Revisit of AAA Excellence of Global Value Chains: Robustness, Resilience and Realignment

Abstract

What are the attributes of the best performing supply chains? According to Lee (2004), the best supply chains are agile, adaptable, and ensure the interests of all participating companies stay aligned, i.e., The Triple-A framework. Fifteen years later, we find global supply chains exposed, with an increasing frequency and alarming severity, to low probability disruptive shocks. We revisit the question of the current attributes of best performing supply chains in a highly uncertain and risk fraught world. Using the lessons of the last twenty years, we propose a new framework, the “Triple A & R” framework, as the foundational concept for defining excellence capabilities in global supply chains. Supply chains have to enhance agility with robustness, for real time excellent performance across a wide-range of risk scenarios. Adaptability has to go beyond adjustment to trends and require the building of resilience to recover from current shocks and proactively mitigate future such shocks. We need to rethink and pursue re-alignment of incentives for a “new normal” with changing consumer preferences, new value propositions and innovative business models. We review relevant literature that supported the implementation of Triple-A practices in the best chains, and highlight the challenges faced by them in the last twenty years. We offer an array of interesting research directions to flesh out “Triple A & R” concepts and develop practices for its effective implementation.

Keywords: Supply Chain, Robustness, Resiliency, Realignment, Strategy