3M Dental Products Division

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					3M Dental Products Division
  Final Project/Presentation


          Team Members:

             Syed Iqbal
         Hammadoun Dicko
          Patrick Garbin
         Olalekan Fakiyesi
          Furqan Yaqoob




                  MGNT 6055: Total Quality Management

                                          Dr. Obeidat

                                          Spring 2004
Introduction

A customer satisfaction rating of "good" is no longer acceptable for 3M Dental Products
Division, a Minnesota-based supplier of products used around the world. The 700-
employee division of 3M has determined that only by striving to earn grades of
"excellent" in all product and service areas can it set clear goals for performance
improvement, continue to increase sales, and boost productivity at industry-leading rates.


Pursuit of excellence explains why 3M DPD's customer surveys no longer combine
"good" and "excellent" responses in a single category, why it has developed a
comprehensive network of customer "listening posts," and why it has built an information
system that tracks the purchasing decisions of dentists. It also accounts for how 3M DPD
sets its priorities -- by concentrating people and resources on opportunities most likely to
improve products and services beyond customer expectations.


The division's careful reading of customer requirements drives a finely tuned innovation
process that delivers a steady stream of new or improved products. Products introduced
within the last five years now account for 45 percent of total annual sales, up from 12
percent in 1992.


The Business
Established in 1964 and competing in a $4 billion global market, 3M DPD manufactures
and markets more than 1,300 dental products, including restorative materials, crown and
bridge materials, dental adhesives, and infection control products. Most of its 700
employees are based at its St. Paul, Minnesota, headquarters and at its manufacturing and
distribution facility in Irvine, California. Fred Palensky, division vice president, heads
3M DPD.


In the United States, where it has a leading share of the market, 3M DPD competes with
more than 100 manufacturers of dental products. Sales and distribution to U.S. dentists
are carried out through a network of independent distributors. In foreign markets, the
division uses 3M subsidiaries for sales, marketing, and customer support. Sales of 3M
DPD products outside of the United States account for 65 percent of the division's total
sales.


Supplier of Choice
3M DPD aims "to become THE supplier of choice" of dental professionals worldwide.
Setting a clear course to achieve this aim is the objective of the division's systematic
strategic planning process, cited as an industry best practice by Fortune magazine. Led
by a steering committee of top executives and senior managers, the process is designed to
build consensus on what needs to be improved and on how it will be accomplished. Over
20 percent of employees participate, which results in a 10-year vision, a detailed five-
year strategic plan, and a one-year operating plan.


For each priority improvement, the steering committee negotiates with the appropriate
department or functional unit to establish the anticipated business impact, determine
resource allocations, and set metrics and target values for assessing progress.

Setting individual goals in the areas of business results, team effectiveness, and employee
development, the Employee Contribution and Development Plan is the division's chief
personnel appraisal tool, used to determine performance ratings and guide promotion
decisions.


3M DPD's measurement system, the Business Performance Management Matrix,
provides an easy-to-grasp framework for aggregating performance measures and for
directly linking these measures to key business drivers and goals.


Listening and Learning
Most dentists in the United States and Europe, the division's largest markets, already use
3M DPD products. Future growth will depend largely on increasing existing customers'
preferences and spending for 3M dental products. To do that, the division must have a
thorough knowledge of customer requirements.
It has graded the dentist market, resulting in five groups, reflecting differences in
satisfaction, purchasing behavior, referrals, repurchases, and number of 3M DPD
products used. In-house and third party surveys, focus groups, and hands-on evaluations
are among the wide variety of methods that the division uses to listen to and learn from
dentists in each segment. In addition, virtually all customer contacts, from visits by field
representatives to calls to the Technical Hotline, provide additional information that also
is entered into the division's Customer Information System. The extensive database
provides the information necessary to determine whether specific products and services
are meeting key customer satisfaction goals and to spot opportunities for new products.


Innovation-Driven
Insights into changing customer requirements combined with knowledge of
technological, societal, and environmental trends are the starting point for product and
process innovations. Dentists, distributors, and major suppliers are involved in the
division's systematic approach to translating key customer requirements into design
requirements, prototypes, and, ultimately, reliable, quality products.


Introduced in 1979 and refined 37 times since then, the approach has been standardized
into a five-phase process. At the end of each phase, the steering committee conducts a
review before authorizing the next set of actions.


Examples of customer involvement include simulated operations on "Fletchers,"
mannequins with human-like mouth features and conditions. Dentists use these
mannequins to evaluate variations of prototype material or hardware products. Through
this and other methods, customer feedback is received at least three times during the
development cycle.


