3 Types of Supply Chain Control Towers

Posted by Martin Verwijmeren on Aug 17, 2017 8:32:03 AM

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When in 1921, London's Croydon Airport introduced it’s first air traffic control tower, it did so to better manage an increasingly complex operation and ensure every pilot and passenger's safety on incoming and outgoing flights. The supply chain Control Tower has followed a similar trajectory, though what began as a simple visibility tool has advanced to encompass so much more. "Control Tower" has also become a buzzword. Though offered by many software providers, the term's meaning tends to vary depending on the source.

In this post, we’ll discuss the industry's growing complexity and how this change of pace is driving leaders to better optimize and measure their supply chains. We begin by exploring the different types of Control Towers in the market, and what you should look for based on your needs.

What should a supply chain Control Tower provide?

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, Control Towers should provide actionable, granular visibility and operational control across the entire supply chain, helping to optimize fulfillment lead times, reduce inventory costs, mitigate exceptions in real-time and increase the percent of orders delivered on-time, in-full (OTIF).

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

  • Real-Time Order Planning: To improve customer service levels, your Control Tower should be able to capture and leverage key data in real-time, such as the delivery time, inventory availability, and transportation costs. Doing so allows you to always select the best, most cost-effective order flow.

  • Exceptions Management: Your Control tower should also focus on consistently delivering OTIF orders by tracking supply chain milestones and sending alerts when issues arise. More importantly, your solution should allow you to take action directly within the app.

  • Granular Visibility: In addition to track and trace, your Control Tower would ideally provide granular visibility into the details of each order to effectively fulfill on every required element

Analytical Control Tower vs. Operational Control Tower

Before we get into the two main types of Control Towers, it's important to note that some technology vendors are also referring to their analytics solutions as "Control Towers." In contrast to the capabilities listed above, analytic systems consolidate and display data but don't allow users to act on what they see. While visibility and analytics are helpful for the planning stages, a Control Tower must empower you to act on this insight.

When choosing a solution, a good rule of thumb to remember is that most supply chain software will have an analytic component, but Control Towers should offer an operational function as well.

Below we'll break down the two types of operational supply chain Control Towers, which not only provide visibility and analytics, but also enable you to act on exceptions in real-time.

2 Main Types of Operational Control Towers

As we mentioned, operational Control Towers will alert you to problems or exceptions as they arise and also allow you to resolve the issue in real-time — and ideally within the application. However, solutions will vary in the degree to which their visibility and control spans the supply chain. As such, buyers should beware of the significant gaps in functionality among the Control Towers offered in the marketplace.

Typically, you’ll find two types of operational Control Towers as you talk to providers:

Transportation Focused: These Control Towers mainly offer insight into inbound and outbound shipments, with visibility into ASN, deliveries, track and trace, freight spend, on-time delivery, and other similar details. Because of their narrowed focus on transportation, they tend to be purchased as an add-on or included within a Transportation Management System (TMS). Their limited focus also means they are siloed from other supply chain processes, providing granular visibility into transportation but lacking end-to-end visibility and orchestration capabilities beyond shipping.

Supply Chain Focused: These Control Towers focus on the multi-enterprise supply chain, ensuring visibility and control across internal as well as external end-to-end processes and milestones. In addition to transportation, this can include sales and purchase orders, inventory across internal and external suppliers, manufacturing, and maintenance and repair. Because they offer true end-to-end supply chain visibility and in-app control across your entire supply chain network, they provide more comprehensive, real-time collaboration with suppliers and partners.

The chart below further highlights the differences in analytic and operational capabilities between transportation- and supply chain-focused Control Towers.

 

transportation-control-towers

 

What Type of Control Tower should you choose?

When researching Control Towers, the most significant difference will be their focus. If you're hoping to achieve end-to-end visibility and be able to effectively act on these insights to optimize your end-to-end supply chain, then you’ll be disappointed by a transportation- or analytics-focused solution. As supply chains become more multi-party driven and multi-mode, practitioners will need a Control Tower that serves the entire supply chain network.

 

Control Tower Buyer’s Toolkit

MPO offers the world’s only Control Tower for Orchestration on a single, unified platform. Businesses operating in a range of industries can leverage this powerful solution to optimize their complex, global supply chains and reach unprecedented levels of efficiency, customer service, and cost-savings. You can learn more about this powerful solution and how it might serve your business by exploring our Control Tower Buyer’s Toolkit.

 

 

Topics: Supply Chain Visibility, Supply Chain Execution, Control Tower, Supply Chain Analytics, Inventory Management

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