The Right Supplier

Duryan Cozier
Dec 22, 2023
5 min read

Choosing the Right Supplier using the Triple A model

An organization's operations rely heavily on the relationship between the organization and the components of its supply chain. Within this chain, suppliers are of added significance as they ensure product parts are delivered on time to product manufacturers. Choosing the right supplier is essential and can result in organizations saving costs. While some organizational leaders may choose to focus on the cost that suppliers provide, Lu ( 2011 ) suggests that costs should not be the only factor driving this decision. Other essential factors to consider include the supplier's ability to maintain delivery goals and component quality (Lu, 2011 ). Three suppliers are provided in the provided case study, and details of their pricing, quality, and delivery time are provided. Of the three suppliers, an overseas supplier, a supplier facing financial issues, and a proximity supplier are considered. To make the best decision, it is wise to consider the Triple-A supply chain model, which highlights the importance of agility, adaptability, and alignment (James, 2011)

The Overseas Supplier

According to the provided scenario, the overseas supplier being considered has a price leading to a 90% benefit when compared to outsourcing targeted price. The supplier was also rated at 90%, maintained quality and delivery efficiency of 95%. Being that the company is overseas, it takes three weeks for transport time to be completed. Overseas suppliers can benefit organizations if the product components can be sourced at an affordable enough price. The likeliness of spending more on transportation is a factor that companies that include overseas suppliers must consider, and suitable logistics must be set in place to ensure that once the product component reaches its destination, it can be transported effectively and on time. While the transportation time initially seems like a limitation to using this supplier, it does give logistics a prime opportunity to plot the course of delivered parts.

The supplier facing financial issues.

Option B was a supplier who faced financial issues. Although the supplier competitively offered to price and maintained quality and delivery standards, I would hesitate to use the company because of its unclear financial troubles. Currently, the company highlights positive stats and would appear as a competitive choice. However, until the full extent of the company's financial issues is known, it would serve the organization better to avoid using this supplier until more favorable news is reported. Doing due diligence on a supplier is essential. It can insulate an organization from not filling client orders if a disruption occurs to the supplier related to their financial issues.

The Proximity supplier.

The proximity supplier appears to not be as competitive in pricing as the supplier facing financial issues and the overseas supplier. This choice of supplier only meets 85% of what the organization is seeking in terms of price, 85% quality goals, and 95% delivery goals. For the proximity supplier, delivery is equal to the overseas supplier but less than the supplier facing issues. What allows strength to this consideration is the fact that transportation time for the product is estimated to take ~ 3 hours. This shortened transport time means that manufacturing outlets receive parts and, therefore, products received by distributors faster. While this may be a good choice, it is also one that must be carefully reflected. Incoming product components may lead to products being produced faster. However, and more realistically, it may also lead to a work overload down the chain where manufacturers put components together. The time taken to receive these products is only positive if the facilities receiving them employ efficient and ready workers to bear the weight of more work. If these workers cannot keep up with production, this quick transport may lead to a surplus of components on manufacturer levels.

The best choice of suppliers

Considering the triple-A method can assist procurement managers in making the right decision in choosing a supplier (James, 2011; Lee, 2007). According to the model, supply chains must be agile enough to respond quickly to external disruptions such as weather or transportation-related issues. Organizations also benefit from using adaptable suppliers, suppliers that are willing to foster and maintain a relationship with the organization to ensure efficient supply chain movement. The final A refers to alignment. Alignment refers to how the supplier compliments the desired goals of the organization. Each organization has desired factors that are considered before choosing a supplier, including costs, delivery time, and quality. A well-aligned supplier satisfies factors deemed essential for any given organization (James, 2011; Lee 2007). Each supplier provided in the case study has their advantage and disadvantage necessary to consider before implementing their services.

Supplier A is competitive in price, quality, and delivery; however, this supplier is overseas, and issues in overseas transport can lengthen the time taken to receive the product's components. While agility is a concern when considering overseas options, the company has demonstrated a good history of delivery and quality. Option B is a company that has positive factors that align with operational goals. Still, the supplier is facing financial issues, which may impact their adaptability in responding to pertinent changes that benefit the supply chain movement. The third supplier is a proximity supplier with average price competitiveness, average quality, and delivery. Since operational managers must consider the long-term success of using suppliers, we can eliminate the supplier facing financial issues as it is uncertain how well they can adapt to organizational demands. Now the choice becomes between the overseas and proximity supplier. In an overseas supplier, operation managers can expect to wait longer for their components. However, the wait results in receiving quality products on a higher average than the proximity supplier. Although the proximity supplier can provide components in 3 hours, this shortened time may disrupt the supply chain by creating an excess on the manufacturing level. We can assume that the labor can keep up with the faster incoming products, but this is not always the case. Considering these factors, the overseas supplier seems to be the best choice for this given organization to consider it fits the three A's outlined by the Triple-A model. If the company were to change its desired factors to seek product and quality, I would still favor the overseas supplier as it delivers high quality and competitive pricing. The company satisfies the triple-A model of supply chain choice, which can mean organizational success should it be chosen.

Moreover, the overseas supplier appears to be more competitive and allows for time in between for manufacturing to add components to products. The increased time also gives operation managers time to plan logistics in travel and transport for the components, so mistakes should be limited. Additionally, I would increase the orders of components from the overseas supplier and seek to store excess supplies in a warehouse facility if any delays occur in the transport of batches during ocean travel.

Conclusion.

Lee's (2007) triple-A model is a valuable model for managers to consider when making supply chain decisions. Keeping agility, adaptability, and alignment in mind can helo organizational leaders identify suppliers that can fit their organization (James, 2011, Lee,2007). We were given a choice between three suppliers with varying advantages and disadvantages in the provided case study. Ultimately, the overseas supplier appeared to be the best choice. Despite the longer delivery time, the supplier maintains quality and delivery and is also competitive in price, making it a desirable supplier option for this supply chain.