Winning at supply chain management demands actionable insights, seamless data access, and understanding. A supply chain control tower equips organizations with incomparable visibility and preparedness to anticipate and manage abrupt supply chain disruptions effectively.
The global trade ecosystem has been experiencing significant supply chain challenges since the advent of the COVID-19 pandemic. 2020 was the year we witnessed the world stand still and economies being brought to their knees. Almost every industry, from automotive to consumer goods, witnessed business hit a new low because of nationwide lockdowns and stringent import/export restrictions.
Hospitals endured an acute shortage of medical equipment such as gloves, N95 masks, safety gear, oxygen tanks, etc. At the same time, supermarket aisles ran dry due to the absolute disruption of global supply chains. The mayhem resulted in businesses and consumers feeling the real pinch of scarcity. Who could have ever predicted that we would witness a time when toilet paper was a treasured commodity?
Manufacturing, an industry accounting for nearly $2.3 trillion in GDP and employing more than 12 million Americans, was severely impacted because of the global slowdown and sharp shortage of raw material imports. Consequently, businesses suffered tremendous losses resulting in mass unemployment and economic retardation.
Over the past two years, the world has endured much but slowly regained a sense of normalcy. International trade has gained momentum as global restrictions have been relaxed and supply chains revived. However, in the more unfortunate present, the Ukraine – Russia geopolitical issue has once again choked up trade routes, creating a vacuum and paralyzing global supply chains.
The immediate effect of this conflict has caused a stinging rise in commodity prices like fuel, grains, cotton, etc. Moreover, distressed supply channels have made evident the need for companies to secure alternative sources of labor and material to ensure demand is met.
The Need for an Efficient Supplier Network
Though these events have resulted in much chaos and disorder, they have also successfully highlighted the numerous vulnerabilities of global supply chains and the threats they are exposed to. Additionally, they have provided the stimulus and given room for some much-needed innovation and renovation in the global supply chain management domain.
Many firms find themselves at a confluence where inefficient supplier networks, rising costs, and shifting consumer loyalties affect profitability and encourage a drop in quality to maintain margins.
Past and current global events continue to encourage a sense of uncertainty when considering productivity, employment, and business outcomes from a supply chain point of view. Many corporations are turning to technology for the optimal solution as a countermeasure.
Even though organizations have employed supply chain management software extensively, a 2021 survey conducted by Ernst & Young revealed that 72% of all respondents reported adverse business outcomes due to the disruption of global trade brought on by the COVID-19 pandemic.
Furthermore, it indicated organizational unpreparedness due to the lack of supply chain visibility, actionable insights, predictive analytics, resilient systems, and vertically integrated management. Presently, global supply chain teams have their attention captivated by supply chain control towers.
What Is a Supply Chain Control Tower?
Like watchtowers, supply chain control towers deliver unmatched visibility across an organization’s network. Simply put, it is a centralized cloud-based solution that employs machine learning (ML), artificial intelligence (AI), the internet of things (IoTs), and other sophisticated technologies, while including people, processes, and data to optimize the supply chain.
These towers allow firms to see the unseen areas of their supply chain, improving outcomes and increasing preparedness to manage unforeseen risks and prevent severe challenges. Supply chain control towers are a robust solution that empowers organizations with agility and efficiency through data-driven insights.
Think of it as a lighthouse, guiding ships through turbulent weather and rough seas while protecting them from disaster.
Powered by data, these systems collect large sums of information from key business metrics of the supply chain and deliver a cohesive, panoramic view in real-time from supplier to consumer. As a result, businesses can make informed decisions with strategic objectives. This concept has been around for some time.
First-generation control towers were localized solutions with limited visibility, and insights into external suppliers and trading partners were inaccessible. Furthermore, it was ill-equipped to process real-time data, depriving organizations of the responsiveness and celerity needed to navigate abrupt supply chain disruptions. Because earlier adaptations were linear in approach and solitary in function, towers delivered just analysis rather than an informed solution that mitigated the issues.
Additionally, most control centers limited their visibility to direct channel partners. As supply chains got more complex and faster, it became increasingly challenging to coordinate efforts and find solutions across siloed systems and control towers.
With its unmatched processing power and capacity to consume and analyze massive volumes of data, cloud computing has changed the supply chain terrain for the better. Supply chain control towers of the present day offer clear insight and in-depth perspectives into all supply chain processes. They enable three key components of management control:
- Strategic
Towers offer command across the entire supply chain network’s architecture.
- Tactical
Towers bolster efficient distribution by enabling effective planning and operations defined by market demand.
- Operational
Towers have various real-time features, including asset tracking, logistics planning, and exception management.Today, supply chain control towers are prevalent and in high demand. According to a document published by Grandview Research, the control tower market will be worth $17.24 billion by 2027.
How Do Supply Chain Towers Work?
Data is the driving force behind everything that occurs in a control tower. Inputting relevant data is essential. Clean and comprehensive information often results in accurate analysis and actionable insights that drive factual and informed decision-making.
Automated data collection
Control towers provide real-time knowledge and insight by automatically gathering and integrating formatted and unorganized data from all key metrics in the supply chain, including codes, sensors, and devices.
Data visualization
Relevant and the latest feedback is presented through easy-to-use interfaces that deliver insights into key business activities, including product development, order processing, stock management, production, and more, by combining that information with intelligence.
