What exactly is a control tower in the context of supply chain management (SCM)? If you said, "A metaphorical tower where you manage your supply chain," you're close.
Yet, reality is more complicated. Not a physical structure, it is the product of disparate elements fusing into a single apparatus that optimizes your supply chain visibility, giving you improved control and improving/automating decisions.
At least that’s the promise. How it matches the marketplace is still, well, a work in progress.
The Control Tower Concept in Supply Chain Management
Misconceptions about the supply chain control tower concept may be causing some confusion. Rather than just an extensive visual dashboard on your supply chain management (SCM) platform, the control tower is a decision-support tool that relies on advanced data analytics to improve visibility, control, and decision making.
According to Christian Titze, VP Analyst at Gartner, "Supply chain control tower is not a stand-alone SCM application, but an integrated capability embedded in a broader SCM suite or tool. It could be an intelligent data platform providing use-case specific insights, predictions and suggestions."
Creating a supply chain control tower involves the combination of these five elements:
- People
- Process
- Data
- Organization
- Technology
A sixth element — expert services — may also be added to the mix. With all of these elements combined, your fully integrated control tower will help you optimize not only your network visibility, but also your ability to respond to supply chain issues in a timely manner.
Let's look a little closer at each of these elements.
Marshal Your Human Resources
The foremost item in the age-old people, process, and technology (PPT) framework is the people running the network. A professional working in supply chain management might spend their days sourcing steel sheets, microprocessors, or peaches; assigning loads to carriers; operating a warehouse; ensuring timely shipments and deliveries; managing customs compliance; or fulfilling many other roles.
And those are just the everyday tasks. Network optimization, supplier and carrier relationship management, and many long-range planning functions need to be performed by humans. A lot of credit these days goes to artificial intelligence but, without the natural intelligence you rely on from your team, neither AI nor much else would exist. People are first on this list because the part they play in your supply chain control tower is the most fundamental of all the elements.
Define and Refine Your Processes
Besides people, supply chain management is built on a set of processes. These processes are central to the supply chain control tower concept and are themselves comprised of multiple processes. For example, warehousing by itself entails inbound and outbound processing, cross docking, storage, inventory, and more.
Once a process has been established and put into practice, it is a work in progress, with continuous refinement being a necessity that fosters limitless improvement. Well-honed processes that have evolved with your organization carry tremendous value as they help keep your goods moving, your partners collaborating, and your network humming.
In addition to warehousing, processes that are integral to supply chain management include:
- Strategic planning
- Demand planning
- Supply planning
- Procurement
- Manufacturing
- Order fulfillment
- Transportation
Many processes in supply chain management can be automated with software to streamline workflows and reduce the likelihood of human error. People and processes, together, are almost enough to manage a supply chain — but not quite. They need real-time information, organization, and the right tools to get things done.
Use Your Data Wisely and Completely
Big Data and the Internet of Things (IoT) blew the hinges off of any doors blocking the way to end-to-end network visibility and real-time data analysis. A key strength of SCM software and the main source of its value is its capability for predictive analytics.
According to the Thomson Reuters ONESOURCE special report, "How Big Data and Data Analytics Will Transform Supply Chains":
"The three biggest benefits for using big data within supply chains are traceability, relationship management (e.g., better customer service), and forecasting/predictability... Knowing where your goods are located at any point of the supply chain, being able to predict or be notified of supply chain disruptions, and having contingency plans to address these issues have an enormous impact on profitability, resource planning, and customer satisfaction."
By collecting enough relevant and timely data to plan for the future as well as react in the present, you can put your knowledge to use in the best way possible. Data, although a relatively new addition to the PPT framework, has been recognized as crucial to the supply chain control tower concept.
Build and Enhance Your Organization
Organization—or orchestration, to use the trendy term of the moment—not only helps to shape your entire network, but it also brings your costs down by boosting efficiency. Incorporating horizontal and vertical structures, supply chain organization differentiates workers by task along the horizontal axis and by rank along the vertical. The people who harvest raw materials operate on the same level as those doing the manufacturing, distribution, and retail selling. Similarly, production supervisors and retail managers share a plane of operation, each overseeing the workers in their respective purviews.
Taken together, the impressive variety of positions and functions that comprise a single supply chain would be too much to manage without robust technological assistance. Hence the element of organization is aptly complemented by the fifth element of the supply chain control tower concept: technology.
Stay Current With New Technology
Whether delivering invaluable data to your analytics program or finished goods to your customers, technology takes what is possible and makes it easy. An original member of the PPT framework, technology is possibly the most dynamic element of the supply chain control tower concept. The people and processes that formed the basis of supply chain management 30 years ago weren't all that different as compared with today. Technology, however, has advanced dramatically.
The following burgeoning technologies in the world of supply chains can offer your organization serious competitive advantages:
- AI and machine learning
- Cloud computing
- Internet of Things (IoT)
- Blockchain
- Robots and automation
- 3D printing
The SCM software solutions available in the cloud play a primary role in supply chain control towers, offering network-wide observability to aid in decision making. However, responding to network problems becomes an issue without a capable force making it happen for you on the ground.
Find a Partner to Work for You
Partnering with a third-party logistics (3PL) provider will make your supply chain all the more effective, saving your organization time, revenue, and human resources. On top of the people, processes, data, organization, and technology, 3PLs can offer expert service and decades of experience in SCM. Without this final element of priceless expertise, your organization is poised to come up short should there ever be a disruption that you can't handle yourself.
Having an around-the-clock team of operations specialists to manage your network and jump in to fix problems as they arise is your supply chain control tower's ace in the hole. For more information about supply chain control towers and what the right partner can do for your network, contact our team today.
