SUPPLY CHAIN CONTROL TOWER

Design & Deployment Concept

Contents:

• Supply chain control tower overview
• Components of control tower
• Approach for implementation
• Challenges and risks in implementation

Supply chain control tower overview:

Let us start with a concept of control tower, “supply chain control tower is a central hub with the required technology, organization, and processes to capture and use supply chain data to provide enhanced visibility for short and long term decision making that is aligned with strategic objectives, provide analytics and decision making facility, and execute processes with external and internal collaboration.

Supply chain operations are becoming very complex as customer service expectations are increasing day by day.  The introduction of new technology solutions to manage supply chain operations is a mandate now.  Supply chain collaboration internally and externally becomes vital to manage supply operations efficiently. Visibility becomes a necessity to supply chain managers to manage operations.  However building end-to-end supply chain visibility needs a lot of time and effort, the priority becomes the key.  Control tower should not be confused with visibility initiative.  Control tower covers the high-priority visibility topics, not end-to-end visibility. 

Based on the selection of supply chain part for developing control tower, we can call different names for control towers such as “internal control tower”, which covers the internal part of the organization and business process improvement; “ vertical control tower” covers optimizations production or transportation nodes of one particular supply chain; “horizontal control tower” bundling of materials and flows from comparable chains;  “cross-chain” covers dynamic optimization of different nodes from multiple chains.  For the current discussion in this article, we shall assume a vertical control tower.

Supply chain control tower bring three key distinct benefits; visibility, analytics and decision making, and process orchestration. 

Components of control tower:

The following are five components to be considered to build successful control tower.

1. Outcomes and expectations
2. Supply chain
3. Key processes
4. Technology architecture
5. Integration platform

A. Outcomes and expectations:

We have to identify and prioritize the features required for the control tower to solve the challenges of supply chain.  The below list shows features and benefits expected from well designed and deployed control tower solution.

• Notifications, Alerts& Exceptions:   Any supply chain manager will be glad to know proper notifications, alerts, and exceptions based on thresholds timely. The examples could be delays of production at supplier site, delays in shipment arrival, advance notification of the time of shipment arrival to get capacity ready for the inbound, delay in customer order fulfillment, capacity shortages in manufacturing.   The Control tower should be able to throw exceptions for any possible disturbance in the supply chain to avoid problems with service levels.
• Simulation:  We will be more excited to perform what-if simulations if the system can support them.  Well designed and deployed control tower can provide what-if scenarios based on predictive and prescriptive analytics and machine learning. 
• Collaboration:  In the current complex IT systems landscape, supply chain professionals need to operate multiple systems for different purposes.  We need to collaborate with supply chain members in an integrated way without losing sight.  The Control tower should be able to provide us the collaboration feature where the key actions can be executed.  Managers will be glad to have approval options and revise the plans on the go. 
• Capacity:  As the advance notifications and alerts take place for all supply chain events.  The capacity planning should be done in an integrated way.   For example, the resources required for inbound operations for receiving large shipments from sea cargo.  The capacity planning facility gives supply chain managers to help them allocate resources optimally which can save costs.
• Performance Dashboards: Well-defined and updated dashboards are the primary requirements of any control tower.  The key performance indicators are displayed through dashboards in alignment with strategy.  We need to identify and define KPIs to be displayed irrespective of constraints. This will become the basis for designing a control tower.
• People: The control tower needs to be operated by supply chain professionals who understand the entire supply chain operations and able to collaborate with all people involved in supply chain orchestration.  Identifying and training control tower operators is the key to make the control tower initiative a success.  The organization structure needs to be adjusted to include these roles.

B. Supply chain:

Once we define the outcomes and expectations of the control tower, the first step is to understand the supply chain infrastructure and structural capabilities, and supply chain strategy.  We need to review all supply chain internal and external members and their operations.  This will help us to identify key areas of the supply chain where the control tower can add value, for example, what are the weak links and key pain points.  If there is any alignment gap in supply chain strategy, that has to be identified upfront and addressed to the leadership team. 

We usually start with a high-level assessment of supply chain performance to quickly understand the operations.  To make sure we don’t miss any key points, we recommend using the SCOR framework to understand end-to-end supply chain processes, like plan-source-make-delivery-return. 