Analysis
By leveraging the power of data, it delivers the ability to anticipate potential future events. As a result, supply chain operators can forecast and prioritize tasks because it moves swiftly.
Implementing AI & ML
The implantation of artificial intelligence automates specific components of the decision-making and correction process. Because the system is equipped with AI and machine learning tools, it perpetually learns, reacts, perceives, and improves without human intervention.
Supply chain control towers combine data and intelligence to deliver smart solutions that equip operators with the preparedness to address supply chain management complexities and create winning playbooks. These strategies become solution blueprints for supply chain teams when similar complications arise. As a result, the response and process are both standardized and streamlined.
Key Capabilities of a Supply Chain Tower
From enhanced automation to unrestricted visibility, control towers have a lot to offer. Some of the essential capabilities a control tower solution possesses are:
Unrestrained Intelligence
Companies should always have pertinent and up-to-date data available. With control towers, supply chain teams can access real-time information being captured and filtered continuously.
Predictive Insights
Organizations can leverage the power of advanced analytics to forecast disruptive scenarios. Predictive insights help develop prescriptive solutions, increase resilience, and create actionable plans to mitigate complications.
Real-time business intelligence gives companies an objective and uninterrupted view, from supplier to consumer, and helps comprehend upstream and downstream effects caused by critical events.
20/10 Vision
Visibility is the cornerstone capability that bolsters an organization’s control over its supply chains. By implementing supply chain control towers that connect data across compartmentalized operations, businesses may obtain end-to-end visibility across their supply chains. As a result, companies can access decisive and actionable information and anticipate future disruptions through dashboards. Think of it this way – in the land of the blind, the sighted rule.
Autonomous Learning and Implementation
AI and machine learning capabilities help companies automate certain decision-making processes by identifying the core issues without human intervention. As a result, operators can rely on an intelligent and resilient system that learns and improves with time.
Cloud-based Architecture
Because present-day supply chains are constantly exposed to a certain degree of risk, agility and flexibility cannot be compromised. Both requirements are met cost-effectively because of cloud-based operation.
Benefits of Supply Chain Control Towers
A top-tier control tower can assist firms in streamlining operations or supply chain management while boosting robustness and agility.
Reduced Costs
Optimized operations often promote favorable business outcomes, and the same can be said when all supply chain participants enjoy quick, uninterrupted access to information. Supply chain control towers expand the reach of operators and empower them to anticipate and manage exceptions to reduce losses in time and cost.
Cohesive Data Collection
Companies have a firm grasp on the evolving operational environment and the effects of external factors on the organization and supply chain by comparing information about external events with organizational data.
Because towers extend their reach to third-party information, much value is derived from a clear and more nuanced upstream and downstream view of the supply chain.
Increased automation
One of the fundamental advantages of the supply chain control tower is its capacity to automate some aspects of the decision-making process. These include the coalition and analysis of information, running scenarios, and performing necessary actions to improve efficiency.
The control tower, thus, is an optimal instrument because it can be employed without acting on the data that has been collected or by following preset plans or protocols that require human involvement to be carried out.
The control tower’s artificial intelligence and machine learning capabilities aid cost reduction and bolster improved financial outcomes. As a result, automated decision-making features are suspected to be the future of the industry.
Unparalleled visibility
Most companies realize that visibility in every aspect of the supply chain is of paramount importance. In the post-pandemic scenario, visibility remains the chief gap most operators need to bridge.
However, supply chain control towers help navigate obscure areas, which can be blind spots that result in huge losses. Control towers provide uninterrupted visibility over every key business metric and thus make real-time exception detection possible. Furthermore, the time required to resolve exceptions is significantly reduced.
Consequently, operational costs are reduced, and performance is enhanced throughout the supply chain.
Deep and actionable insights
Control towers can use AI and ML to provide insights, observations, detections, and notifications. These observations and insights can help operators save considerable time that would otherwise be used to source, collate, correlate, organize and analyze the data.
Furthermore, deep AI-powered control towers enable operators to conduct natural language interactions with the solution.
Productivity
Supply chain control towers help teams work smarter and achieve strategic goals by delivering predictive and prescriptive insights that encourage improved productivity. Moreover, the number of person-hours spent researching ineffective procedures is reduced thanks to constant adaptation and learning of more reasonable management practices.
Potential Challenges While Deploying a Supply Chain Control Tower
When deploying a control tower initiative, there are a few technologies and business-related challenges that you may encounter:
Technology identification
With various options available, deciding which technologies to use or integrate may become a cumbersome process that demands time and leads to analysis paralysis.
Data Ownership
Because a control tower extends its reach to third-party sources of data as well, the question of data ownership often crops up. Matters like viewing permissions, evaluation, etc., become a matter of concern.
Operators
Control tower operators must be skilled enough to manage applications.
Build or buy
Because designing, deploying, and maintaining a control tower requires expertise, many companies need help deciding if the towers should be in-house or outsourced.
Conclusion
Supply chain control towers can help your company forge a prosperous tomorrow with enhanced automated decision-making capability and end-to-end visibility. Supply chain control towers are evidence of the importance of data management and automation for the sustainability and growth of the whole supply chain sector.
It’s critical to remember that every business has unique goals and that not every control tower solution is created equal. Control towers symbolize a path toward greater visibility and understanding for every business. The right supply chain management software helps companies achieve more effective and efficient operations, paired with an increased reach, enhanced performance, and improved impact.