; right from our suppliers to our customers.”
“DHL’s role is to handle the local distribution centre, the distribution of products within the UAE, and the export of goods to the GCC countries by sea, air and land freight. They also provide us value-added services like labeling and promotional packaging that are needed to support the local needs of the customers.”
We source our products from the US, Europe, Asia, and from a couple of local vendors, that make up over 50 suppliers worldwide.
We have two service providers; CEVA for external needs and DHL for internal. CEVA, the external provider, picks up goods from international locations and delivers them to the Dubai port. DHL then takes over with clearing the goods and then storing them in the warehouse.
We have over 65,000 products worldwide that are part of our six business units including, Displays and Graphics; Electrical, and Communications; Health Care; Safety, Security and Protection Services; Industrial & Transportation; Consumer & Office. In this region we sell over 10,000 products with one third of them, constantly stored in the warehouse.
We are looking to establish a regional distribution centre that will allow us to cater to the GCC and Levant region. A bigger hub in Jebel Ali free zone is ideal in order to manage stock availability due to long shipment times. This will ensure we meet customers’ expectations. Being an innovation driven company we have over 25% products that are new to the market each year. Our core portfolio is the backbone to our business which is critical for our aggressive growth for the region.
Our warehouse is located in Jebel Ali south zone. The entire area of the DHL facility stores up 80,000 pallet positions, which gives us an opportunity to manage volume according to our customer and the market needs.
Border and custom checks pose difficulty at times. Rules and laws constantly change causing delays with shipments. We try to anticipate these changes to avoid complications and delays with pending shipments. With the increased focus on regulatory norms in the region, we need to be up to date with the requirements and ensure that our practices and documentation are in order and we do not have any penalties while delivering on time to customers. We have invested in Regulatory Affairs for the region to proactively manage the needs of the local countries and streamline the process.
The 3M supply chain in a nutshell
Within the supply chain, we have our customer service centre that addresses our customers’ needs, in addition to an operational department that manages documentation,transportation, inventory management and warehousing. Our function works hand in hand with the sales, marketing and finance departments of the different divisions to ensure alignment. We benchmark service providers to keep up to date with worldwide supply chain practices in order to remain competitive and meet and exceed demand customer expectations. We are pleased with our partnership with DHL, in facilities, messenger system and of stock management, which are critical aspects of logistics.