SUPPLY CHAIN CONTROL TOWER–Implementation Approach

SUPPLY CHAIN CONTROL TOWER–Implementation Approach
SUPPLY CHAIN CONTROL TOWER–Implementation Approach

we have explained the design and deployment concept in the previous article. Now we shall start explaining about project phases for control tower implementation with some detail and introduce a few templates which may help you to do better implementation. The following are four phases of control tower implementation and let us discuss them one by one in this article.

1. Identify & prioritize business objectives

2. Analyze, detect, and develop response strategy

3. Enable through technology, design, and deploy

4. Continuous improvement

Phase 1. Identify & prioritize business objectives

In this phase, we need to make high level supply chain assessment to test the alignment of current processes and enablers with supply chain strategy.  As part of assessment, the supply chain material flow and supply chain information flow need to be plotted in form of supply chain nodes and links.  The assessment need to be performed across all supply chain nodes and links to identify key problems and business objectives for control tower initiative.  The objectives identified in this phase shall become reference to define priorities for next phase where the detailed analysis will be done.

By implementing control tower you can expect a complete optimization of the supply chain and have the majority of the enablers in place to support your decisions.  You can define objectives of control tower by considering the following expectations.

  • Notifications, Alerts & Exceptions  
  • Simulation  
  • Collaboration    
  • Capacity  
  • Performance Dashboards
  • People

Let us see how to do that in a simpler way. 

High Level Supply Chain Assessment:

First step is to perform supply chain assessment to find the gaps between supply chain strategy and existing supply chain flows.

Note: The above figures are explained in the first article of the control tower.  Please see first article for more information.
  • Plot high-level supply chain flows (material and information flows) based on the current scenario (as-is process).
  • We can classify flows into the supply chain node and supply chain link.  Node shall do as function and link is the activity going on between two functions.
  • Perform assessment of material flows and information flows in the supply chain, especially links. This shall highlight misalignments with the supply chain strategy.
  • Review all misalignments or improvement opportunities, prioritize, and come up with an optimization plan. At this stage, we can look at what control tower can help in solving or enabling optimization plan.
  • We have developed a robust methodology to analyze supply chain link by link and generate an assessment report containing gaps in information flow, material flow, and financial flows. You can look at below diagrams containing material flow and information flows for one of my clients in automotive tier 1 manufacturing.

In the above diagram of information flows, the codes of individual links are shown as s1 s2, etc.  The most important task is to verify about high level flows whether they are aligned to supply chain strategy or not.  As a highly simplified example: if the manufacturing is using a make-to-order strategy, then all the material flow and information flow should be aligned accordingly.

The key performance measures are listed in supply chain strategy.  The current state and future state of KPI numbers are put into the below table against each supply chain area.  Usually, project performance of supply chain KPIs is highlighted in the supply chain strategy.

The above template of business objectives once filled can guide you to identify control tower requirements and prioritize them.

An example of one business objective can be explained as below:

Supply chain area:  Import purchase order processing

Problem statement: 

  • Lead times are longer and uncertain.  Variation in lead time is high. 
  • No proper visibility of purchase order status especially at import supplier side and transit.
  • Increased stock-outs causing reduced customer service levels

Objective statement:

  • Need to have purchase order visibility for import supplies in China.

Key Performance Indicators:

  • Supplier Lead Time:  Improved from 125 days to 90 days
  • Variation of Lead Time:  Standard deviation 25 days to 10 days (only as an example, more practical numbers or KPI can be selected based on your situation)

You have to define all key business objectives which will cover the scope of the control tower.  At the moment you will not be sure how this is going to achieve as the existing data readiness and detailed business processes are not reviewed yet.  During phase 2 the detailed readiness and requirements will be analyzed.  During phase 3 the prioritization, design and deployment take place.

Phase 2. Analyze, detect, and develop response strategy

Let us discuss phase 2:  Analyze, detect, and develop response strategy now.

