The document discusses the need for companies to develop agile, adaptable, and aligned ("Triple-A") supply chains. It defines each concept and provides examples. Agility allows companies to respond quickly to unexpected changes. Adaptability is the ability to adjust supply chain design over time as markets change. Alignment encourages information sharing between partners to improve overall chain performance. Developing a Triple-A supply chain requires new attitudes and cultures that prioritize responsiveness over efficiency and view responsibility as extending to the entire chain. Technology alone is not enough - managers must facilitate the necessary changes.

1. RAHUL BABAR

2. A supply chain is a system of organizations,
people, technology, activities, information
and resources involved in moving a product
or service from supplier to customer. Supply
chain activities transform natural resources,
raw materials and components into a finished
product that is delivered to the end customer.
-Council of Supply Chain Management Professionals
(CSCMP)

3. Background
Traditionally companies aim for- greater speed and cost-
effectiveness
Companies couldn’t sustain that competitive advantage
Mark down in USA in 1980s was 10% and 30% in 2000s
Wal-mart, Dell and Amazon were successful to maintain a
competitive advantage through supply chain management

4. Fast changing hardware and
software
Multiple sources of technological
advances
Frequent product transitions
Manufacturing cost pressures
Short
product
and
technology
cycles Outsourced manufacturing partners
Outsourced design partners
Consumer electronics channel
Other associated product providers
Multiple
supply
chain
partners
Fashion like product
Strong competitive forces
Increasing product variety
Potential of external disruptions
Demand
and supply
uncertaintie
s

5. Challenges Implications
Increasing demand and
supply uncertainties
Uncertainty drives
need for flexibility
Shortening product and
technology cycles
Dynamic instead of
static supply chains
Multiple outsourced
supply chain partners
Differential interests
of multiple players

6. Agility
Adaptability
Alignment
Challenges Implications
Increasing demand and
supply uncertainties
Uncertainty drives
need for flexibility
Shortening product and
technology cycles
Dynamic instead of
static supply chains
Multiple outsourced
supply chain partners
Differential interests
of multiple players

7. According to Lee, H. (2003)…
In addition to being efficient supply chains should possess
three very different qualities- agility, adaptability and
alignment- which he referred to as the “Triple-A Supply Chain”
Agility
Adaptability
Alignment

8. It enables a company to handle unexpected external
disruptions smoothly and cost-efficiently and to
recover promptly from shocks such as natural
disasters, epidemics, and computer viruses.
Objective: to respond to short-term changes in
demand or supply quickly.
Agility

9. In March 2000, a facility of Philips in Albuquerque, New
Mexico, went up in flames
Philips couldn’t supply Radio Frequency(RF) Chips to Nokia or
Ericsson
Nokia’s Response: Back up suppliers demanded only 5 days
lead time
Ericsson’s Response: Started an expedition to find a suitable
supplier
The Aftermath: Nokia stole the market share from Ericsson

10. 1. Promote flow of information with suppliers and customers.
2. Develop collaborative relationship with suppliers
3. Design for postponement.
4. Build inventory buffer by maintaining a stockpile of inexpensive
but key components.
5. Have a dependable logistics system or partner.
6. Draw up contingency plans and develop crisis management
teams.
Ways to make a company Agile

11. Ability to adjust to structural shifts in market demand or supply,
modify supply network to company strategies, products and
technologies
Enables a company to evolve over time as economic progress,
political shifts, demographic trends, and technological advances
reshape markets.
Objective: to adjust supply chain design to
accommodate market changes.
Adaptability

12. In 2000, MS outsourced hardware production to Flexotronics.
MS announced the deadline - December 1, 2001 to target
Christmas shoppers
Flexotronics shifted production to Mexico and Hungary
MS launched the product in record time
Sony’s Response: Deep discount
Flexotronics’s Response: Shift production to China
The Aftermath: MS engulfed 20% market share of Playstation.

13. 1. Monitor economies all over the world to spot new supply bases
and markets.
2. Use intermediaries to develop fresh suppliers and logistics
infrastructure.
3. Evaluate needs of ultimate consumers- not just immediate
customers.
4. Create flexible product designs.
5. Determine where company’s products stand in terms of
technology cycles and product life cycles.
Making a company ‘Adaptable’

14. To encourage free flow of information
with suppliers and customers on a regular
basis.
Objective: The objective of aligning a supply
chain is to establish incentives for supply chain
partners to improve performance of the entire
chain.
Alignment

15. HP’s integrated circuit division carried as little inventory as
possible- to keep inventory holding cost minimum
HP’s ink-jet printer division had buffered inventory- to lower
the lead time
The aftermath: HP as a company had long lead times with high
inventory holding cost

16. 1.Exchange information and knowledge freely with
vendors and customers.
2.Lay down roles, tasks and responsibilities clearly
for suppliers and customers.
3.Equitably share risks, costs, and gains of
improvement initiatives.
Making a company ‘Aligned’

17. A Proposed Model

19. 1. Agility
• Real-time systems to detect changes in customer
preferences and track sales and customer data at
every store
• Satellite connections link stores with distribution
centers, suppliers, and logistics providers
• Reallocates inventory among stores and reconfigures
store shelves three times daily to cater to different
customer groups at different hours

20. • Within six hours after the 1995 Kobe
earthquake, SEJ overcame highway gridlock by
mobilizing helicopters and motorcycles to
deliver 64,000 rice balls to its stores in the
beleaguered city.

21. • Making partners' incentives and disincentives
clear
• When carriers fail to deliver on time, they pay
a penalty
• Helps carriers save money by forgoing the
typical time-consuming requirement that
store managers verify all contents of each
delivery truck

22. RESPONSE

25. Companies need fresh attitude and new culture to their supply
chain to deliver a Triple A performance.
Companies must give up efficiency mind set and be prepared to
keep changing networks.
Instead of taking care of your own interests take responsibility of
whole chain.
Technologies can’t alone make this changes, only managers can
make this happen.