What is a supply chain control tower?
A supply chain control tower is software that links different functions of a supply chain into a central hub, providing cross-functional, real-time data for all stages of the supply chain from planning to last-mile delivery. The primary goal of the supply chain control tower is to drive successful supply chain orchestration from end to end, enabling supply chain professionals across every functional area to make faster, more confident business decisions. This allows them to manage risks more effectively, capitalize on opportunities and take corrective action quickly to deal with any critical issues when they arise.
What are the different types of supply chain control tower software?
Modern supply chains are more complex than ever before. As a result, supply chain professionals have to overcome a variety of challenges, including large numbers of suppliers scattered around the world; increasingly sophisticated products that are assembled from hundreds or thousands of separate components; and a variety of new sales models and distribution channels. They also have to deal with the disruptive impact of volatility caused by various day-to-day challenges as well as large-scale economic, political and natural events.
Navigating this level of complexity requires specialized software that implements a robust set of supply chain control tower capabilities that can be applied across all areas of supply chain planning and execution. These software solutions are designed to give experts across the supply chain a holistic view of operational data.
There are a variety of these purpose-built control tower solutions available on the market. Typically cloud based, these solutions include one or more dashboards that provide insights into key metrics across the entire supply chain. Because they provide end-to-end command and control, these solutions are often integrated into a larger end-to-end supply chain management and orchestration software platform.
In addition to these holistic solutions, there are control tower software solutions that are limited to the command and control of single supply chain functions. For example, there are point solutions for transportation management, inventory management, supply management, or warehouse management. Unlike end-to-end solutions, these solutions do not provide data and insights into any other aspect of the supply chain.
How does control tower software help supply chain professionals?
A key feature of integrated supply chain control tower software solutions is the ability to consolidate disparate information from all functional areas into a single, real-time view. Equipped with the data provided in this view, supply chain professionals gain visibility and insights that help them make better decisions and take the appropriate actions to improve the flow of products through the supply chain.
Control tower software solutions make it possible for supply chain professionals to perform a variety of activities to increase supply chain efficiency and manage volatility, including:
- Anticipating and responding to potential disruptions, risks and opportunities sooner
- Managing day-to-day variability by prioritizing issues, automating routine responses, and taking recommended actions based on key performance indicators (KPIs)
- Monitoring supply chain health with improved visibility into the impact of any potential change to the business
- Capturing and learning from past decisions to drive ongoing improvements
What are the business benefits of supply chain control tower software?
Some of the key business benefits that control tower software can unlock for companies looking to streamline and reduce complexity in their supply chains, include:
- Enhancing operational performance by automating manual tasks, such as routine decision-making and exceptions escalation
- Controlling costs by capturing all cost types, including hidden costs, such as handling, customs, duties, storage, and transportation
- Increasing agility by enabling supply chain professionals to anticipate potential disruptions and mitigate impacts when they do occur
- Improving customer service by ensuring customers get the products they need, when and where they need them
Overall, supply chain control towers help eliminate blind spots that commonly occur between operational order planning and execution. End-to-end visibility and control allows businesses to be capable to promise by optimizing their order allocation in addition to execution functionalities that allow for consistent on-time, in-full (OTIF) deliveries.
What are the quantifiable benefits of control tower software?
Digitizing the supply chain has the potential to deliver quantifiable financial benefits for almost any organization. Automation, for example, reduces labor associated with repetitive tasks and with that comes time and cost savings.
However, companies running large and complex operations that extend over a large global network have the most to gain from implementing control tower technology. Ideally, the control tower functionality will form part of whatever overall supply chain management and orchestration platform the company chooses, one that is capable of integrating their entire end-to-end supply chain ecosystem.
Advanced control tower solutions provide companies with real-time decision-making and advanced problem-solving capabilities across all material vendors and logistic providers. One key advantage of having this level of visibility into, and control over, orders, inventory, and transport is that it allows them to track, trace and optimize every cost detail across the supply chain from start to finish, while also staying flexible and agile when disruptions do occur.
Research from Accenture quantifies the potential financial gains companies can realize by investing in the right control tower software solution. The research shows that by adding advanced control tower capabilities companies can increase their revenues by as much as 1%, reduce their logistics costs between 3-5%, and improve labor efficiency by 10-20%.1
1Supply chain control tower – from visibility to value. https://www.accenture.com/us-en/insights/consulting/supply-chain-control-tower
In their own words: Lessons from supply chain planners
How is control tower software used in different parts of the supply chain?
