The Triple-A Supply Chain

Hau Lee

The holy grails of supply chain management are high speed and low cost—or are they? Though necessary, they aren’t sufficient to give companies a sustainable competitive advantage over rivals. Consider these disturbing statistics: Though U.S. supply chains became significantly faster and cheaper between 1980 and 2000, product markdowns owing to excess inventory jumped from 10% to 30% of total units sold—while customer satisfaction with product availability plummeted. But some companies—Wal-Mart,, Dell Computer—have bucked these trends. How? Their supply chains aren’t just fast and cost-effective.