Employees
Employee satisfaction, development, and productivity also constitute a key business
driver. 3M DPD management believes that responsibility for cost, quality, service, and
development should be assigned to the employees closest to the job. Training is a major
element of each worker's plan, which is reviewed at least twice a year to ensure that the
workforce is acquiring skills essential to the division's continuous improvement efforts.


In a division survey, 75 percent of employees said that 3M DPD gives them the
opportunity to improve their skills. This is significantly better than the average of 59
percent for a peer group of companies.


Since the early 1990s, the division has strongly emphasized team-based approaches to
problem solving and continuous improvement. Management credits the 3M DPD team
approach with enabling the division to double sales over the past seven years without
increasing the size of the workforce.


The importance of individual initiative is also recognized. All employees, for example,
are encouraged to devote 15 percent of their work time to self-directed research.


Results
Continually raising the bar for performance improvement, 3M DPD is realizing benefits
in nearly all facets of its business. Over the last 10 years, the division has doubled global
sales and market share, and from 1991 to 1996, it doubled its rate of profit.


Overall satisfaction of the division's U.S. distributors establishes 3M DPD as the industry
leader. Since 1993, 40 to 45 percent of the division's distributors give it "excellent"
ratings in overall satisfaction, with no other competitor consistently achieving more than
20 percent of "excellent" ratings. Surveys of dentists also show 3M DPD to be the
industry leader in overall satisfaction with products and services. In the 1995 and 1997
surveys, dentists rated 3M DPD as excellent twice as frequently as an aggregate of
competitors. These surveys were in the key customer requirement areas of consistently
performing, reliable products and product ease of use.
The Public Reputation of 3M Dental before and after the Malcolm Baldrige Award
3M Dental Products Division (3M DPD) was launched in 1964 to manufacture and
market products used by dentists all around the world. The product offerings include but
are not limited to:


    Restorative and Crown and Bridge Materials
    Dental adhesives
    Infection control materials
    Dental Laboratory products hardware
    Cosmetic sealants


3M DPD is a division of 3M worldwide, a highly innovative technology company with
leading positions in various industries spanning over 200 countries. 3M DPD currently
markets more than 1,300 products used by dentist all over the world.


Many companies that win the Malcolm Baldrige National Quality Award have a before
and after story with their reputation and market experiences. With 3M DPD however, the
Award seemed to serve as an acknowledgement of the good quality practices of the
company. Public reputation of the company before it received the award shows that 3M
DPD was highly regarded in different segments of the dental manufacturing sector.


Customer Satisfaction
As far back as 1987, its customers had recognized 3M DPD as the industry leader with
product and service satisfaction. From then until 1997 when 3M DPD won the award,
industry ratings had the company outperforming the “excellent” ratings of an aggregate
of its competitors by two to one in the areas of consistent performance, reliable products
and product ease of use.


Surveys since 1989 show an overall satisfaction from distributors of 3M DPD products
and services and established the company as an industry leader. Forty to 45 percent of
3M DPD’s distributors consistently gave the company a rating of “excellent’ in overall
satisfaction. No other company consistently achieved 20 percent within the same period.


Desirable Employer
3M DPD was and is also recognized as a desirable employer of labor. A division survey
of employees in 1997 revealed that 3M DPD gives them the opportunity to improve their
skills. This is significantly higher than the average of 59 percent for a peer group of
companies. A recurring survey from 1990–1996 shows that 3M DPD employees have
substantially higher levels of satisfaction with a wide variety of factors than a group of
peer companies from a third-party survey. 3M DPD employees give 20 percent to 30
percent higher favorable ratings.


3M DPD’s care for its employees can be viewed in the highest regard accorded to safety
in the workplace. Occupational Safety and Health Administration (OSHA) recordable
incidents indicates one of 3M DPD plants in Irvine improving their safety record from
4.4% incident record to one percent over a four year period (1993-1997).


Employee satisfaction is improved by 3M DPD’s belief in involving employees at all
levels. This concept is exhibited in its team-based approaches to problem solving and
continuous improvement.


By putting responsibility for cost, quality, and service to the employees closest to the
actual job, 3M DPD shows that it values employee satisfaction, development and
productivity as a key business driver.


A Quality Driven Organization
As of 1996, 3M DPD had 32 suppliers. Of these, 20 had their production and quality
processes certified by 3M DPD. Materials supplied by these 20 “certified” companies
increased from 55 percent to 88 percent in the period spanning from 1993 to 1997. This
has reduced inspection time required by the 3M DPD manufacturing process. In 1994, in
a six-hour inspection process, less than 20 percent of materials received were accepted
while in 1997 this number was increased to 90 percent.


