Infusion of agility in supply chain to thrive and not to survive.
Before my fascinating global career in procurement and supply chain, I had scientific ambitions through which I explored books from famous scientists including the ‘Origin of Species’ by Charles Darwin. Darwin argued that strength and intelligence was inadequate to guarantee the survival of species and observed that the ability to adapt to change was most crucial. My present-day supply chain equivalent of Charles Darwin and supply chain prodigy is the gifted Professor Hau lee of Stanford who in 2004 wrote a game changing article in the Harvard Business Review introducing ‘Triple A supply chain’ to the world in which he elucidated agility, adaptability, and alignment as first-class capabilities of a supply chain. In 2021, Professor Lee released a new article through the Management and Business Review in which he refreshes his Triple A concept to ‘The New AAA supply chain’ which explicates super-agility, architectural-adaptability and ecosystem-alignment. The following section provides an in-depth description of ‘the new AAA supply chain’.
Super-agility
If the supply chain in your organization can make rapid structural shifts with ease to respond to disruption from regulatory requirements, natural disasters or trade deals then it is ‘agile’ but reactive. More astutely, if the supply chain can intelligently sense and anticipate changes with precision on phenomena such as the ‘bullwhip effect’ variations in demand and supply, allowing the supply chain to rapidly make advance adjustments for it to thrive and not survive then it is ‘super-agile’ and proactive.
Architectural adaptability
While agility emphasizes speed, adapting is about responding to changing needs and the evolving operating environment. An example of adaptation is changing the supply chain cost structure to reflect new customs regulations issued by the Kenya Revenue Authority. ‘Architectural adaptation’ is more complex and stratified as it seeks to innovatively adapt a supply chain by incorporating broad changes that cut across the value chain, advance technology, human capital, technical know-how, retooling of production processes to fully optimize the ability of the supply chain to rapidly adapt.
Ecosystem-alignment
The centre of attention for alignment is strengthening the relationship between buyers and sellers through common interests to deliver win-win outcomes. Organizations have achieved this through collaboration in exchange of information, sharing of risks and rewards. Consumers have become increasingly sensitive about the planet including ethical and sustainable practices. Business writer John Elkington coined the phrase ‘Triple Bottom Line’ which advocates for sustainable business practices that create greater value for people, the planet and profit. The following section better explains the triple bottom line.
Triple bottom line for sustainability
The concept outlines that people must be catered for through better social equity such as ensuring compliance with international labour laws, providing decent working environments and giving back to communities that produce resources such as raw materials through corporate social responsibility. The planet must be cared for by reducing carbon emissions, greening supply chains, incorporating reduce, re-use and recycle policies and most importantly, avoiding negative impact on the environment through sustainable environmental practices. Profit is interpreted as the economic benefit an enterprise has on a host community such as the creation of jobs, social impact and not necessarily maximizing internal profit of an organization. Consumers are more conscious and educated about sustainable practices and are engaging with enterprises whose systems are aligned to their interests.