Triple-A Supply Chains

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Questions and Answers

Which of the following is NOT a component of the Triple-A supply chain, according to Hau Lee's original concept?

  • Automation (correct)
  • Adaptability
  • Agility
  • Alignment

The complexity of global supply chains has increased visibility, making them easier to manage.

False (B)

What is the primary focus of an agile supply chain?

Responding quickly to changes in market demand or supply and handling external disruptions.

The apparel industry's contribution to global emissions is more than ______ and shipping combined.

<p>aviation</p> Signup and view all the answers

Match the following Triple-A supply chain components with their descriptions:

<p>Agility = Ability to respond quickly to changes in demand or supply Adaptability = Ability to adjust supply networks to meet structural shifts in the market Alignment = Creating incentives for all supply chain partners to achieve better outcomes</p> Signup and view all the answers

Which of the following best describes the role of outsourcing in enhancing supply chain adaptability?

<p>It facilitates easier relocation of production and economies of scale. (D)</p> Signup and view all the answers

Having contractual relationships with upper-tier suppliers is very common for firms.

<p>False (B)</p> Signup and view all the answers

Why is aligning environmental strategies within a supply chain crucial?

<p>To improve environmental issues like carbon emissions and create sustainable supply chains.</p> Signup and view all the answers

The Sustainability Consortium urges companies to prepare their supply chains for potential weather-related disruption risks due to ______.

<p>climate change</p> Signup and view all the answers

Match the following emission scopes with their descriptions according to carbon emissions reporting:

<p>Scope 1 emissions = Direct emissions Scope 2 emissions = Indirect emissions from purchased electricity Scope 3 emissions = Emissions from suppliers</p> Signup and view all the answers

In the context of sustainable supply chains, what does agility primarily involve, beyond responding to market demands?

<p>Responding to a broader set of stakeholder demands, including regulators, activists, and employees (B)</p> Signup and view all the answers

Carbon legislation provides stable and predictable guidelines for companies to follow.

<p>False (B)</p> Signup and view all the answers

What is a reverse supply chain concerned with?

<p>Retrieving, reusing, and recycling end-of-life products.</p> Signup and view all the answers

[Blank] regulations place the responsibility for the post-consumer phase of certain goods on producers.

<p>Extended Producer Responsibility</p> Signup and view all the answers

Match the following companies with their sustainable supply chain efforts:

<p>Dell = Established a global supply chain for ocean-bound plastics HP = Utilizes Instant Ink service to manage cartridge returns and reprocessing Unilever = Implemented an incremental approach to regulatory requirements.</p> Signup and view all the answers

Why must adaptable supply chains do more than simply monitor trends?

<p>To enhance their influence and control their supply chains better (B)</p> Signup and view all the answers

Haiti Hope was primarily an environmental project aimed at reforestation.

<p>False (B)</p> Signup and view all the answers

Vertical integration allows companies to have greater control over their supply chains. Give an example of a company that pursued this approach.

<p>Taylor Guitars</p> Signup and view all the answers

When entities within a supply chain are not ______, siloed decision-making can lead to poor overall performance.

<p>aligned</p> Signup and view all the answers

Match the sustainability issues to the supply chain tier they most commonly occur in:

<p>Most Detrimental Sustainability Issues = Reverse Supply Chain</p> Signup and view all the answers

Which of the following is a challenge regarding alignment within supply chains, as mentioned in the text?

<p>Multinationals often lack visibility into their supply chains. (A)</p> Signup and view all the answers

Patagonia only audits its Tier 1 suppliers to ensure they are meeting its standards.

<p>False (B)</p> Signup and view all the answers

Transparency is key for an aligned supply chain. According to the text, what does it require?

<p>Radical transparency that involves all partners in the chain.</p> Signup and view all the answers

Companies can gain better control of their supply networks by improving the sustainability practices in their ______.

<p>sourcing policies</p> Signup and view all the answers

Match the following companies to examples of innovative practices regarding supply chain sustainability:

<p>Dell = Upcycled ocean-bound plastics TerraCycle = LOOP Initiative IKEA = Partnered with Optoro to minimize waste</p> Signup and view all the answers

There is a growing sentiment that what specifically isn't a strong enough tool to reveal what is occurring in a supply chain?

