Zachary Sullivan

SCO 3001
Sec. 003
Extra Credit
The event included two guest speakers from 3M from the
sourcing departments of the firm. Ernrique Arias, the Latin America
Sourcing Manger, started the discussion explaining the importance of
sourcing and how critical it is that 3M diversify their sourcing in
different countries in Latin America. He explained how he has been
with 3M for a long time and has held multiple jobs at 3M. Arias started
his career in Finance/Accounting at 3M and shifted toward supply chain
a few years ago. He thinks that coming from Finance/Accounting
allowed him to have a different perspective in the Supply Chain
department that allowed him to excel at his new job. 70% of 3Ms
sales come from outside the US, and as such a major problem in
sourcing at 3M is how to protect the firm from and stop supply chain
interruptions. 3M sources from 44 countries worldwide, strategic
sourcing is a strength from 3M. Annually 3M spends around 16 billion in
sourcing of production materials, indirect materials and manufactured
hardgoods. Latin America has a GDP of 6.1Trillion and is growing as
fast or faster than other emerging markets. 3M started their sourcing in
Latin America with Mexico, Argentina, and Brazil. Starting in these
major Latin American countries setup 3M strategically to expand
through Latin America. 3M has 3 sourcing models based on

developing, emerging and transitional local situations. Leveraging

spending in Latin America allows 3M to find supply efficiencies. One of
the biggest challenges for 3M in dealing sourcing in Latin America is
the corrupt and turbulent governments that it must deal with, as with
any emerging market. Inflation is also a problem for sourcing in Latin
America at 3M.
This event was eye opening for me and added much to my
learning experience in Supply Chain Operations 3001 in many ways. It
was interesting to see someone who was actually working in the
business world and having to use the concepts that we have discussed
in class in his job everyday. Forecasting was particularly interesting to
me in class and it must take a very good forecast for sourcing
managers to be able to accurately procure the materials required to
build 3M products. If they didnt have a good forecast than it would be
very hard for the sourcing manager to make budget decisions within
the firm to have enough to produce the target amount but also not buy
too much so that they have to much holding inventory for the time
allotted. I also found it engaging that Arias had moved around the
company many times and was able to apply other functional areas of
the firm to his job in supply chain operations. Holding Costs also must
be an issue with sourcing managers as they have a budget that they
would like to use on sourcing but without good production planning
their budget could be eaten up or reduced by holding costs the firm

incurs due to inaccurate production planning. Also Statistical Control

processes must play a roll in the quality of the product that they are
sourcing from many different countries around the world and more
specifically in Latin America. I found that the challenge of dealing with
real world problems such as unstable or corrupt governments and
unstable inflation rates to be very interesting and quite a challenge.