Control Towers in Supply Chain and Successful Deployment
According to Gartner’s 2021 Future of Supply Chain Survey, 43% of enterprises are focusing on digitalizing the supply chain and integrating new technology to capture real-time data.
Supply chain control towers are a key component of staying ahead of the competition in today’s market. In fact, most enterprises have at least one, if not several.
At its core, a supply chain control tower combines people, processes, data, organization, and technology to provide visibility across divisions, countries, and modalities and proactively manage supply chains.
Read on to learn about the different types of control towers in the supply chain, along with what technologies make up each, and the steps for successful deployment.
Transportation Spend Management (TSM) is a driving force behind building an appropriate “tech stack” which is used to create a Control Tower. The Trax TSM solution provides enterprises with a data-driven approach to analyzing, optimizing, and leading the operational performance of a company’s logistics, the factors impacting transportation spend, and the value delivered to customers.
5 Types of Control Towers in Supply Chain
Just as a supply chain has different types of goals, there are specific tools to achieve them.
When dealing with control towers in the supply chain, executives should consider five key types:
1. Logistics and Transportation Control Towers
Logistics and transportation control towers provide visibility into both inbound and outbound logistics. Key features include shipping notifications, delivery dates, and track-and-trace information. The flow of financial information through the supply chain can also be tracked within the control tower. The right TSM and TMS enable logistics and transportation control towers to succeed in the supply chain.
2. Fulfillment Control Towers
Fulfillment control towers are focused on reducing cost-to-serve by assisting with packaging shipments and expediting orders.
3. Inventory Control Towers
Inventory control towers emphasize avoiding inventory shortages and outages. The process includes enabling real-time insights into inventory management.
4. Supply Assurance Control Towers
Supply assurance control towers evaluate the appropriate level of supply available and ensure the right volume of supply is planned for delivery.
5. E2E Control Towers
The E2E control towers provide complete visibility across systems and processes. This includes internal, external, and interdepartmental applications.
Components of a Control Tower in Supply Chain
There are commonalities between the different types of control towers discussed above.
In one study sponsored by the The Institution of Engineering and Technology, researchers established that a control tower in the supply chain should be capable of achieving the following outcomes:
End-to-End Visibility
Supply chain visibility can be considered a capability, rather than simply information-sharing. For 79% of the companies surveyed, visibility at the process level was the main concern. Supply chain visibility is positively correlated with operational performance.
Automation
Automating business processes is part of scheduling routines that can be completed without human interaction (for the most part). This allows leaders to better understand how and when processes are executed and how they impact performance.
Collaboration
When it comes to digital automation, humans are still necessary to interact and oversee operations. Human-machine collaboration is important because it allows supply chain executives to better understand process management and integration.
Real-time Monitoring
Real-time monitoring improves customer service in the long run by tracking and recording all data related to demand-supply performance. By tracking this in real-time, enterprises increase the cost-effectiveness of scheduling and automating tasks.
Successful Control Tower Deployment
When deploying a supply chain control tower, there are two major paths one can go down: buying or building. If a company decides to buy, this involves incorporating control tower capabilities into its TSM platform. On the other hand, building a control tower is a more complex process.
First, the enterprise must create a data lake and then apply its specific business intelligence to it. These control towers are beneficial specifically for data visualizations. However, newer vendors offer additional data science capabilities such as artificial intelligence and machine learning algorithms to develop recommendations for future actions.
Steps for Implementation
Once a company chooses building or buying, the next step is implementation, which involves four key parts: identifying business goals, developing a response strategy, enabling the response through a tech stack, and continuous improvements.
A high-level supply chain assessment can uncover important business objectives as well as issues in a company’s current supply chain strategy and operational processes. It is also necessary to prioritize business issues based on gaps between the current state and the ideal state, the ease of making the change, and the potential outcomes in terms of KPIs.
Once it is time to deploy, supply chain leaders must work with a roadmap to understand the key components, collaboration opportunities, predictive models needed, target capacity, and reporting/analytics options.
However, even after the control tower is deployed, businesses continuously evaluate the state of the supply chain control towers by tracking core KPIs and making enhancements to further mature the transportation spend management process.
Potential Challenges to Implementing a Supply Chain Control Tower
Even when carefully following a roadmap, obstacles are bound to arise throughout the deployment stage.
Some of the main things that can stand in the way of beginning a control tower initiative are:
- Lack of clarity on the scope of the project
- Resistance to breaking down silos
- Missing the required talent/skills to complete the work
- Uncertainty regarding the buy vs. build decision
- Ambiguous technology requirements
By anticipating these challenges, companies can plan effectively before beginning the control tower initiative.
This is when leveraging the right TMS and TSM solution makes a difference.
Unlocking the Power of a Supply Chain Control Tower
With the right Transportation Management System (TMS) and TSM solution, companies successfully do and see supply chain operational processes.
Trax’s proven TSM platform incorporates a master data management approach to collecting, standardizing, curating, and analyzing all data points across the supply chain, making it possible to build better supply chain control towers.
Contact Trax today to architect the essential supply chain control towers for your business’s TSM maturity.