The hype around Artificial Intelligence is far from fizzling out anytime soon. Digitalization and big data have completely penetrated the supply chain industry and,often, are ubiquitous in nature. This the article discusses one of the more interesting trends in the current supply chain analytics space – The Control Tower
The concept of Air Control Towers and the Evolution of Digital Control Towers in Supply Chain
One may wonder if supply chain control towers have any correlation with air traffic controllers? To be honest, yes, there is!
An air traffic control tower (ATC), is a service provided by on-ground staff (controllers), who direct aircraft on the ground and through controlled airspace; they can provide advisory services to aircraft in non-controlled airspace. The primary purpose of ATC worldwide is to prevent collisions, organize and expedite the flow of air traffic, and provide information and other support for pilots (wiki). In short, the tower helps Improve flow, reduce emergency like situations through tactical interventions and provide inputs for the right decision making.
The digital control towers aim` at keeping a bird’s eye view on the events occurring within the supply chain ecosystem (controlled and uncontrolled space), with the modus operandi being very similar to a generic air traffic controller. With the help of this consolidated view generated by the digital control towers in the supply chain, one can gain powerful insights about the current happenings within the organization. These insights help in improving flow across the organization, reducing urgencies and providing insights and tactical support to supply chain managers to make effective decisions.
Significance of Digital Control Towers in Supply Chain
Most corporations, today, want to leverage the useful applications of the supply chain control tower. Organizationshavecopiousamounts of data across their supply chain and related functions. Over the past few years, they have managed to build business intelligence and analytics solutions to drive decision-making but at a node level. Extracting valuable insights using the right sets of data, lying across various nodes in an organization while also utilizing market intelligence, to deliver real-time visibility and provide meaningful insights that can drive decisions that are optimal cross organization is the need of the hour. For e.g. with expected slow-down in sales on specific SKUs, does my manufacturing plant need to continue producing to plan OR does it make sense to course correct and lose capacity?
The most organizations today accept the impact a control tower can have on their organization. For a global organization, it is probably the one platform that will steer the supply chains of the future. Many organizations have tried implementing a control tower, but there have been very few examples of success. Often, organization fall short of implementing a “gold-standard” control tower capable of – real-time visibility, predictive alerting, identifying bottle-necks to supply chains and providing insights that can drive decision; instead, they end up implementing a large set of dashboards, that showcase different KPIs important to the various nodes in a supply chain.
This is due to the challenges faced when implementing an initiative as large as a control tower.
How does a Digital Supply Chain Tower work?
The SCCT should help an organization in making 3 key decisions – a) Ensure smooth flow-paths across the supply chain b) Ability to identify or predict bottle-necks / constraints to flow c) Derive efficiency/utilization improvement opportunities in the current network.
Hence, some of the key functionalities that are required would be:
– End to end data connectivity: Ability to go beyond creating reports and tools that are not unidimensional but are able to work with data from different nodes in a supply chain is important.
– Visibility: SCCT should provide visibility of key supply chain KPIs (simple and complex KPIs). They should showcase the right metrics, while also be able to project the impact of a decision on the metric real-time.
– Analytics: Supply chain control towers are equipped with and boast of analytical tools and applications. With the help of these tools, supply chain managers can easily run what-ifs and make calculated decisions. They can easily harness the power of predictive analysis to detect ‘tripping points’, identify triggering alerts, as well as to conduct root cause analysis of the data to arrive at solutions and address challenges.
– Execution: The real benefit of the SCCT lies in the way the control tower communicates with the executive and the operational teams across the supply chain and allied functions. Hence, this an important aspect of SCCT adoption within an organization.
Key Challenges to Implementing a Supply Chain Control Tower
The supply chain control tower, unlike a typical analytics project entails involvement from multiple functions across the supply chain. In a large organization, this may mean, multiple VPs/SVPs in supply-chain and across geographies.
What this may mean is implementing SCCT would mean working with team having – a) Different priorities b) Very different Data maturity and data quality c) Different products and soft-wares (some archaic and some new-age). Some of the challenges that come up during building and executing an SCCT typically are/ Some of the key challenges that appear during the construction and execution of SCCTs include –
a. When the SCCT implementation is started off as a priority exercise by a single function within Supply chain with out getting the other key function buy-in early into the transformation, there is a high chance the implementation will hit multiple roadblocks
b. A lot of time people tend to implement the most complex piece OR the piece of SCCT that seems most interesting. This may lead to no tangible results for an extended period thus leading to a lack of enthusiasm from fringe teams
c. Data maturity: Different functions may have different levels of data maturity (availability, quality etc.); inability to assess and map this aspect will tend to escalate timelines and cost
d. Sometimes the implementing partner makes the mistake of selling the SCCT, not as a strategic tool that can transform business functioning, but rather as another software that will bring inefficiencies. This will lead to the wasted effort that implementation will get driven in completely wrong direction
e. There are a number of proven analytics tools and products that exist with the client. Integrating these existing tools/products in the SCCT roadmap may cause issues during implementation, but will help adoption
A typical issue of not successfully overcoming these challenges is that companies go down the path of SCCT implementation (visibility, predictive analytics, decision tools, etc.) but end up implementing an end-to-end KPI dashboard. Though the dashboard may still bring in benefits, it causes disillusionment amongst the client project team in terms of SCCT capabilities.
Some of the ways to mitigate these challenges and move towards a successful implementation include – a) Treat SCCT implementation as a strategic initiative and not an IT implementation; hence it is critical to have someone high in the business team (CSO level) bless the initiative b) When prioritizing sprints, give equal weights to simple but quick wins – this motivates the client’s project team c) Always assess the current tools and products in the client environment; prioritize integration over innovation d) Continuous engagement with all functions (even if there is nothing happening in a specific function) is important
An Example of our Supply Chain Control Tower Implementation –
The client is a global retail major and currently uses siloed systems to track supply chain KPIs and performance. The client wanted to ensure high visibility of status and performance metrics at each a node within their supply chain network as a part of Phase 1 of implementation. As a part of Phase 2, the client wants to incorporate predictive tools, root-causing, and scenario planning as a part of the Supply Chain control tower
Tredence helped build phase 1 of the control tower, we helped improve visibility and efficiencies at each node using interactive dashboards with holistic views, updated with live data for better planning and informed decision-making for the client.