The
latest hot topic within the supply chain lexicon is Control Towers. The name
itself evokes images of air traffic controllers keeping a sharp eye over air
traffic, and indeed the concept is very similar. Croydon Airport was the first
to introduce an Air Traffic Control Tower in the 1920’s so that it had a
literal birds-eye view of flights so that the airport could better support
pilots and ground crew and mitigate the risk of accidents. The concept quickly
caught on and evolved to the highly technical discipline we know today.
Potential
for Supply Chain
In
much the same way, supply chain control towers offer a consolidated
view of the entire chain. They provide insight and alerts into events
occurring throughout the chain. The model has further evolved into intelligent
hubs that not only provide in-depth visibility but also collate, analyse and
utilise data to make informed predictive, and indeed prescriptive,
decisions right from the point of order through to delivery to end consumer,
and even beyond.
By
definition a supply chain control tower is a tool, either digital or physical
or a combination of both, that provides visibility across the entire supply
chain both holistically and granularly. With the rise of supply chain networks,
encompassing multi-party entities both up and downstream that are highly
responsive to consumer demand, control towers are advancing beyond simple
decision supporting visibility into autonomous control and decision making
thanks to advancing artificial intelligence.
The
benefits it offers
While
control towers increasingly rely on technology to provide more sophisticated
solutions, purely analytical towers typically only leverage planning and other
data into a consolidated view often lacking the operational ability to action insights
quickly. A true control tower should be a combination of both operational and
data-driven capabilities, thereby marrying supply chain visibility and
analytics with the ability to do something in real-time from an operational
perspective.
What
does it look like?
A
supply chain can, from a high-level, be broken down into four main sections
namely, purchase order, manufacture, distribution and transportation and
future-focused control towers aim to provide visibility over all four from a
centralised hub. From an operational point-of-view, a control tower provides
visibility across all four steps, allowing for exception management to a very
granular level. Dynamic inventory sourcing across multiple suppliers allows for
the optimisation of transportation as well as internal capacity planning and
SLA monitoring. Analytic capabilities provide the so-called “on-time, in-full”
reporting capabilities, as well as a holistic view of the total-cost-to-serve,
by accurately consolidating transport, supplier, activity and other costs on an
individual SKU basis.
The
functionality provided by control tower models within a supply chain are
impressive and can orchestrate entire supply networks to run more efficiently,
providing benefit for all partners within the chain. The challenge lies in the
mindset shift required by supply chain professionals to one of letting go of
control to gain advantage.
There
needs to be a realisation that a fulfilment partner, who owns and
manages the entire chain on behalf of a client is the first step in building a
successful control tower, followed by the almost counter intuitive
understanding that by releasing day-to-day control to such a model, more
control is in fact gained. The implementation of a control tower model is by no
means easy, but once done correctly, unlocks immense value. By identifying a
partner to implement such a hub and then allowing such to manage all the
necessary steps (and exceptions) in real-time, the benefit for all within the
value chain network will result in a competitive advantage in an increasingly
complex supply chain environment, and indeed, global marketplace.
Contributed by the team at Barloworld
Logistics