THE TRIPLE A SUPPLY CHAIN ---- BY HAU. L.

LEE
PRESENTED BY Arun singh

SUPPLY CHAIN
A supply chain is a system of organizations, people, 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.

OVERVIEW
Traditionally SCM meant only high speed and low cost, but are they applicable today is a question?? These practices are not enough to sustain in todays competition.

Facts show: US Supply Chain grew faster and cheaper between 1980-2000 but the sales dropdown was of 30% from 10% earlier
But companies like Wal-Mart, Dell and Amazon were not affected by this. What different did they do???

According to Lee.
The best supply chain arent just fast and cost effective, they are also:

AGILE

ADAPTABLE

ALIGNED

AGILE
It means respond quickly to sudden changes in supply and demand. Handling unexpected situations smoothly and cost-effectively.

Recover easily from shocks.

EXAMPLE
H&M, MANGO AND ZARA

Dell Computers
Natural calamities always affect the supply chain network. Such calamity(earthquake) in Taiwan delayed various shipments. Dell at this time changed its configurations instantly. As a result dell gained a good market share.

NOKIA V ERICSSON
Plant making RF chips for mobile telephones catched fire. Nokia managers immediately changed designs and backup manufacturer. Ericsson started expedition to find a suitable supplier. At end Nokia stole market share from Ericsson

Ways to make company Agile

1. Promote the flow of information with suppliers and customers. 2. Develop collaborative relationship with suppliers 3. Design for postponement. 4. Built inventory buffers 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 terms

ADAPTIBILITY
Ability to adjust to structural shifts in market demand or supply and modify them. The best SC identify structural shifts, before they occur by capturing the latest data and tracking. It enables a company to evolve overtime as economic progress, political shifts, demographic trends and technological advances reshape markets.

HP Vs HP
HP PRINTERS

HQ VANCOUVER
MAIN MARKET

(US)

DEMAND IN ASIA AND EUROPE

BRANCHES SPAIN AND SINGAPORE

CISCO
High volume products
Contract Manufactures Low cost countries Low cost countries--- core product Customize in main market

Mid value items Highly customized, low volume

Vendors close to main market

XBOX Vs PLAYSTATION
Microsoft decided to get in video game market---outsourced--- Flextronics. Microsoft gave a deadline ----- Christmas. Flextronics changed it facility location to Mexico and Hungary. Successful launch. Sony--- deep discount Flextronics---- shifted to china Finally MS- XBOX engulfed % market share of Play station

How to make company Adaptable

Monitor economies all over the world to spot new supply bases and markets Use intermediaries to develop fresh suppliers and logistics infrastructure. Evaluate the need of ultimate consumer- not just immediate customers. Create flexible product design. Determine where companys product stand in terms of technology cycles and product life cycles.

ALIGNMENT
To encourage free flow of information with suppliers and customers on a regular basis. Companies align the interests of all firms in their SC with their own.

Misalignment can cause havoc.

HP

Nonalignment at CISCO
Why did CISCO have to write off $2.25 billion in inventories in 2001? The main culprit was misalignment of Ciscos interests with those of its contract manufacturers. Contractors accumulated large inventories for months without factoring in demand for Ciscos products. Cisco worked closely with vendors to ensure that the supply chain was agile and adaptable, but overlooked alignment!

Making a company 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.

Seven- Eleven Japans Three Aces

AGILITY Designed SC ---- to respond to quick changes
& not on fast and cheap deliveries Investment in real time system Use of Satellite and ISDN connections Penalty on delay of goods Reconfiguring shelves at least 3 times a day

Adaptability
Concentrates stores in key locations Suppliers in same region consolidate shipments Expanded kinds of vehicles from trucks to motorcycles, boats & helicopters Effectiveness of the companys logistics system is legendary

Alignment
The incentives and disincentives are clear between partners. Fail to deliver on time pay penalty When carrier delivers goods--- no checking--saves time.