A supply chain control tower is a central hub with the required 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 strategic objectives
Control Towers are cross-divisional organisations with system integrated information hubs that provide Logistics & supply chain visibility. This is used for gathering and distributing information, and allow people trained to use these visibility capabilities to detect and act on risks or opportunities more quickly.
In the Aberdeen report, Supply Chain Control Towers: Concept and Impact, Bryan Ball defines the supply chain issues driving the need and interest in Operations Control Towers really well though, and in the process describes some of the key characteristics:
- What if we could remove all of the information delay in Logistics & supply chains and operate in real time when it comes to problem solving? …
- Responses to “what-if” questions could be determined in minutes rather than hours and days.
- … the “Holy Grail” of supply chain leaders has always been to remove as much latency as possible in every aspect of the supply chain … latency results in inventory buffers …
The term “Control Tower” is … an end-to-end holistic view of the Logistics & supply chain and near real-time information and decision making.
The key difference between a simple alerting system and a Control Tower. The visibility provided by the end-to-end broad view of the Logistics & supply chain is a necessary precursor to a Control Tower, but, without the ability to determine how to act (decision making) on the information provided, you do not have a Control Tower.
While nice in concept, the question is if removing latency has been the “Holy Grail” for some time, why is there now an interest in Control Towers? The answer lies in the business needs.
Pressure to grow while Managing cost & Complexity.
- Need to improve top line revenue
- Growing complexity of global operations
- Escalating demand for service from customers
- Diminishing control over Logistics & Supply chain operating costs
One of the primary purposes of Control Tower is to reduce delay and yet Logistics and supply chain complexity is only growing because of globalization and outsourcing. Knowing who needs to know about an effect, not the event itself, is critically important. Armed with both the ability to determine the downstream and upstream effects or impacts and whether they exceed acceptable control tolerance very quickly, and the ability to determine who needs to know very quickly.
What are the operations / tasks that can be handled in Logistics Control Tower:
A logistics control tower is capable of providing the following services:
- Sourcing carriers
- Negotiating rates
- Routing shipments via TMS
- Managing contract rates and lanes
- Requesting spot quotes if contract lanes are unavailable
- Troubleshooting critical and delayed shipments
- Track and trace of all shipments
- Delivery confirmation
- Freight claims management
- Freight invoice audit
- Data capture, analysis, and metrics
While some companies will want all of the above services to be included, others will want to pick and choose specific tasks to be handled by the control tower.
Undoubtedly knowing something sooner is important. Knowing quickly that this something will have significant upstream or downstream effects is even better, and quickly telling someone that needs to know is significant.