As I wrote earlier, the topic of control towers seems to popping up everywhere lately. But I am sure that there are as many definitions of a control tower as there are analysts and commentators. So I thought I would weigh in with my own definition.
- Let’s start from the perspective that a control tower is a decision making tool, not merely a visibility tool. Visibility is a precursor, a building block. In optimization parlance, visibility is an adequate but not sufficient definition of a control tower.
- A key requirement of a control tower is that several simulations can be performed to test high level hypotheses at a granular level to determine the potential effect on operational and financial metrics, as well as identify any constraints.
- A control tower by definition must cross functional and/or organizational boundaries. I think we can all agree that the term implies a view across a fairly broad span of operations, not a narrow functional perspective.
- Because a control tower crosses function and/or organizational boundaries it must support collaboration in order for people to be able to share perspectives and arrive at consensus and compromise that balances competing objectives and performance measures.
- Direct people to what is important and alert then to what is critical, and of course within their span of control.
- Identify consequences to underlying events, as well as the people who are responsible for both the events and the consequences, so that they can arrive at a joint resolution.
The analogy of the airport control tower has great deal applicability to supply chains. All of the systems required to manage airplane departures and arrivals, airplane cargo management, bookings, maintenance etc. are interwoven into a real-time mesh of information and decision making in addition to the visibility that an elevated position and radar afford. In contrast company supply chains, by and large, are separate, isolated, data 'islands.' The very best of these typically have 'batch' type connections to each other. When things go wrong the signals are late to arrive and impacts difficult to estimate. Imagine a supply chain world that is run like the world's airports, with common standards (like pilot/tower communication always in English) and systems designed to communicate with each other in real-time. This is a very instructive model with standards and collaboration at its heart. Below is what Sameer Patel wrote earlier this year in a blog titled “2011 Business and Technology Forecast,” with my emphasis:
As organizations increasingly start to see the benefits of deploying social and collaborative initiatives to improve employee, customer and partner engagement, they will soon begin to realize that the decade old notion of streamlining repeatable processes made popular by ERP and CRM system-of-record deployments was largely over promised. In practice, customers and prospects have unique questions not answerable in the knowledge base or by marketing; employees living in rigid ERP systems need to constantly find experts who have the best answers and to collaborate with them. And reseller partners are constantly spending time looking for the right answers not available on asynchronous partner portals to keep end customers happy. Silo’d but open collaboration initiatives on activity streams and other enterprise social networking utilities currently being deployed will expose such engagement not historically possible in an ERP or CRM laden design. Consequently, LOB and IT leadership will realize that traditional process approaches and fluid collaborative constructs need to come together to truly accelerate business outcomes.
My definition above focuses on the process and organizational requirements, but also on some key functional capabilities. What is clear from Sameer’s perspective is that by definition the solution will not be coming out of ERP or CRM systems. I think his observation that;
… they will soon begin to realize that the decade old notion of streamlining repeatable processes made popular by ERP and CRM system-of-record deployments was largely over promised.
is particularly important because for years these systems have been sold on the promise that they encapsulate best practice processes. If a process is repeatable isn’t it by definition a standard process and not a best practice process? OK, I concede that the process may be best practice and repeatable in a few organizations, but if everyone deploys a standardized best practice process, is it still best practice? I could go on forever on this topic, but I will leave it to Sameer’s devastating observation that;
In practice, customers and prospects have unique questions not answerable in the knowledge base or by marketing; employees living in rigid ERP systems need to constantly find experts who have the best answers and to collaborate with them.
And I will go further to state that not only should a control tower identify the experts for the employees, but in addition a control tower should allow an employee to suggest a resolution and to test its efficacy against operational and financial objectives. By all means get an expert to validate the assumptions and results, but all too often it will take too long to get expert feedback, especially if the expert must be identified, the problem described to the expert, and then have the expert investigate resolution in a separate system. The customer or prospect will have moved on to other problems by then. In other words a thin collaboration capability that is little more than sharing ideas without the capability of evaluating the impact of the ideas is not likely to be of much value and is only a slight improvement on using phone, FAX, and Excel attachments. The issue isn’t that humans don’t have ideas, but rather that they don’t have a timely and effective manner of testing their ideas at a sufficiently granular level to ensure both feasibility and value. This is the key to having an effective control tower.
Gartner has also being weighing in on the topic of control towers, although nearly all the article focus on logistics visibility, hardly a ground breaking areas. (Any references I make will require access to Gartner materials for full viewing.) In an article titled “Supply Chain and Manufacturing Outsourcing Discussion with Supply Chain Leaders” published on (Michael Dominy, Hussain Mooraj; Nov 22, 2010), the authors define a control tower, that goes beyond logistics, as follows:
a "control tower" or centralized shared service organization to manage relationships and information between the company and its outsourced manufacturing, logistics and other service providers.
Unfortunately they don’t include a mention of collaborative decision making, but they do go on to state in the same article that;
Even if a partner delivers the supply chain visibility and events across the ecosystem of supply chain partners, the enterprise must control and direct the response across the supply network.
I can only presume that being able to control and direct the response across the supply network implies the ability to reach a timely and consensus decision on what that response will be. What I do like about this Gartner article is that it includes a maturity model. I am often guilty of describing nirvana without painting a picture of how to get there and the steps between. Something else that is brought out by the Gartner diagram and article is the applicability of control towers to outsourced environments. In other words when key operational activities are outsourced it is necessary to get on overview of the operations in order to provide the control and direction to the extended supply chain. So far I have focused very much on the definition of an “operational” control tower. In my next blog I will weigh in on a “corporate” control tower that focuses more on the needs of the executive level. In the meantime please give me some feedback. I’d love to hear your ideas about control towers and the convergence of consumer-led social networks concepts, enterprise 2.0 ideas, and control towers.
- Supply chain control tower frequently asked questions
But I can't see that there will be a single control tower. No-one will give up that level of control. The real issue is that companies need a greater degree of visibility and control, especially in outsourced environments.
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