3M DPD shows its commitment to continuous innovation by implementing a team-based
approach to problem solving. The division also features a cross-functional team
approach to strive for performance excellence. Business processes are overseen by a
steering committee that guides 43 teams in product selection, process improvement and
problem solving. 3M DPD also uses a measurement system, the Business Performance
Management Matrix, to provide an easy-to-grasp framework for aggregating performance
measures and for linking these measures to key business drivers.


An Innovation Driven Organization
3M DPD has inherited the culture of innovation from its parent company. 3M
Worldwide has always been recognized for its approach to innovation and 3M DPD does
not seem to fall short in this area either.


3M DPD employees are required to allocate 15 percent of their working time to personal
research. This only serves to increase the number of innovative products that come from
the 3M DPD stable and increase their reputation as an innovation driven organization


3M DPD also combines its knowledge of societal, technological and environmental
trends to gain insights into changing customer requirements. Customers (distributors,
dentists and major suppliers) are involved in systematic approaches to convert key
customer requirements into design requirements, prototypes and ultimately, reliable
quality products.


Since winning the Malcolm Baldrige Award National Quality award in 1997, 3M DPD
has managed to maintain each of the aspects of its reputation as noted in the quotation
below:
     “3M Dental operates in a mature, highly competitive
industry. It has differentiated itself from its competition by
creating innovative products with unrivaled quality and
reliability, unparalleled service and strong relationships to its
strategic partners. 3M Dental manages by an aggregate of
performance management matrices to measure progress against
its strategic goals. This process is reviewed monthly by its
steering committee. It has a rigorous strategic planning process
that systematically updates its plans from the previous year,
incorporates the various dimensions of its markets and
operations and actively deploys it throughout all segments of
the organization, including its strategic partners and customers.
Working in a cross cutting team structure, staff
participate in developing and reviewing the plan, know its
measurable requirements and their roles in carrying it out. 3M
Dental leverages its numbers through strategic partnerships
throughout the world. It identified a customer-focused process
as its key priority in 1998. Its solution was to develop key
linkages with leading practitioners, academicians and
distributors around the world who are “channel partners”,
suggesting and testing new products. 3M Dental combines its
partnerings with the broader 3M corporate global presence to
provides high recognition and credibility for its
emerging product line. 3M Dental has, in a short period of
time, consolidated a process for setting industry product
standards in an array of countries.”
Financial Matrix:
Major Factors that Led to the Decision by 3M Dental Products to Apply for the
Malcolm Baldrige Award
It is assumed that 3M Dental Products first applied for the Malcolm Baldrige Award in
1994 with the same intentions why most organizations apply and for the reasons cited by
the Baldrige National Quality Program. The major reasons why organizations apply for
this prestigious award are to improve their performance on the critical factors that drive
success, to gain an outside perspective of the organization’s strengths and opportunities
for improvement, to energize and motivate their employees, and to improve the
organization’s bottom line.


3M Dental Products assumably applied for the Award because the application process
accelerates improvement efforts by introducing a rigorous, objective, external view of the
organization’s improvement process. Organizations that are involved in the process also
mention that pursuing this goal energizes improvements efforts and increases team
motivation. Additionally, each applicant receives a thorough written assessment of its
strengths and opportunities for improvement. Another factor that likely led 3M Dental
Products to apply is that the Baldrige scoring system helps organizations determine its
most critical performance measures and improve performance in key areas.


Most Baldrige Award applicants cite the feedback report as the most significant benefit in
applying. When 3M Dental Products applied, they received a detailed, individualized
feedback report that assessed the organization’s strengths and opportunities for
improvement based on their Award application. In surveys of the 2000 through 2002
Award applicants, more than 80% reported they were satisfied with the feedback report
for continuous improvement.


Four years before applying for the Malcolm Baldrige Award, 3M Dental Products began
using Baldrige criteria to implement self-assessments. In 1994, the company won
California’s U.S. Senate Productivity Gold Level Award and applied for the Baldrige
Award the same year. Quality Manager Duane G. Miller declares, “Before we ever
applied for the national award, we had trained Baldrige examiners to look at us.” The
Award provided outside validation for 3M’s quality processes while its competition and
recognition also proved positive for employees, suppliers and customers. The process of
doing self-assessments in 1990 helped 3M DPD clarify its customer focus and was the
main factor in eventually applying for the award. Plant Manager Ajer Myer states, “The
most valuable assessment of our company’s performance has been the Baldrige Award
criteria…” When 3M DPD began self-assessment practices in 1990, they were not even
sure who their customers were. However, upon using Baldrige criteria, the company
became prosperous enough to apply for the Award four years later and eventually won it
on their fourth try in 1997.


