What with challenges like last-mile issues, emissions regulations and the chance of a Brexit, the supply chain can seem very similar to a multi-headed dragon. But how can it be trained? A control tower appears to offer the answer to this increasingly urgent question. A structured approach to monitoring and managing the supply chain from a single hub: it sounds almost too good to be true – and it often is, because the path to setting up an effective control tower is littered with pitfalls. This article outlines the advantages of control towers and provides tips for avoiding the pitfalls.
Significant benefits and cost savings
A control tower creates more visibility, more control and a much smoother-running logistics process, in both the long term and the short term. The control tower gathers data from various sources and applies detailed ‘business rules’ to turn it into information as the basis for decision-making. That results in significant benefits and cost savings, including in terms of:
- End-to-end supply chain visibility
- Planning, optimization and real-time monitoring of shipments
- Predictive analysis to identify problems early
- Streamlined communication between all stakeholders
- Improved inventory management
- Simplified freight handling
In other words, a control tower gives supply chain professionals insight into inventory, transport planning, warehouse management and workforce planning. They receive information that helps them to not only make strategic decisions, but also to reduce the number of trips, choose alternative routes, manage stocks, estimate risks or spot potential bottlenecks before they occur.
But therein lies the danger. Because if information is being exchanged in the whole supply chain, the chain is only as strong as its weakest link. That weakness can manifest itself in various ways. Carriers that have not yet undergone the digital transformation or that do not have a sound technical strategy pose a risk for the integrity of the data used in the control tower for decision-making purposes. Besides that, many supply chain management systems are focused only on optimizing the goods flows within the organization’s own four walls. Once the organization opens its doors (both figuratively and literally speaking) to a control tower, that creates problems with compatibility or metadata. In that case, end-to-end supply chain visibility actually means insight into just a small part of the chain. Furthermore, although it is nice to be able to identify potential problems in advance, what happens next? A control tower that merely issues alerts has limited added value in the logistics process. To be truly effective, it must also enable managers to take action – not only by making manual changes, but also by suggesting possible solutions. This is only possible if the control tower is able to learn from the past and can act autonomously based on strict business rules. Last but not least, a control tower that relies too heavily on specific carriers, warehouses or shippers can prevent the customer from discovering the most efficient logistics solution.
So how can you avoid the pitfalls?
The ideal control tower is a broad ecosystem based on transparency, continuous improvements and extremely solid generic data. To achieve this, it is above all important to make the right choices at the right time. Choices that are not only focused on operational processes, but that also demand tactical and strategic decisions. At IDS we know from experience that the key factors for successful control towers are scope, speed and patience. Start small, achieve results and don’t scale up until the control tower has proven its worth. We help our customers by providing independent control towers that are precisely aligned with their specific supply chain needs, at a pace that suits them. In fact, we sometimes even advise our customers to take things a little more slowly so that they can gather enough speed to subsequently train the dragon.
On 28 March, we will be joining Buck Consultants International (BCI) during the IMCC College Tour to discuss these success factors in more detail. Would you like to attend? Sign up now by sending an email to: email@example.com.