1. Identify & prioritize business objectives

2. Analyze, detect, and develop response strategy

3. Enable through technology, design, and deploy

4. Continuous improvement

We can review all business processes, systems, and capabilities (current & future) in the organization and prepare a control tower readiness report in this phase and it becomes a repository for future use. During phase 3 we can do prioritization, design, and implementation.

We have to do following tasks during this phase:

  • Analyze key business processes, enterprise systems (current & future)
  • Identify systems interfaces and high level data flow architecture
  • Define data structures for interfaces in scope
  • Consider IT strategy alignment, total cost of ownership, and systems maintainability
  • Control tower response strategy

Analyze key business processes, enterprise systems (current & future)

Key business processes:

Look at the below picture which is part of the control tower concept.  It will help you to analyze, develop, and response strategy preparation.

You have already prepared the list of business objective in phase 1.  Now you need to connect it to the business processes and technology solutions used. 

The business processes can be reviewed and prioritized and data points can be defined which are required for further detailed analysis.  I quite often use the below template to illustrate the data points required.  The systems in scope which are planned for implementation also need to be included in data points.  For example, if you have not implemented the WMS system, but it scheduled for implementation then it should be included.  Once you prepare the matrix by considering all the details, our next step is to prepare the systems interface requirements.

Identify systems interfaces and high level data flow architecture

This is very important phase where the data flow architecture is prepared.  We have to ensure that we don’t miss any data point here as the change in the scope will cost you a lot.  Make sure all the data points are included in the scope for current and future requirements.

You can look at below picture as a sample of high level data flows.  I made this for my client in large animal feed supply chain.  We use a robust methodology to define end-to-end data flows and data flow architecture design.  Below sample is data flow diagram we prepared for our client as part of overall business process design initiative.

If the organization has already a detailed data structure for entire interfaces across multiple systems and processes, it will be good start.  Otherwise, we have to prepare one for control tower implementation to make sure that it used for current and future interface development initiatives.

Define data structures for interfaces in scope

The data structures need to be prepared for each interface point and table structure need to be defined.  I would like to write a separate article for this topic as this includes detailing of table and field level details of RDBMS.  This also depends on the type of ERP used and other systems. 

As an example look at the following picture which can give you an idea of visibility of individual purchase order right from purchase request to the delivery.  We need to develop similar information master for all key processes across organization.

Consider IT strategy alignment, total cost of ownership, and systems maintainability

Once we have fully defined all the business processes and data points our next step in phase 3 is to identify building blocks for Control Tower which can be designed and implemented. 

Before that, we need to make sure that the IT strategy is aligned with overall integration architecture and technology updates.  For example, if the IT leadership team has planned to change the ERP system or introduce a new WMS system with robotics automation, then we should consider that before going on any system deployment like a control tower where the interface development is the key.

Usually, the control tower solution provided by any IT solution provider does not include complete functionality.  They call it a control tower but it covers only part of the overall expectations. If a comprehensive control tower needs to be built to make a supply chain as a key competitive advantage, then the total cost of ownership needs to be calculated including upgrades and maintainability of the control tower.

Control tower response strategy                                                                               

All the information collected and documented so far can be converted into a comprehensive template which can be used for prioritization of building blocks for control tower.

Phase 3. Enable through technology, design, and deploy

We have discussed so far about our objectives for control tower and all available data points which can be used for control tower building.  Now let us talk about “Enable through technology, design, and deployment”. 

Before going to further details, let us look at the overall control tower concept discussed in my first article Supply chain control tower- design & deployment concept.

The key in this phase is to finalize the scope (control tower building blocks) and design followed by development and implementation.  Usually majority of time goes in defining requirements and data readiness.  The implementation time lines can be from one month to 6 months depend on the scope.