The Baldrige Process
A major “wake-up call” came at 3M DPD in 1987 when the division realized that they
were only at 50% of their projected sales forecast and profits were at only half of their
goal. Employee morale was low and increasing problems were being fixed in the field.
Several top-level changes were made in 3M DPD’s division management in an effort to
correct the course the division was on and to try and win back lost customers. During
1989, a 3M Dental strategy was developed leading to the use of the Malcolm Baldrige
National Quality Award Model as a means of bringing the organization together in the
spirit of teamwork, and to put the division on a systematic track of continuous
improvement. A new vision for the company was developed with the introduction of the
Baldrige process “To become THE supplier of choice to global dental professional
markets, providing world class quality and innovative products.”
The new division leadership chose the Baldrige approach as a means to build an ongoing
culture of knowledge and understanding of customer needs, products, and processes
throughout the organization that would drive performance improvement and improve
employee morale. These processes helped 3M DPD clarify its customer focus.
"When we began the process in 1990, we weren't sure who our customer was," notes
Miller.


The company now considers dentists its primary customers and has developed processes
to target their needs, including follow-up after purchases and information gathering for
new product lines. Miller estimates that his company serves 120,000 dentists throughout
the United States.


3M DPD’s Improvement of Performance:
In 1987, 3PD was in a dilemma, according to a company-supplied view chart. The
situation was characterized by:
 Sales failing to meet forecast
 Profits down by half
 Low employee morale with lots of fault-finding, and
 Poor teamwork


In 1988 and 1989 management made changes, including the appointment of a new Vice
President with a commitment to make change by:
 Fixing problems in the field
 Winning back customers
 Improving new product introduction process, and
 Implementing a teaming processes.

3M DPD Chose to Pursue the Baldrige Award because of the following reasons:

 Poor product and process understanding (in 1987)
 Need to improve performance (or the division might not ‘be around’)
 Need to improve employee morale
 Arrival of a passionate leader


What They Learned:
 Baldrige Award process is difficult
 Process takes time, be prepared to be patient
 Work on a few major items (e.g., from feedback reports)
 Get help!
 Write an application every year (3M DPD hires an outside consultant to facilitate this,
at a cost of about $100,000, and 3-5 person years per year).
 Total integration of all business practices is achievable using the Baldrige
approach
 It is a formal continuous improvement process
 Provides validation of status by an outside source ¾ several other pairs of eyes
looking hard at your business
 Includes HR, support groups, leadership (unlike ISO 9000)
 Creates a culture for change and excellence


What the Baldrige Is Not:
 A quick fix
 Directive ¾ doesn’t involve or imply a compliance viewpoint
 Prescriptive
 Perfection


The Chronology of Key Steps taken by 3M Dental on the New Journey is as follows:


• 1990
The first outline was structured of 3M DPD under the Baldrige framework.


• 1991
The first written application was prepared.


• 1991
3M quality managers internally scored the application.


• 1992
Baldrige examiners scored the next application.


• 1994
3M submitted state and national applications.
• 1996
3M received a Baldrige site visit.


• 1997
3M Dental Products won the National Baldrige Award after four attempts.
In 1997 after winning Baldrige Award, 3M DPD joined a distinguished and diverse
family of 28 other companies.

The award process offers tangible benefits for participants. Duane G. Miller, 3M Dental
Products Division's Quality Manager says "We have a very complex measurement
process that we call 'Business Process Management,' " he says. "We measure a lot of the
elements. We look at the Baldrige as affecting our increase in productivity, in terms of
dollars generated per employee. During the time we've been in this process, we've
doubled our profits."

   All winners must observe a five-year moratorium between winning and reapplying.
Not resting on its laurels, 3M DPD intends to perform a self-assessment this year, which
will involve completing a Baldrige application and hiring examiners to audit the
company.




References
 www.progressivepractices.com/articles/quest_for_excellence_x_conference.
 www.3m.com/intl/hk/english/include/superbrand02.pdf
 http://www.nist.gov/public_affairs/bald97/3m.htm
 http://www.quality.nist.gov/3M_97.htm
 Katherine Aldred. (1998, March). Baldrige Award recognizes four U.S.
companies. Iie Solutions, 30(3), 8. Retrieved April 9, 2004, from ABI/INFORM
Global database. (Document ID: 26865925)
 Otis Port. (1998, March). Quality Claims Its Own Bull Market. Business
Week,(3569), 113. Retrieved April 9, 2004, from ABI/INFORM Global database.
(Document ID: 27146062)
 http://www.ctcoop.com/pdf/3M_2000.pdf
 http://media.corporate-ir.net/media_files/NYS/MMM/reports/3m_01ar.pdf
 http://instruction.bus.wisc.edu/obdemo/readings/larson.htm