Why implement a control tower in the supply chain?

In an era of globalization where the supply chain must face increasingly unforeseen circumstances and uncertainties, it is crucial that it be responsive and adaptable to all situations. Recent years have taught us that managing this chain is essential to a company’s success. A malfunction at any point in this chain can have an exponential impact on the entire company. However, this chain has become increasingly complex, with suppliers, production sites, and customers spread across the globe, making it difficult to control each stage.

For some years now, a new optimization tool in this field has been highlighted by several technology solution providers to assist in daily and strategic management.

But what is a control tower in the supply chain and how can it be beneficial?

A control tower, also known as a “supply chain control tower”, is a centralized system or platform that allows stakeholders in the supply chain to control and optimize the entire chain end-to-end. The goal is to:

• Centralize data and provide comprehensive visualization.
• Facilitate decision-making through analysis and simulation.
• Improve communication between different departments.
• Simplify and automate event management.

The supply chain encompasses several departments such as procurement, logistics, transportation, planning, distribution, and customer service, among others. Each department has its own performance indicators, goals, and tools, often leading teams to work in silos. However, when an issue arises in the supply chain, such as a supplier delivery delay, all departments can be affected.

For example, the procurement department may be notified of a supplier delivery delay. It can then choose to accept the delay or opt for expedited delivery, which would increase costs. A delay in receiving raw materials can lead to delays in production, distribution, and delivery to customers. Without a control tower tool, the procurement department risks making decisions based solely on its own performance indicators, without considering the impact on the entire chain and on customers. Other departments will be informed late of these impacts, leading to multiple communications.

With access to a control tower tool, the various affected departments can be notified of a supplier delivery delay and immediately assess its impact on their operations. They can then collaborate and conduct simulations to determine how to mitigate the consequences of the delay while limiting costs. The problem is thus addressed proactively, and all stakeholders have visibility into the situation.

By aggregating data, the supply chain team has better visibility into each stage of the chain in real-time. They can monitor the movement of products and inventories regularly to identify risks and issues upstream. Many software solutions offer simulation tools that use historical, real-time, and trend data to validate decisions and assess their impacts.

This tool is used daily by all stakeholders in the supply chain to track their operations and assist in decision-making. For example, if a customer requests a product urgently, the sales team can submit the request, and each link in the chain can check if they have the capacity to respond to the demand without impacting other customers. Additionally, this tool can be used to assess the additional costs that an urgent order would entail.

Factors to Consider

While control tower solutions offer complex analysis and visibility tools, it is important to also adjust the processes and working methods of stakeholders to fully benefit from them.

When implementing a control tower tool, it is crucial to consider the various aspects of technological transformation:

• The scope of the project must be defined, and the technology must be selected based on identified needs and objectives. The tool must integrate with the software already used in the company.
• A change in processes and work habits is necessary to have a positive impact on the company. The tool must be integrated into daily tasks, and the interfaces must be adapted to the needs of each group of employees.
• Employees must be trained on the new tools and supported throughout the transition. Change management strategies must be implemented to ensure adoption by all departments of the company.

Conclusion

A control tower tool in the supply chain can have positive impacts on companies. However, having a tool that provides visibility alone does not guarantee positive results. It is essential to accompany the project with change management throughout the organization to ensure the buy-in of all stakeholders and thus fully benefit from it.