Supply Chain Control Tower: Old Wine in New Bottle?

Nowadays in most of the discussions around supply chain, there is a mention of control tower as a magic wand for solving supply chain issues. While there is a class of professionals who see a lot of value in it but there is another class which views it with skepticism as old wine in new bottle. There is another class of professionals who do not understand and think of it as something very sophisticated and needs a lot of investment. Sandeep Chatterjee, Associate Director – Technology Consulting, Deloitte, offers insights into the changing paradigms of supply chain control towers…

Sandeep Chatterjee comes with expertise in key areas including supply chain management, business process reengineering, emerging countries enablement, network optimization, ERP Implementation and ERP Footprint Review across multiple industries and geographies. He holds an MBA from Indian Institute of Management, Kozhikode, and a Bachelor of Engineering (Mechanical), Bengal Engineering and Science University, Shibpur (formerly Bengal Engineering College). Sandeep is also the Member of Board of Governors, IIM Kozhikode & the CEO and Chairman of International Supply Chain Education Alliance (ISCEA).

Essential Elements of a Control Tower

Modules

Components

Start by determining the applicable use case based on priorities and business challenges...

Functional components of a Control Tower are enabled by technical layers, including:

Ingrain the solution into the business by creating processes and shaping the operating model to sustain the capability, through:

 Voice of the customer  Factory control  Global trade and customs  Production planning  Synchronized planning  Quality and recall mgmt.  Customer service  Logistics  Sourcing and procurement  Technical operations  Aftermarket mgmt.  Supply chain risk

Functional components

 End-to-end visibility  Exception mgmt.  Scenario analysis  Optimized intelligent response  Self-driving execution

Technical layers

 Presentation  Decision support  Communication  Analytics  Data Integration and ingestion  Security and admin  Data sources

Process and operating model

 Capabilities assessment  Process design  Op model design  Governance structure  Communication strategy  Training

AS per the Merriam-Webster dictionary, control tower is an elevated glass-enclosed structure which has an unobstructed view of a landing field and from which air traffic may be controlled usually by radio. To extend it to business, it is an end-to-end solution that equips organizations with new enterprise capabilities including real-time data visibility, proactive alerts, prescriptive insights, and self-driving execution of the supply chain.

Having a cockpit view of the organization is imperative for any CXO. But what typically used to happen in earlier days was it was more of a reactive mechanism. Organizations used to collect data (there was no mechanism to collect it real time) and do a post-mortem once the event had occurred. This was a mechanism to avoid the past mistakes but in business no two scenarios are identical. As supply chains become more adaptive (mix of efficient and responsive), the need of the hour is to change course real time once we observe certain anomalies in the chain.

Some of the perceived benefits of a control tower are as follows:

♦ It is an end-to-end solution that provides real-time alerts, strategic insights and enhanced supply chain effectiveness ♦ It enhances new enterprise

capabilities by facilitating a new, better way of working, and often requires new processes and organization structures ♦ It breaks traditional functional silos by integrating disparate data sources, processes, and extended supply chain to deliver real-time connectivity, enhanced visibility, and prescriptive insights ♦ It has the capability to use analytics to enable self-driving execution, thanks to the huge technological breakthrough over the years wherein any system can talk to any other system in a cost-effective manner.

It uses science-driven algorithms and cognitive feedback loops to automatically kick-off certain actions when tolerance in a metric is violated.

While we understand all this, there are some prevailing myths around this…

Myth 1: This is a room with big screens It is as simple as a dashboard on your hand-held device which provides an enterprise view.

Myth 2: It is fancy dashboard There is an intelligence built in wherein the supply chain can make autonomous decisions based on the cognitive feedback loop. Myth 3: It needs investment in technology It is all about connecting the disparate systems and plugging in AI and ML rules. All these are now affordable given the huge strides in technology.

Myth 4: It will solve all my supply chain problems While there are some rules which are selfexecuting, but it provides prescriptive insights for which a human brain must make a decision. We are better equipped to make an informed decision which may go either way.

IN SHORT

In today’s dynamic business environment where supply chains compete and not companies, Control Towers equip us with the insights needed to make an informed decision in real-time. The pandemic has accelerated some of the digital initiatives as companies are now managing a global supply chain remotely. Having said that, the cost of technology needs to come down further to make it affordable for small enterprises!!!

“If supply chain had an arch enemy, it would be called “Bad Communication.” ~EverythingSupplyChain.com