Supply Chain Control Tower

Nucleus Research defines control tower solutions as software which extends the view of an organization’s operation for supply chain planning and execution purposes. While there are a number of competing definitions, at the heart of it, supply chain control towers aim to centralize data and visibility to maximize efficiency, coordination, and collaboration. What sets solutions apart is typically the scope, breadth, and depth of the offer:

• What data is being centralized (Planning? Execution? Both?)
• Across which areas of the supply chain will you gain visibility? (Upstream? Downstream? Reverse? All of the above?)
• What degree of control will you have over the insights you see? (Will you have to log in to another system to act or will you be able to do so from directly within the app?)

Control tower solutions are meant to help businesses better manage their data – such as information about stock and order and distribution requirements – in order to improve the flow of products through regional or global supply chains and meet targets, like delivery schedules and service levels. The more a solution connects this disparate information into a single view – converging both planning and execution, as well as all order and flow types – and enables in-app actionability, the greater a business’ ability to drive improvement across critical supply chain processes, as well as cost reductions, and on-time and in-full (OTIF) delivery.

Control towers have been traditionally seen as transportation-focused data dashboards. However, holistic supply chain control towers span other integral aspects of order planning and execution, pulling data from all corners of the supply chain—from suppliers and manufacturers to warehousing and carriers across all modes and geographies – to cover the full order lifecycle and create meaningful impact at every level.

 

Multi-tier supplier visibility and control enables network inventory management. This entails visibility across all suppliers, suppliers’ suppliers, as well as multiple warehouses across partners on a single view platform. Critical functionalities for stock forecasting, automated replenishment, and in-depth inventory updates across multiple tiers among other capabilities, provide benefits to suppliers such as bringing down duplicate orders and reducing inventory liability, which help improve order fulfillment and demand matching.

 

Logistical support with granular, service-level visibility into each order’s activities and movements. A robust supply chain control tower spans all logistics processes, including warehouse operations, customs management, and handling in addition to multi-modal transportation and last-mile delivery.

 

Real-time transportation visibility and control across all modes (air, ocean, rail, road, parcel) on a single platform, in addition to granular, drill-down views into products at the item level on a shipment, including articles, order quantities, lot numbers, and serial numbers. Visibility and alerts to critical milestones that you can act on immediately from directly within the application further empowers users to minimize 3rd party fees, detention penalties, and demurrage fees.

 

Financial: Supply chain control tower platforms can capture service costs at each step as a product moves through the supply chain, including handling, customs, duties, and storage costs. For example, an international order may have 7 or 8 steps 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. On average, organizations can save between 6-11% of total logistics costs by automating this process.

 

Overall, supply chain control towers help eliminate blind spots that commonly occur between operational order planning and execution. End-to-end visibility and control allow 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.

Results will vary by business need, size, and complexity. Digitizing will help any organization to automate and resolve repetitive tasks in a valuable, time- and cost-saving way. However, companies running large and complex operations have the most to gain from implementing control tower technology, especially one that’s part of an orchestration platform which can integrate their entire end-to-end supply chain ecosystem.

 

If supply chain management extends across a sizeable, global network, there's tremendous advantage in having real-time decision-making and advanced problem-solving across all material vendors and logistics service providers. Visibility and control over all orders, inventory, and transport allows organizations to really track and trace and optimize every cost detail from start to finish and stay flexible and agile during disruption.

In his conversation with a Nucleus Research analyst on the topic, Mauro Gonzalez, founder and CEO of Alkimius Group: “The Innovation and Transformation Platform,” explained that there are both measurable and immeasurable benefits to implementing a supply chain control tower. In Mauro’s experience, just from implementing the technology, businesses will save 4-6% in manpower optimization and 3-7% in operational costs from centralization and digitization. From there, businesses can save anywhere from 5-10% in transport opportunities and an additional 3-5% in efficiencies across inventory, warehousing, distribution, and other parts of the supply chain. Depending on the organization’s maturity and complexity, the numbers could be higher or lower.

Beyond these measurable savings, a holistic control tower solution helps companies manage risks and get closer to their customers – a priority for any successful business model. Improvements in management and communication, as well as data mining and integration, open up new possibilities for companies to really analyze their performance against customer experience and satisfaction. For example, by better answering questions like: What does the customer really want? And how can I anticipate their needs?

No two companies are alike, and everyone begins the process at different stages of maturity. There can also be disparities in maturity across different areas within a company. It’s important to understand that these digital transformations are a journey.

 

Indeed, based on conversations with customers, Nucleus Research analyst Andrew MacMillen revealed that the most common source of failure is project scope. Organizations would do well by conducting a preassessment first and then build a roadmap that coordinates the tremendous organizational shift with other projects, priorities, and objectives.

The same is true for the greater multi-party network; companies must establish trust and buy-in. If your partners aren’t on board with your vision, the solution you choose – no matter how robust – may ultimately fail. As you define your priorities, consult your network about how your needs align.

A successful supply chain software implementation is also about connecting different worlds. The control tower solution will be part of a greater multi-party ecosystem, so a good software provider will set up scoping sessions and workshops to grasp all the different business requirements and processes involved.

Once integration is complete and the platform is boosting efficiency and collaboration, businesses can focus on velocity and continuously improving how they leverage the platform, adding their “could haves” and “would haves” to their implementation roadmap.