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When you search online for “Supply Chain Control Tower”, you will likely find complex diagrams, theoretical schematics, and futuristic pictures of screens akin to those featured in sci-fi movies. You are also likely to encounter buzzwords like ‘the Cloud’, ’Blockchain’ and ‘Internet of Things’. But what really is a control tower, and is it the silver bullet to solve all your supply chain problems?
What is a supply chain control tower?
Put simply, a control tower is a software platform and its associated processes. It reads from your existing data sources and consolidates the information in a way that is easy to consume, usually a dashboard with key metrics. In addition to your own data, it can import data from suppliers’ and customers’ systems, enhancing the level of information available and facilitating collaboration across your entire supply chain.
Some users choose to put the software interface on large screens in a central location with those driving the supply chain, physically manifesting the control tower concept. More often, the key players in the supply chain will be geographically dispersed and will access the interface from online.
A control tower allows decisions and changes to be made within the software, e.g. expedite an order or adjust the size of a production run. More advanced control tower software includes predictive and prescriptive analytics to provide better insights into your supply chain and suggest actions to optimise its management.
There are numerous software providers on the market, offering everything from basic visibility and alerts to decision support and autonomous control. Providers are likely to charge an upfront implementation cost and ongoing licensing/access fees.
What can supply chain control towers do?
A supply chain control tower may be useful if you have:
- Excess inventory and/or stockouts
- Inflated working capital
- Slow response times, late and/or missed deliveries
- Lack of transparency
- Labour intensive and unreliable processes
- Significant business risk associated with effective supply chain management
- Poor collaboration and miscommunication with vendors
For some businesses, the complexity of their supply chain, and their ability to manage it, becomes a barrier to expansion. In this case, the visibility and improved ease of management that a control tower brings could help to remove that barrier.
Supply chain control towers provide better visibility, but they also have inherent limitations
1. Control towers cannot provide visibility on things that are not physically tracked, so it is important to design and invest in tracking systems upfront (if they don’t yet exist). This could include:
- RFID tags, barcodes and scanners to track product movement past checkpoints
- GPS trackers and geofencing to record when trucks arrive at warehouses
- Thermometers with wireless connectivity to monitor temperatures within cold chains
2. The quality of system data and the frequency it is refreshed affects what is displayed in the control tower. For example, if production volumes are updated once a day, you will be unable to see accurate real-time adjustments in inventory forecasts.
3. A control tower provides valuable information on operations, but that alone won’t change the business – you need effective review- and decision-making disciplines to achieve this. To successfully introduce a control tower, the organisation needs to plan and manage the people side of this change. This should be accompanied by effective stakeholder engagement, communication and roll-out plans, especially on the front line.
4. If the success of the control tower is dependent on access to your suppliers’ systems, you may need to change how you work together and consider how to encourage your suppliers to adopt a different way of working.
Before introducing a supply chain control tower, it is important to understand what problem you are trying to solve. In some situations, this will include establishing a control tower, while others do not – reflecting what is important to your operations and your broader supply chain.
We regularly help clients diagnose their underlying supply chain management issues, then assist in implementing improvements in a rapid, sustainable way. Where our clients choose to establish a supply chain control tower, we recommend an upfront programme of work to prepare the organisation and maximise value from their investment.