The following are the tasks need to be done as part of phase 3

  • Identify control tower building blocks
    • Priority points for visibility Alerts & exceptions
    • Predictive analytics and models
    • Internal & external collaboration
    • Systems integration
  • Create roadmap
  • Design/Develop control tower solution
  • Implementation

You can prepare control tower scope (building blocks) based on the information in the above template. Prioritization is the key here.  Usually we shall get lost in our interest for visibility and end up in unnecessary reports.  We need to pay attention not to go too detailed in visibility and limit ourselves to key processes.  Once priorities are set and then we can conclude scope statement. This can be used to invite software vendors or application developers to build the control tower. 

Following are some examples for building blocks:

Notifications:

  • Advance shipment notifications and last minute updates in ETA
  • Breakdown in production plant causing list of deliveries affected
  • Alert for critical ingredient if touches safety stock level
  • Truck break down during the delivery and needs immediate attention

Simulation:

  • Production allocation between different plants and optimization of overall capacity and total costs
  • Changes in total demand for particular region and its effect on supply capacity
  • Overall effect of marketing campaigns and discounts and cost and quantity.

Collaboration:

  • Approval of change orders for critical customers
  • Updates on replenishment plans on the go

Capacity:

  • Outbound capacity planning to execute waves in warehouse
  • Capacity planning for inbound shipments for next day

People:

  • Training of control tower operator selected from different supply chain areas

Performance:

  • Supply chain reports and dashboards to show the performance across supply chain

Along with the above sample expectations, we must consider the opportunity to embed machine learning and artificial intelligence into the control tower building blocks.  If we connect to buying experiences and market dynamics, the data can be integrated in demand planning based on social media data etc. Automatic optimization of sales timings, gender preferences, traffic, and other parameter can be evaluated and embedded in the planning logic.  There are multiple tools can be used to directly to use cognitive solutions like IBM Watson analytics. 

Implementation of control tower is little different than a traditional ERP or WMS etc.  Control tower is data intensive and needs overall understanding of supply chain performance.  Supply chain leaders needs to be involved heavily in the design stage as their total requirements have to be taken into consideration along with some innovative opportunities for supply chain optimization.

Phase 4: Continuous improvement.

During this phase the following tasks need to be done continuously to ensure utilization of control tower functionality and also optimization.

Post-implementation benefit realization.

Continuously assess value creation by monitoring KPIs.

Provides input to the roadmap in recommending enhancement of capability maturity.

We provide support for control tower initiative design, requirements blueprinting, technology architecture and implementation as part of supply chain consulting.  Our supply chain consultants have experience in optimizing supply chains by deploying IT solutions and make supply chains competitive.

I bring the risks in implementation once again here from article 1. 

Challenges and Key Risks in the implementation:

The following are risks involved in the control tower building initiative. 

  • We need people to operate control tower.  Without right people, the control tower becomes a dashboard with nice reports and does help to realize the benefits.  Failure to put right people is the biggest risk.
  • No single technology covers the entire control tower requirements.  You need to select multiple technologies with proper alignment to ensure maintainability and reduce costs of upgrades.
  • Hire an external consultant while defining scope to support your internal supply chain team.  Otherwise you may lose sight from an outsider view and sub-optimize processes.
  • Make sure the control tower scope and modifications are informed to current ongoing IT initiatives.   Reduce rework by aligning on-going initiatives with control tower initiative.
  • Don’t overdo on visibility part.  You may lose track while defining end-to-end visibility and not focusing on priorities.
  • Cognitive technology can bring lot of value in unearthing hidden patterns and predicting uncertainties.  Make sure that the solution selected has this feature.
  • Building data flow integration, dash boards, and collaboration is the key part of the solution development.  Make sure that the implementer and solution provider take care of business continuity and avoid risk of losing talent.  Knowledge transfer to internal team is a critical task.  Don’t underestimate it.

fruiSCE™ Control Tower is an advanced solution to provide real-time visibility, collaboration and powerful decision support capability powered by AI and IoT.  fruiSCETM Control Tower can make your supply chain agile and highly competitive to deliver the value.  It is capable of integrating with multiple systems seamlessly and push for proactive decision support to the supply chain leaders.

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