3 Types of Supply Chain Control Towers

Posted by Chris Brablc on Aug 17, 2017 8:32:03 AM

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When in 1921, Croydon Airport in London introduced it’s first Air Traffic Control Tower it did so to better manage what had become an increasingly complex operation to ensure the safety and lives of all pilots and passengers on incoming and outgoing flights. While it started as pure visual observation over time we’ve seen every airport leverage technology based observation in addition to visual in order to measure and ensure our flights arrive on time and in full.

Sound familiar?

A supply chain control tower is an agile cloud platform that focuses on providing end-to-end supply chain visibility and control. By integrating and extending existing ERP, WMS and TMS systems with suppliers, manufacturers, 3PLs, and other partners, supply chain control towers are able to provide actionable granular visibility and operational control across your entire supply chain, helping to optimize fulfillment lead times, reduce inventory costs, mitigate exceptions in real-time and increase % of on-time in-full (OTIF) orders.

The definition above while accurate leaves a little bit to be desired in terms of selection of control towers. Control tower has become a buzzword for software providers and the term means much different things depending on the source.

In this post, we’ll talk about how in today’s world of increasing supply chain complexity and pace of change, supply chain leaders are looking for answers to better optimize and measure their supply chains. Therefore, we will look to define the different types of control towers that exist today and what you should be looking for depending on your needs.

What does a Supply Chain Control Tower provide?

At a basic level, you’ll find that a Control Tower will serve the following functions:

  • Real-time Order Planning: A control tower will automate the selection of the best order flow to satisfy customer service levels. Depending on the purview (as discussed below), it will leverage key data captured such as location, delivery time, order mix, inventory availability, transportation costs, activity costs, and capacity to make the best decisions in real-time.
  • Exceptions Management: A control tower is also focused on ensuring on-time, in-full (OTIF) orders. That means measuring milestones across the supply chain and alerting when certain orders fall behind expected timelines.
  • Granular Complete Visibility: A control tower will also provide analytics and visibility into the granular steps needed to fulfill customer orders for real-time and long-term supply chain planning. This is different from track and trace in that it is deeper and it is actionable.

While there are many other capabilities inherent in control towers these are the main ones you’ll find in most control towers.

Analytical Control Tower vs. Operational Control Tower

Before we get into the different types of control towers, I did want to touch upon one area that we’ve seen evolving with technology vendors, which is calling their analytics solution a control tower. These systems typically are leveraged for traditional long-term planning and are focused more on data consolidation and display vs. execution of supply chain functions. A good rule of thumb is that all supply chain software solutions have an analytics solution but not all have a true operational control tower.

A true operational control tower marries not just the visibility and analytics into the supply chain but also enables you to do something about it in real-time. Visibility without the ability to take action can still provide value but it is not what many are looking for in a control tower.

So when I make reference to three control tower types, I include analytics control tower and the two operational control tower types below.

2 Main Types of Operational Control Towers

You’ll notice the two control tower types below not only provide visibility in the supply chain but enable you to take immediate action on this visibility from an operations perspective. This ensures that you not only know when problems or exceptions arise but now you can actually resolve the issue vs. looking back and wishing you solved it.

When we think about our supply chain strategies we can typically break it down simplistically into four main functions: sale or purchase order, manufacturing, distribution and transportation.

I mention this because as control towers have evolved, the more they have looked to provide visibility and control over all of these functions. This has also created the most significant gaps in functionality among the control towers that are offered in the marketplace.

Typically, you’ll find these two operational control towers as you talk to providers:

  • Transportation focused: These control towers focus mostly on the outbound and inbound transportation across shipments, ASN, deliveries, track and trace, freight spend, on-time delivery, etc. Typically purchased as an offering included within a TMS technology, they are often siloed from other supply chain processes providing granular visibility into transportation but lacking end-to-end visibility into pre- or post- transportation steps, or proving orchestration beyond transport carriers
  • Supply Chain focused: Supply chain focused control towers focus on the multi-enterprise supply chain ensuring visibility and control across internal as well as external supply chain processes and milestones. This may include transportation, sales and purchase orders, inventory across internal and external suppliers, manufacturing, maintenance & repair, order consolidation and splitting, etc. These control towers are focused on end-to-end supply chain visibility and control across your entire supply chain network that includes real-time collaboration with suppliers and partners.

To further highlight the differences, see the chart below that details the analytics and operational capabilities typically found for transportation and supply chain control towers.

Screen Shot 2017-08-17 at 8.19.15 AM

What Type of Control Tower should you choose?

When researching control towers the biggest difference is the purview where they are focused. If you are looking for this technology to help you optimize and execute on your end-to-end supply chain visibility, then you’ll likely be disappointed if it is just transportation or analytics focused. Our supply chains are becoming much more multi-enterprise, multi-partied and multi-mode and that means that we need tools that focus on the entirety of our supply chain networks so that we can ensure each and every customer order can be fulfilled optimally through both the internal and external investments we have made in our supply chain.

Join us for our upcoming webinar on Supply Chain Control Towers and how they have evolved with the increasing pace of change in today's digital age:

Supply Chain Control Tower

 

Topics: supply chain visibility, supply chain execution, inventory control, supply chain control tower, exceptions management, supply chain analytics, TMS, real-time planning

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