C. Key Processes:  

We need to identify key supply chain business processes which are influenced by the control tower initiative.  Priority business process performance is critical and hence the control tower building should be completely aligned with the business process orchestration.  Usually, the ERP implementation once completed is very hard to modify.  Introducing a control tower may cause some updates on the process such as approval or re-planning features.  This is an important step where the business process owners should be involved and their expectations with the control tower should be clearly understood.  You may find some resistance to change from few business users.  If the business process is performed through multiple systems, then it gives a clear understanding of how the data is flowing.  Accordingly, data structures and interface requirements for the control tower initiative can be designed. 

The supply chain visibility is the key part of the control tower function.  The visibility requirements and priority should be defined while reviewing business processes.  We also need to understand what we prefer to predict in advance based on the data assets available.  This is a very important exercise that helps to go to the next step of working on systems and data integrations.

D. Systems Landscape:

This is the complex step where all systems and data assets are thoroughly reviewed.  The core data comes through the ERP system.  If ERP implementation is done completely then the majority of data inputs comes from here and all tier 1 and tier 2 ERPs provide very flexible data interface feature (APIs). 

As defined in earlier step of reviewing key business processes, all systems involved in business process execution need to be reviewed.  The following are possible systems which needs integrated with control tower.

• Enterprise Resource Planning (ERP)
• Customer Relationship Management (CRM)
• Supplier Relationship Management (SRM)
• Production Control Systems
• IT systems of Partners ( Logistics providers, Sub-contractors, Key vendors and customers etc.,)
• Data Warehousing and BI systems
• Supply Chain Planning solutions
• Performance Management solutions
• IoT devices such as RFID, barcodes, sensors etc.

Designing the data structures is a very critical step in designing and deploying a control tower solution.  The data structures need to be defined considering current requirements and future requirements.  As the systems interface development is complicated considering the upgrades, resource requirements, and support from technology partners, we need to design the data structures as comprehensively as possible.

E. Integration Platform:

Selecting the right integration platform to build a control tower is a very important stage.  Having defined the data structures, selecting the right tool becomes easy.  There are several platforms available for integration and we can choose the technology based on alignment with IT strategy.

We need to consider following points while selecting the integration platform.

• Data acquisition
• Device management
• Data storage and persistence
• Multi-enterprise network
• Data security and access features

Before we talk about approach for control tower implementation, let us see few benefits expected.

• Improve operational performance by optimizing each order flow across supply chain, carriers, and outsourced partners.
• Create best-in-class customer service with on-time and right-cost deliveries.
• Reduce inventory across supply chain through visibility and optimized order flow.
• Lower excess penalties for expedition, demurrage, detention etc., through visibility and alerts to critical milestones.
• Gain better control and visibility of outsourced partners.
• Predict uncertainties through analytics and data assets.

Approach for Implementation

As there are many different tasks required to be done to develop an effective control tower, we need to follow a structured approach.  The following figure shows a high-level approach. 

We shall discuss more details of the approach and a detailed project plan in the next episode.

Challenges and Key Risks in the implementation:

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

• We need people to operate the control tower.  Without the right people, the control tower becomes a dashboard with nice reports and does help to realize the benefits.  Failure to put the 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 the costs of upgrades.
• Hire an external consultant while defining scope to support your internal supply chain team.  Otherwise, you may lose sight of an outsider view and sub-optimize processes.
• Make sure the control tower scope and modifications are informed of current ongoing IT initiatives.  Reduce rework by aligning ongoing initiatives with the control tower initiative.
• Don’t overdo on the visibility part.  You may lose track while defining end-to-end visibility and not focusing on priorities.
• Cognitive technology can bring a lot of value in unearthing hidden patterns and predicting uncertainties.  Make sure that the solution selected has this feature.
• Building data flow integration, dashboards, 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 the risk of losing talent.  Knowledge transfer to an 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.  fruiSCE^® Control Tower can make your supply chain agile and highly competitive to deliver value.  It is capable of integrating with multiple systems seamlessly and push for proactive decision support to the supply chain leaders.