The challenge
3M embarked on a global plan to enhance its treasury management, addressing the cash needs and liabilities embedded in its operations. The company sought to optimise investment strategies, manage short-term liquidity and enhance global treasury processes. Amid changing interest rate projections and market volatility, 3M needed a flexible investment approach to manage assets and liabilities and automate its treasury operations.
The solution
3M partnered with J.P. Morgan Asset Management to implement bespoke separately managed accounts (SMAs) and seamlessly integrate Morgan Money into treasury operations, together with the company’s strategic Kyriba treasury management platform.
Recognising the need to refine its investment policy in tandem with market dynamics, 3M demonstrated the ability to segment cash with global nuances. This strategic foresight led to the establishment of SMAs in both EMEA and the US, tailored to accommodate local regulations, risk tolerances and cash profiles. These accounts adeptly balance liquidity while strategically leveraging duration to match assets and liabilities. Simultaneously, the integration of Morgan Money with Kyriba granted full visibility of money market fund (MMF) balances across 20 providers worldwide. This integration, bolstered by the partnership with Clearwater Analytics, streamlined treasury operations and provided real-time insights and advanced analytics for informed decision-making.
The global treasury team at 3M, strengthened by expanded resources across multiple locations, was poised for success. However, any investment solution had to offer full transparency to stakeholders and be agile enough to pivot in dynamic markets. Kyriba’s integration allowed for comprehensive global transparency, enabling transatlantic approval processes and real-time data access to enhance decision-making. Beyond efficiency gains, the integration reduces manual intervention, mitigates time zone constraints and empowers 3M to utilise robust reporting tools to analyse patterns, assess risk and identify investment opportunities.
A combination of the SMA, 3M’s stringent treasury policy statement and the investment manager’s rigorous credit process facilitates the creation of robust investment policy statements (IPS) for each region. Tranche-based SMA funding provides the flexibility needed to manage liquidity, match assets and liabilities and accommodate SMA intra-day cash sweeps into MMFs for more immediate cash requirements.
The comprehensive approach to SMA implementation and Morgan Money’s integration with Kyriba enables 3M quickly to realise its vision of a holistic treasury management strategy. By harnessing cutting-edge technology and strategic partnerships, 3M achieves unparalleled efficiency, transparency and growth, positioning itself as a leader in sustainable financial management and innovation in a short period of time. This transformation not only addressed immediate challenges but also set a new benchmark for best practices in global treasury management.
Best practice and innovation
Setting up a system to manage investments across multiple entities with diverse liquidity needs—while remaining fully transparent and agile during significant market volatility— demonstrates 3M’s best practice. The creation of unique, multi-page IPS for each region set flexibility in the guidelines for SMAs, allowing for adjustment to changing liquidity profile. This was achieved through dedicated resources and ongoing risk management, with regular investment reviews built in for optimal cash investment visibility.
The simultaneous implementation of Morgan Money and its integration with Kyriba was pivotal, enabling immediate liquidity management across over 20 MMF providers and offering a comprehensive global cash overview including the strategic SMAs. Robust reporting tools provide real-time insights into cash positions and investment performance, ensuring transparency and compliance, and setting a new benchmark for treasury management best practices. Innovative analytics empower 3M to analyse cash flow patterns, assess risk and identify optimisation opportunities.
The seamless data flow facilitates data-driven insights, empowers strategic decision-making and drives sustainable growth.
Key benefits
- Cost savings.
- Process efficiencies.
- Return on investment.
- Increased automation.
- Risk mitigated.
- Improved visibility.
- Errors reduced.
- Manual intervention reduced.
- Increased system connectivity.
- Future-proof solution.
- Exceptional implementation (budget/time).
- Quality accreditation achieved.
3M Company (originally the Minnesota Mining and Manufacturing Company) is an American multinational conglomerate operating in the fields of industry, worker safety and consumer goods.