Published on Tuesday, 12 February 2013
A new term is appearing in the supply chain arena: "Supply Chain Control Tower". Just as an airport control tower coordinates airplanes landing and taking off, a Supply Chain Control Tower coordinates inbound and outbound distribution flows. Sure sounds more professional than a "dashboard".
It is all about "knowledge". Air controllers get information on weather, speed, direction, and altitude of aircraft and use that knowledge to keep their air space safe. Companies must know what is happening with their supply chains so they can prevent disasters too. They need to be able to do "what-if" analysis and work their way around events that will cause disruption and risks to the supply chain.
If you notice a typical airport control tower, you will see that it is multi-tier: a floor for the controllers, a floor for radar, a floor for the weather station. In a virtual sense, the Supply Chain Control Tower is multi-tier too: the manufacturer, many contract manufacturers (second tier suppliers), transportation, warehousing, customer service, procurement.
What goes on within the "virtual four walls" of the Supply Chain Control Tower? Demand forecasting, transportation planning and load optimization are only some of the tools available.
A Supply Chain Management system gathers information from all elements of the supply chain: ERP, CRM, Transportation, Warehousing, Procurement. With all this information, the Tower can predict the consequences of an issue. Will it affect customers service? Will more material be required? Will the delivery schedule be met?
The Supply Chain Control Tower co-ordinates and manages the flow of goods and information, from supplier to inbound logistics, manufacturing, outbound logistics to the end customer. It monitors the physical order flow by exception management to early on identify possible hang ups and letting the right people take action immediately to insure on time delivery. The Supply Chain Control Tower provides reports on exceptions and performance.
Being a multi-organization entity, the Supply Chain Control Tower must resolve issues in the best interests of all the members (all of whom have different objectives). Having information is great, but the success of the Supply Chain Control Tower is multi-enterprise collaboration.
The control tower concept is about bringing information to the right person at the right time. The biggest benefit will be to break down each silo,and be able to manage end to end.
The Tower is a strategic business initiative. First, define a vision that includes all the different stakeholders of the organization. It still involves local decisions, but with focus on the vision. If everything is coordinated, the day to day decisions will follow right along. The value of having enough information is that it will allow the best decisions to be made.
Supply chain visibility allows companies to manage a business both within the organization as well as across organizational boundaries (the extended enterprise). It helps the company gain a competitive advantage by having a superior supply chain.
Another similarity between the airport control tower and the Supply Chain Control Tower is that they rest on pillars (foundations). The "foundation" of the Supply Chain Control Tower is people, processes and technology. A Supply Chain Control Tower is a central hub built around technology, organization and processes to capture and use supply chain data to provide enhanced visibility for short and long term decision making that is aligned with the strategic vision.