May 17
The Conductor of the Supply Chain Orchestra - Control Towers!
Right from the procurement of raw materials to shipping off the final products to the end consumers, there are multiple players in the supply chain with their own independent systems where each system comprises of several functions and several nodes and several hundreds of variables and millions of possible outcomes. And all these systems need to play together to work towards a desired outcome.
Before the concept of control towers came to be, all these systems would work independently in silos and thus had already maxed out their time-related KPIs such as lead-times, production times, return time, TATs and so on so forth and time-to-deliver had reached saturation (wouldn’t go down any further). With the ground-breaking advent of control towers, the limits for all these KPIs were challenged and a new bar was set! But what is it that these control towers help us achieve?
Think of a Control Tower like an ATC Tower. You can view all the information about all the flight flying in and out of the airport, which runways are busy, which are empty, and all other back end data to make sure that no flight gets delayed and everything is on-time! Similarly, the Supply Chain Control Tower orchestrates and control the variables, identifies various options and supports decision making to help achieve the business objective.
The global Supply Chain Control Tower market size crossed $3.6 Billion in 2020 and is expected to record a revenue CAGR of 15.9% to reach $11.54 Billion by 2028
Key characteristics of a Control Tower
1. Tower with many sub-towers driving optimal decision making
2. Real-time visibility with real-time response
3. Ecosystem orchestration with what-if scenarios
4. Decision support playbooks with decision horizons and collaboration frameworks
5. Algorithms and analytics (self-learning) empowering people.
Use-cases addressed by Control Towers
These SC Control Towers have use-cases across the all the Supply Chain functions such as Planning, Procurement, Inventory management, Logistics and so on. To talk about some of these use-cases that can be easily addresses by the Control Tower, have a look at the following diagram of order journey through the Supply Chain for a Retail company…
For the same retail company, let’s look at what all use-cases can be addressed across the supply chain:
A. For a Customer Services Manager:
- What is my OTIF (On-time In-full) and CFR projection for the upcoming month? (Addressed from data at delivery stage)
- How many open POs does the customer have for the next 4 weeks? (Addressed from data at order creation and order cleaning stage)
B. For a Logistics Manager:
- What is the project average idle time of trucks at warehouse H? (Addressed by data from carrier arrival stage)
- What is the outbound tonnage projection of product P from Country A? (Addressed by data from shipment creation stage)
C. For a Warehouse Manager:
- Do I have enough packaging material coverage for the next 4 weeks? (Addressed by data from tendering stage)
- Are too many trucks arriving at warehouse W for the next 4 weeks? (Addressed by data from slot booking stage)
These were just a few of the use-cases that can be easily handled by a Control Tower solution. Control tower platforms have adapted to provide a more comprehensive and holistic capability designed to fit the growing demands for wider system integration, efficiency, intelligence, and speed in supply chain. Let’s look at some.
As seen in the Gartner’s Magic Quadrant for Control Towers, the market leaders are Kinaxis, E2Open, ONE, Blue Yonder and Infor. Players such as Blue Yonder and SAP have always had enterprise-wide solutions for all functions across the value chain and now have capabilities for Control Towers as well. This gives them the edge as it becomes better and easier for customers to collaborate on one platform itself rather than having different solutions for different functions and then having to share and transfer data from one system to the other increasing the time costs as well as data storage costs. For customers that do not operate at large scales, there are other platforms available as well such as O9 solutions, MPO and Coupa.
Irrespective of the solution provider, the base offering remains the same. In essence, the control tower aims to provide real-time visibility between trade partners, including businesses, countries, and modes of transportation. It’s a single source of truth that organizes the data and shares it to other stakeholders in a uniform format.
Key differentiators of a SC Control Tower
1. E2E Visibility: Cloud-based, scalable platform with real-time visibility across the Supply Chain; Mimics actual conditions
2. Collaboration: Web-based collaboration portal; Real-time up-to-date information flows with suppliers and customers
3. Streamlined workflow: Logical and streamlined process workflow; Intuitive UI that facilitates timely and data-driven- decision making
4. Connectivity: Integrations that provide timely visibility and more informed decision making amongst the extended value chain
5. Key KPI tracking: Tracking key planning, inventory, logistics and procurement KPIs to provide real-time insights to business users
6. AI/ML: Plans, monitors, measures and optimizes AbbVie supply chain using in-app advanced and predictive capabilities
7. Cost-to-serve vs service level: Data insight platform that automatically checks performance, service and cost areas and help in tradeoff analysis
8. Knowledge management: A comprehensive platform that provides ease of access across all business areas; Single version of truth
9. Alerts and recommendations: Generate persona specific alerts and recommendations and present executable options
10. Decision support: Detects problems early and enables swift resolution through in-application decision support
Way forward
The recent coronavirus pandemic has helped us realize the need to make supply chains more resilient. Everyday, the challenges faced by supply chains are being amplified by enormous disruptions. The need for quick decision making has never been so crucial and it can be addressed only by real-time intelligence to enable faster decision making to pre-empt, avoid and mitigate risks. Thus, by leveraging the latest advanced tech such as AI and ML, we can make the control tower more robust by enabling it to predict possible vulnerabilities and disruptions as well as making it understand upstream and downstream impacts to to generate an even more rapid response. As and when the available advanced technology gets exploited to the fullest, the control towers then wouldn’t even need any human interaction and would function smoothly like clockwork!