<p>Audits of first-tier suppliers (C)</p> Signup and view all the answers

GreenBlue's Material IQ (MiQ) platform is designed to expose every detail of a product's chemical makeup to downstream buyers.

<p>False (B)</p> Signup and view all the answers

Give an example of incentives needed to ensure that sustainability practices are adopted in supply chains.

<p>Ensure that price and quality are not the only drivers of supply chain performance; that brands take responsibility for the reverse supply chain; and that sustainable practices and information are shared freely between supply chain partners.</p> Signup and view all the answers

As regulations are often ________ they can be unreliable and limited in their ability to drive foundational change within industries.

<p>uncertain</p> Signup and view all the answers

Match the following processes or secondary markets to the correct part of the triple-A supply chain:

<p>Developing structural hierarchies for waste management services = Adaptability Creating transparency and improving coordination through audits and technologies = Alignment Adapting a secondary market = Agility</p> Signup and view all the answers

What action performed by PETA in 2015 had consequences for Patagonia in the same year?

<p>They attacked Patagonia with a video demonstrating animal cruelty at Patagonia's wool supplier (C)</p> Signup and view all the answers

Because it puts more pressure on Zara to reinvent itself in the short term, activism surrounding environment safety and similar causes poses few consequences for the company.

<p>False (B)</p> Signup and view all the answers

Since 2013, what regulation has required companies in the UK to report their carbon emissions?

<p>Emission regulations</p> Signup and view all the answers

As a first step toward becoming fully circular by 2030, IKEA partnered with logistics start-up ______ to minimize the waste produced in its reverse supply chain.

<p>Optoro</p> Signup and view all the answers

Match each company's innovative solution with the correct company:

<p>Taylor Guitars = Improved the sustainability practices in its ebony wood supply chain by vertically integrating Coca-Cola = Enhanced farmer's livelihoods and the quality of the products sourced by reinventing the mango supply chain in Haiti Patagonia = Reduced its number of supplies by 50% to gain more oversight of its supply chain and strengthen individual relationships.</p> Signup and view all the answers

What does the multi-retailer LOOP initiative, which was launched in 2019 by recycler TerraCycle, seek to accomplish?

<p>Reinvent the shopping process by re-introducing reusable packaging and the milkman model (D)</p> Signup and view all the answers

It is sufficient for companies to rely solely on audits of first-tier suppliers to monitor supply chain activities.

<p>False (B)</p> Signup and view all the answers

State three actions sustainability incidents in today's global market often lead companies to.

<p>Scaling auditing practices through partnering with competitors, nonprofits on joint or shared audits, and working with outside parties such as nonprofits or cooperatives to monitor and improve suppliers' practices.</p> Signup and view all the answers

Consumers and companies alike can receive instant insight into whether a product meets fair trade certification requirements or when a printer cartridge requires replacement or recycling by leveraging properly applied _______.

<p>technology</p> Signup and view all the answers

With sustainable practices and transparency in mind, match which effort the following companies took:

<p>Taylor Guitars = Took initiatives on their own to make their supply chains more sustainable Dell = Took initiatives on their own to make their supply chains more sustainable Patagonia = Took initiatives on their own to make their supply chains more sustainable</p> Signup and view all the answers

Flashcards

Triple-A Supply Chains

Supply chains that respond quickly to changes, adjust to market shifts and create incentives for better outcomes.

Agility in Supply Chains

Respond quickly to short-term changes in market demand or supply and handle external disruptions smoothly.

Adaptability in Supply Chains

Adjust supply networks to meet structural shifts in the market.

Alignment in Supply Chains

Create incentives for all supply chain partners to achieve better outcomes.

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Agile Supply Chain

Combining shared intelligence with efficient, decentralized execution.

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Adaptive Supply Chain

Requires flexible network relationships alongside a change management focus.

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Aligned Supply Chain

Necessitates clearly defined roles, responsibilities, and extended, joint performance measures.

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Sustainable Agility

Agility in supply chains considers environmental, social issues, supply chain ethics and employee well-being.

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Sustainable Adaptability

Beyond spotting trends, it involves actively shaping supply chains for greater control, often through innovation.

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Sustainable Alignment

Extends to upper tiers and downstream, incorporating consumer perspectives and ethical sourcing.

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Stakeholder Demands

Addressing a range of stakeholder demands, including regulators, activists, and employees, in supply chain agility.

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Reverse Supply Chain

A company's system for retrieving, reusing, and recycling end-of-life products.

