What If Your Supply Chain Had A Control Tower?
Do you know how many planes take off or land each year in the world’s busiest airport? A little under 900,000. That’s at Atlanta, by the way. There are high stakes in getting it right: starting with over 100,000,000 passengers. Hat’s off to the airport’s control tower. Any Logistics Manager or 3PL manager has gotta be impressed. Wouldn’t you want that same sort of control over your supply chain?
Well, a fairly new business concept named after the control tower, is based on delivering just that.
The following article was contributed by Batool Iqbal, from Damco Pakistan – a subsidiary of Ap-Moller Maersk Group. She is an avid reader and supply chain lead, specializing in the area of end-end supply chain and control tower.
Supply chains are becoming more complex and more exposed to competition. In a more volatile global business environment, supply chain managers simply need to optimize efficiency. But you can’t optimize what you can’t see. Which means they need end to end visibility and control of supply chain flows. Their customers, too are demanding far greater visibility and control.
Large operations – airports, armies and even mall security – all rely on one control room that aggregates data, converts it into insights and aids decisions. The idea of a supply chain control tower emerged in 1990’s, triggered by the need to view and control the movement of goods in factories, distribution centers and pipeline inventories. As the concept developed, it extended beyond managing inbound and outbound flows. It quickly became a way to gain end to end supply chain visibility and mitigate risk.
For years, this was limited to costly software on specific terminals, providing an end-to-end view from only one vantage point. Cloud-based software released it from the tethers of terminals, unleashing big data’s potential and feasibility.
What are the key features of the supply chain control tower?
- Real time information
- End to end data transparency
- High flexibility and control
- Integration into a single platform
- Dynamic decision making support, facilitating a proactive approach
- Resilient to supply chain disruption
The most significant role of a control tower is to provide a live view into the vitality of the complete chain, across many functions – manufacturing, inventory, demand planning, logistics, customs clearance, etc. – coordinating all partners, and satisfying customers.
The heart of a control tower is an information hub, supported by technologies, trained teams and processes. Its mission is to gather and integrate data from various sources and orchestrate it in such a way that it enhances supply chain visibility and efficiency.
What are the actual benefits of a control tower?
Control towers deploy advanced system logic to improve performance. They do this by, for instance, making routing decisions based on lowest cost or shortest time, and by identifying bottlenecks within the supply chain.
Outcomes include increased responsiveness, shorter lead times, reduced transportation costs, and increased flexibility in supply chain operations. Another output is improved scenario planning, for optimizing normal operations and for contingency planning (including disaster recovery).
What does it look like in action?
Giant retailers source from all over the world, and are typically designing and building robust, resilient solutions that control supply chain flows, and deal with disruptions, in real time. Recently, SRS (an umbrella group for twenty European retailer groups, selected GT Nexus to deploy a global transportation control tower. Sean Feeney, CEO of GT Nexus:
“The ability for SRS to maintain a single dashboard to manage transportation sourcing for all of its brands and businesses, each with different needs and service level requirements, becomes a huge advantage”.
Samsung provides a case study of control towers in action. The South Korean multinational conglomerate had outsourced warehouse and distribution activities to several logistics service providers. With dispersed activities and workflows, their supply chain had become pretty complex. By deploying a control tower solution, they’re back to seeing what’s going on, and tactically stepping in if necessary.
Proctor & Gamble has also got into the game. They estimate that their deployment resulted in an inventory saving of tens of millions of dollars.
Closer to home, Paolo Tonon, the new head of Maersk Maritime Technology extols the benefits of their Tripe-E fleet’s big data:
“Every day Maersk downloads two gigabytes of data from each ship, which is equipped with about 2,000 sensors and 450 kilometers of cables … to obtain a new understanding and predict the vessel’s functionality as well as avoid poor handling of systems”.
Control towers and logistics
According to the 2016 3rd Party Logistics Study, 3PL customers are outsourcing more of their logistics services. And although the IT gap (the gap between shipper’s opinion on what they need and what they get from their provider’s IT capability) is closing, that gap is still significant.
The sad fact is that most companies’ logistics function are still struggling with legacy systems, to the detriment of their customers, and ultimately to their industry.
Those in-house supply chain managers and 3PLs with an eye to the future, are searching for advanced solutions that will strategically place them for growth. They should look no further than the control tower model as the best approach to take their supply chain management to the next level.
If you want to learn more about the supply chain control tower, Batool recommends starting with capgemini’s white paper.