Group Assignment No:-2

Fundamental of supply chain

Case study Triple-A Supply Chain

Group Members: -

Adnan khalil 70074985

Ahsan

Zara

Introduction:- Triple-A Supply Chain

The concept of Triple-A Supply Chain was proposed by Professor Hau L Lee.
Professor Hau L Lee is the Thoma Professor of Operations, Information and
Technology. Professor Lee's areas of specialization include global supply chain
management,entrepreneurship and innovations in developing economies, and value
chain strategy.
According to Lee, H case study its totally on efficient supply chains possess three
very different qualities-agility, adaptability and alignment- these all stages in
“Triple-A Supply Chain”

1. Agility

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.

Method:

 Continuously provide supply chain partners with data on changes in supply and
demand so they can respond promptly.
 Collaborate with suppliers and customers to re design processes, components,
and products in ways that give you a head start over rivals.
 Finish products only when you have accurate information on customer
preferences.
 Keep a small inventory of inexpensive, non bulky product components to
prevent manufacturing delays.
Nokia and philips Example
 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 Ways to make a
company Agile.

Make your company agile

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 stock pile of in expensive but key
components.
5. Have a dependable logistics system or partner.
6. Draw up contingency plans and develop crisis management teams.
Adaptability
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.
Method or ways
Track economic changes, especially in developing countries.
 Use intermediaries to find reliable vendors in unfamiliar parts of the world.
 Create flexibility by ensuring that different products use the same
components and production processes.
 Create different supply chains for different product lines, to optimize
capabilities foreach. For example, with highly customized, low-volume
products, use vendors close to your main markets. For standard low cost.
 Example sony and Flextronics
 In 2000, MS outsourced hardware production to Flextronics
 MS announced the deadline - December 1, 2001 to target Christmas shoppers.
 Flextronics shifted production to Mexico and Hungary.
 MS launched the product in record time.
 Sony’s Response: Deep discount.
 Flextronics’s Response: Shift production to China.
The Aftermath: MS engulfed 20% market share of Play station.

3)Alignment: To encourage free flow of information with suppliers and customers

on a regular basis.

The objective of aligning a supply chain is to establish incentives for supply chain
partners to improve performance of the entire chain.

Provide all partners with equal access to forecasts, sales data, and plans.

 Clarify partners’ roles and responsibilities to avoid conflict.

 Redefine partnership terms to share risks, costs, and rewards for improving
supply chain performance.
 Align incentives so that players maximize overall chain performance while
also maximizing their returns from the partnership.Example HP’s integrated
circuit division carried as little inventory as possible-to keep inventory holding
cost minimum.

Aligned

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.