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Extended Producer Responsibility

A regulatory approach holding producers responsible for managing products after consumer use.

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Agile and Sustainable Supply Chain

Broadening a customer-centric approach to include diverse stakeholders, ensuring the entire value chain meets social and environmental demands.

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Adaptable and Sustainable Supply Chain

Spotting trends and adjusting supply networks while proactively seeking to control supply chains.

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Aligned and Sustainable Supply Chains

Information is freely shared between entities, enhanced visibility and collaboration among partners.

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Establishing Sustainable Supply Chains

Requires innovation and process re-evaluation.

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Monitoring Supply Chains

Requires focus on activities of upper-tier suppliers and reverse supply chains to maintain sustainability performance.

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Ensuring Supply Chains

Requires a well-defined business model motivating sustainability, shifting focus beyond just price and quality.

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Ensuring transparency

Radical transparency involves giving consumers access to ensure ethical sourcing.

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Study Notes

  • Professor Hau Lee stipulates that the best supply chains involve agility, adaptability, and alignment, and should also be fast and cost-effective

Triple-A Supply Chains

  • Triple-A supply chains have been studied in academic and trade publications
  • They also influence leader's management approaches
  • There is a need to revisit triple-A definitions for a more socially and environmentally conscious world
  • Potential enablers of and barriers to sustainable triple-A supply chains warrant discussion

Agility

  • Supply chains must respond to market and supply changes and handle external disruptions
  • Agile supply chains combine shared, centralized demand and supply data intelligence with efficient, decentralized execution

Adaptability

  • Supply networks must adjust to meet market structural shifts
  • Adaptive supply chains require flexible network relationships and a change management focus
  • Requires routine collection of intelligence on market product needs and continual technological evolution

Alignment

  • Incentives must exist for all supply chain partners to achieve better outcomes
  • Alignment necessitates roles/responsibilities be clearly defined
  • Extended, joint performance measures that adjust risk, costs, and rewards across the supply chain, are critical

Globalization

  • Supply chains have become increasingly global, connected, and interdependent
  • Greater complexity has reduced visibility and complicated management

Connectivity

  • The growing connectivity and interdependence among different stakeholders within supply chains has led to unforeseen environmental and social issues

Fast Fashion & Agility

  • Fast fashion models that went against the grain of leading to long lead times, now face scrutiny
  • Consumers increasingly demand sustainable clothing options
  • Activists and governments pressure fast-fashion companies to reduce carbon footprints, eliminate waste, and to improve sourcing standards
  • Fast-fashion models rely on continual assortment turnover and promotion of consumption, amplifying waste issues that already exist
  • Short lead times and small production quantities don't necessarily reduce waste
  • The industry produces ~20% of global wastewater, expected to increase with discardable clothing production
  • The apparel industry contributes more to global emissions than aviation and shipping combined

Adaptability & Outsourcing

  • Adaptability involves reacting to unexpected changes in supply and demand and adjusting to long-term market shifts
  • Outsourcing can enhance adaptability by securing economies of scale
  • Also, changes to sourcing locations and relocation of production can occur more easily
  • Outsourcing allowed HP to reduce manufacturing costs and Microsoft to compete with Sony by establishing facilities close to Asia

Sourcing

  • Globalization and outsourcing can cause companies to lose control of sourcing
  • Multinationals sourcing palm oil face scrutiny after investigations revealed human rights violations and illegal deforestation at plantations
  • A single firm like Wilmar that controls 45% of the global palm oil trade, even a large multinational, lacks the power to transform industry relationships and control suppliers, thereby reducing a firm’s capability to adapt its supply chain and promote sustainability

Challenges in Alignment

  • Supply chain complexity challenges alignment, and even if upper-tier suppliers are known, contractual relationships are rare
  • New environmental and social responsibility pressures complicate the equitable division of cost and risk, especially since externalities are rarely included in cost and risk considerations
  • A report by The Sustainability Consortium urgently asks companies to prepare supply chains for potential climate change-related risks
  • Many companies don't act on opportunities to align supply chains' environmental strategies
  • In 2017, only 23% of brands worked with suppliers to reduce supplier emissions, while the carbon emissions of upstream supply chains are four times greater than those of companies’ direct operations
  • Companies must align the environmental decision making of entities in their supply chains just as they have done to improve pricing and quality

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