Essay: The Triple-A Supply Chain

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  • Published on: July 28, 2019
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The Triple-A Supply Chain article contains three components that will help organisations to build or strengthen their supply chain better and faster than their competitors. These three components are agility, adaptability and alignment. According to Lee, adapting the Triple – A in the supply chain from a company will finally offer a sustainable competitive advantages.

During the research there are three hypotheses Lee had been investigating about leading to a better and faster supply chain. These hypotheses are connected with the components from the Triple –A model. The first hypothesis relates fostering agility. Many companies failed on agility, because they were playing speed against costs. While an requirement of an agile supply chain is that they are able respond to both speed and fast- and cos-efficiency. The second hypothesis is related with the flexibility of adapting a supply chain. Adapting a supply chain based on the market conditions or changes in the strategy can be tough, but this is essential to establish or maintain a supply chain which offers durable advantages against competitors. The last hypothesis implies creating the right alignment. In order to create a right alignment and maximize the supply chain performance, it is necessary that the interest from all parties in the supply chain are aligned with each other.

The results in the article has been established by qualitative research and in particular longitudinal research. This can be concluded as follow: Through observing and studied more than 60 companies, Lee has found a fundamental problem which seems to be ignored by most companies and experts. The observation and study took about 15 years, which is a long period of time, this is an indication of a longitudinal study. Another indicator of a longitudinal researches is that the variables of the research is mostly observational or can be repeatedly being observed over a long period of time.

The results of the desk research consists of the old situation and the issues Lee found during the research. In order to answer the question why companies haven’t been able to establish a successful (efficient) supply chain, the question is underpinned by the following three issues:
Firstly, supply chains that focus on high-speed and low cost are mostly unable to respond in sudden changes in offers and demands. Secondly, by focussing on high-speed and low-cost companies can cause a breakdown of the supply chain when it comes to launching new products. Thirdly, by having an efficient supply chain could cause an uncompetitive environment due inflexibility of adapting the changes in the market. Eventually, the solutions of these issues will lead to the Triple- A: Agility, Adaptability & Alignment.

Fostering Agility

Great companies are the ones who are able to build or strengthen a supply chain which are agile to react to sudden and unexpected changes in markets. Many companies use to put their focus on high-speed and low-cost supply chain, but Lee is trying to convince the reader with practical examples that ‘’the old low cost, high speed supply chain model’’ isn’t that sufficient as it sounds. An agile supply chain can be recognized by responding both quickly and cost-efficiently to unexpected changes. By focussing on being agile, companies are more able to distinguish themselves from competitors.

Moreover, why agility is became so critical, is because there are so many unexpected events what will affect the supply chain. In order to recover more quickly, supply chains have to be agile. How can companies establish a more agile supply chain? This could be achieved by implementing the following six steps. Firstly, companies have to ensure that the data must continuously spread among partners in the supply chain in order to create a more efficient and effective way of communication, so they are able to respond more quickly. Secondly, companies have to create collaborations between partners, suppliers and consumers who work together on design and redesign processes, back-up plans and products. Thirdly, companies should design products that contain the same parts which are only different at the end of the production process. The fourth step Lee is suggesting companies to keep small stock of inexpensive components in case of solving bottlenecks. The fifth step is about creating a dependable logical system that ensures reliability in unforeseen events. The sixth and last step implies that is crucial to set up a team that are able to create back-up plans.

Adapting your supply chain

The flexibility to adapt sudden or unexpected changes in the market can be tough, but it is crucial in order to develop a sustainable competitive advantages. If companies are not flexible with adapting changes in their supply chain, they will stay behind or can’t gather advantages over their competitors.

Since an important goal from supply chains is being able to recognize changes before they arise, it is crucial to make adjustments in the supply chain. Adapting does not contain any tactical reasons. By flexible adapting new abilities to invent new or modified strategies to reach new markets can be created, which leads to new products launchings. In order to build an flexible supply chain, two key elements are required. Firstly companies must have the ability to spot movements. Secondly companies must be capable to shift from supply networks. All in all in order to recognize future movements, companies must be aware of the developing countries, the demands/wishes from the customers, new suppliers who also aware of the complexity within the supply chain.

