Modern Control Towers Are The Solution
As a result of geopolitical activities, economic action is being reallocated around the world. This reallocation is becoming the leading driver to new supply chain risks beyond those experienced during COVID-19. In order to mitigate these risks it is suggested that businesses renew their focus on supply chain management. Supply chain control towers may be the solution to these risks. Supply chain control towers offer comprehensive visibility and data-driven insights that empower organizations to optimize their supply chain networks, improve efficiency, mitigate risks, and deliver better customer experiences.
It is well known that supply chain is typically one of the most complex functions within an organization and tends to be mismanaged and misunderstood. The impacts of the pandemic were disastrous and the global supply chain is still recovering. But the lack of understanding from operations and technology leaders revolving around exactly what is occurring has lead to what is presently happening across the supply chain network. This has further complicated the efforts toward successful control of the process.
Info-Tech Research Group has released a new and timely research-based blueprint to help operations leaders and chief information officers (CIOs) implement a supply chain control tower to alleviate uncertainty and mitigate risk
In the new resource, Using Supply Chain Control Tower for Competitive Differentiation, the IT research and advisory firm explains that a supply chain control tower (SCCT) is a similar concept to an airport control tower. It is a central hub of people, processes, data coupled with visualizations, and analytics technologies that capture and process supply chain data for short- and long-term decision-making.
“The goal of a supply chain control tower is to capture real-time integrated supply chain data from across all touchpoints to enable enhanced visibility. That visibility can then be utilized to optimize the supply chain through improved collaboration and information for making informed decisions. The primary goal is to make all points in the supply chain environment visible to the enterprise.”
Kevin Tucker, principal research director of manufacturing research at Info-Tech Research Group
The best supply chain control towers use advanced capabilities. Analytics tools, real time data and telescopic digital twins that enable an organization’s ability to simulate the entire internal and external supply process. The firm further clarifies in the blueprint that adopting a capability-based approach that considers a holistically interconnected environment for end-to-end visibility of the supply chain is an integral part of addressing supply chain challenges in the future.
“A modern supply chain control tower answers the call as a central hub of information that acts as an overarching view into and across an organization’s supply chain. It will consider the current state of the supply chain, infrastructure, and the financials across the entire global supply chain network,”
Kevin Tucker, principal research director of manufacturing research at Info-Tech Research Group
What Types Of Control Towers Exist And What Are Their Purpose?
Supply chain control towers are powerful tools that help organizations gain visibility and control over their supply chain networks. They serve as a centralized hub that aggregates and analyzes real-time data from various sources, enabling better decision-making, problem-solving, and optimization. There are different types of supply chain control towers, each with its focus and capabilities. Let’s explore some of them and understand how they can improve supply chain networks:
- Logistics Control Tower: This type of control tower primarily focuses on transportation and logistics operations. It provides real-time visibility into the movement of goods, shipment tracking, and delivery status. By monitoring and managing transportation activities, logistics control towers can optimize routes, reduce transportation costs, minimize delays, and enhance overall supply chain efficiency.
- Inventory Control Tower: Inventory is a critical aspect of the supply chain, and an inventory control tower helps manage it effectively. It provides insights into stock levels, demand forecasts, and replenishment requirements. By optimizing inventory levels, organizations can prevent stockouts, reduce excess inventory holding costs, and improve order fulfillment rates.
- Demand Control Tower: This type of control tower focuses on demand forecasting and management. It analyzes customer demand patterns, historical sales data, and market trends to predict future demand more accurately. By aligning production and distribution with anticipated demand, organizations can improve inventory turnover and minimize stockouts, leading to better customer satisfaction.
- Supplier Control Tower: Supplier relationships play a crucial role in a supply chain’s success. A supplier control tower helps monitor supplier performance, assess risks, and ensure compliance. By having a clear view of supplier activities, organizations can identify potential bottlenecks, address quality issues, and build more reliable supplier partnerships.
- Financial Control Tower: This control tower focuses on financial aspects of the supply chain, such as cost management, budgeting, and financial risk assessment. By analyzing financial data across the supply chain, organizations can identify cost-saving opportunities, optimize spending, and reduce financial risks associated with supply chain disruptions.
- Multi-Tier Control Tower: Multi-tier control towers extend visibility beyond the immediate suppliers and customers to encompass the entire supply chain network. This comprehensive view enables organizations to identify potential risks, forecast demand more accurately, optimize inventory levels, and streamline collaboration across multiple tiers of suppliers.
How do supply chain control towers improve supply chain networks?
- Real-time Visibility: Control towers provide real-time data from various sources, enabling organizations to make informed and timely decisions. This visibility helps identify issues and opportunities as they arise, allowing for quicker responses to disruptions and changes in demand.
- Data-Driven Decision-Making: With access to accurate and up-to-date information, organizations can base their decisions on data rather than assumptions. This leads to more accurate demand forecasting, inventory planning, and optimized transportation routes.
- Improved Collaboration: Control towers promote collaboration among different stakeholders in the supply chain. By sharing data and insights, suppliers, manufacturers, and distributors can work together more effectively, enhancing overall supply chain efficiency.
- Risk Mitigation: Control towers allow organizations to identify potential risks and vulnerabilities in the supply chain. With this knowledge, they can proactively address these issues, reduce disruptions, and build resilience into the supply chain.
- Cost Optimization: By optimizing inventory levels, transportation routes, and production schedules, supply chain control towers help reduce costs and enhance overall operational efficiency.
- Enhanced Customer Service: A well-functioning supply chain control tower enables organizations to improve on-time deliveries, reduce lead times, and enhance order fulfillment accuracy, ultimately leading to higher customer satisfaction.
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