The leading control tower software solutions are able to pull data from all parts of the supply chain into a single integrated view – from suppliers and manufacturers to warehousing and carriers across all modes and geographies. The specific features of individual control tower solutions vary, but many solutions offer operational features and benefits that extend across inventory management, logistics, transportation and financial. The following sections highlight some of these key control tower capabilities.
Inventory managers can increase visibility across all suppliers, and their suppliers, as well as multiple warehouses across partners. These capabilities help with several aspects of inventory management, including stock forecasting, automated replenishment and in-depth inventory updates across multiple tiers. Key benefits include bringing down duplicate orders and reducing inventory liability.
Logistics specialists can get granular, real-time service-level visibility into each order’s activities and movements. Control tower software spans the full range of logistics processes, including warehouse operations, customs management and handling, in addition to multi-modal transportation and last-mile delivery.
Supply chain transportation specialists benefit from real-time visibility and control across all modes of transportation from a single platform. For example, some solutions allow users to drill down to view products at the item level on a shipment, including articles, order quantities, lot numbers and serial numbers. And by acting on alerts from within the control tower software, companies can minimize third-party fees, detention penalties and demurrage fees.
Finance specialists can capture the different service costs at each step as a product moves through the supply chain, including handling, customs, duties and storage costs. For example, it can take seven or eight steps for an international order to reach its final destination, so associating costs and gaining insight and control over each of these is a critical function only holistic control towers provide.
What are some of the critical capabilities of control tower software?
As supply chain management solutions continue to evolve, software providers are building innovative new capabilities into their control tower solutions that will give supply chain professionals even greater levels of control that will further optimize supply chains and streamline the supply chain planning and execution.
Successful supply chain management requires frequent collaboration among supply chain professionals responsible for different aspects of getting the final product into the hands of the customer. The best control tower solutions enable users to collaborate and plan seamlessly with their suppliers and understand the impacts of any change to their ability to commit.
Real-time supply chain transparency
Improved visibility of data from across the supply chain from a single view is a key feature of holistic control tower solutions. More sophisticated control towers take this a step further to provide supply chain transparency. Increasing transparency goes beyond allowing users to view data on a dashboard and enables them to analyze the data and leverage it to evaluate a variety of scenarios. Supply chain digital twins, which provide a real-time representation of the supply chain, can also be used in conjunction with control tower software to increase transparency.
It takes lots of time and manual effort to plan and re-plan to keep a supply chain functioning no matter what challenges come along. Automation can free up supply chain planners’ valuable time by taking visibility gained from supply chain data inputs into an understanding of what to do next and handle repetitive tasks. Cognitive automation in control tower software goes a step further and learns from the actions and decisions supply chain experts make to drive ongoing improvements to system-generated actions.
Augmented intelligence is another key capability offered by some of the leading supply chain control tower solutions. This involves combining human and machine intelligence to generate the best outcomes. Machines excel at processing vast amounts of data through machine learning and artificial intelligence (AI/ML), and humans excel at handling nuances and intricacies of human relationships. This combination provides users with a highly effective method for responding to, adapting and then executing informed decisions.
What are some best practices for ensuring a successful control tower deployment?
Successful control tower software deployments are typically the result of careful planning. Each company has different requirements and begins the process at a specific stage of supply chain management maturity. What’s more, for companies already engaged in larger digital transformation initiatives, deploying control tower functionality can add to the level of complexity. Consider these four best practices for ensuring a successful control tower deployment:
- Conduct a pre-assessment: Before moving forward, conduct a pre-assessment to define the project scope and then build a control tower roadmap that coordinates the tremendous organizational shift with other projects, priorities and objectives across the organization.
- Get buy-in from all participants: Control tower software implementations have an impact on multiple enterprises, partners, departments, functional areas and personnel across the entire supply chain. That’s why one of the first steps is getting buy-in from all participants to establish a high level of trust. If all the relevant participants are not on board with the vision for the solution, the risks of failure are high. Assessing priorities requires consultation with the entire supply chain network to ensure that everyone’s needs are aligned.
- Set up workshops and scoping sessions: A successful supply chain software implementation is about connecting different worlds. The control tower solution will be part of a greater multi-party ecosystem, so an experienced software provider will set up scoping sessions and workshops to ensure that all stakeholders grasp all the different business requirements and processes involved in the implementation and rollout.
- Focus on continuous improvement: Once integration is complete and the platform is boosting efficiency and collaboration, businesses can focus continuously improving how they leverage the platform, adding new high-value features to their implementation roadmap.