Creating the right Alignment
Needless to say, almost every company in the supply chain are trying to maximize their own interest. However, great companies are trying to align all the interest of all parties in the supply chain with their own. In case of difference of the interest from the parties in the supply chain, there is a chance that the whole supply chain won’t achieve a maximum performance. Lack of alignment is one of the issues what can cause failure of supply chains.

In order prevent failures of supply chains, companies have to ensure that they are sharing the same risks, costs and revenues. An aligned interest contains two advantages. (1) The whole supply chain have the same goal and objectives. (2) Since they share the similar risks, they will try their best to make the most matching decision for the supply chain. Further, it is important to notice how alignment can be created. First, companies needs to creating alignment of information. Hereby, the information stream is transparent, and all parties in the supply chain have equal access to it. Then companies should align their roles and responsibility of each party in the supply chain. After that, companies should define their behaviour and align their incentives in the supply chain. At the end while companies are aligning their incentives, they must redesign their incentives in order to corporate and work closer with each other.

The article describes a correlation between adapting the Triple-A in the supply chain and other variables. Companies must fulfil some changes when it comes to adapting the Triple-A. Some external movements are almost permanent, which affect the whole market and supply chain. These external movements are related with economic, political, social, demographic or technological changes.

According to the conclusions from the article about the necessary in further development in the supply chain. The scientific relevance will be explained as follow: More technological improvements or investments are not necessary, due the fact most companies already have the capability to create a Triple – A supply chain. Adapting the Triple – A in a supply chain can be achieved in several ways. For instance, redesigning a whole new company culture and attitude which is focused on creating a Triple – A supply chain. Another way is abandon the high-speed and low-costs mindset and being flexible to change from networks. In addition companies must put their collective responsibilities first over the their own interest in the supply chain. Somehow adapting the Triple – A method is a role for managers who need to be prepared and trained for it.

What are the advantages of establishing a Triple – A supply chain? Although high-speed and low-cost
Supply chains are important, they are not sufficient enough to provide companies durable advantages over competitors. While by adapting the Triple – A method in the supply chain this problem can solved and success will be assured. Only so supply chains are able to being agile to respond to sudden changes, being flexible to adapting changes, and being able to align all interests for a better supply chain performance.

2 The Core Competence of the Corporation
By C.K. Prahalad and Gary Hamel, 1990
During the last twenty years thoughts about the business concepts has been changed and the visibility of powerful ways to dominate global competition is to many companies still an issue. During the 80’s the top management of most corporations were assessed on the ability to restructure, declutter and delayer their corporation. The business concepts must be redesigned, because the ability to identify, cultivate and to exploit the core competences can establish opportunities for growth.

The authors have investigated six hypotheses related with identification, cultivation and exploitation. The first two hypotheses are related with identification. In the past, managers were afraid of low coast and high quality. Nowadays the issues most corporates are facing are related with the speed of rivals in contriving markets, product developments and – enhancements. It is crucial to identify the roots of the competitive advantage and avoid thoughts of competences when it comes to identifying the core competences. Corporates are confronting each other to establish competences which define global leadership. Successful corporates stop defining themselves as groups of business that produce products, due changes in the business portfolios. The next two hypotheses are related with the cultivation of the core competences. Important to know is that core competences must provide access to potential markets, before identifying them. The products must be distinctive and able to contribute to the benefits of the on the final product. Beside this it is also necessary that the product is hard to imitate by their competitors. All in all, it is necessary to start with identification of the core competencies, then develop them in core products. During the development of core products is it important to focus on differentiation of the brand – and fabrication share. At last the final two hypotheses are related with the exploitation of the core competences. All facets of the corporates must lead to the same direction and these corporates must establish or maintain a wide strategic architecture which provide objectives for building competencies.

The results in the article has been established by qualitative research and in particular longitudinal research. A conclusion can made as follow: The authors have observed the same objects over long period of time. The research exist out of a comparison between two companies NEC and GTE. The authors underpin their results with clear practical examples of the experience in of core competences from the two corporates. Therefore, the research is formed in a combination of a case study and a particular longitudinal study.

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