There is much hype about Supply Chain Control Tower in the ISV software provider community as all the big guns race to build their version of the holy grail. As we see it, not all control towers are designed or created equal. There is a wide range of how software providers understand the idea and their ability to deliver software in the mid term. Sure, it's a big idea that finally has legs. The unprecedented levels of volatility demands a fundamentally more dynamic planning & response management paradigm that is network wide, not within the enterprise four walls. Making course corrections in real time with plans & assets that are in-flight indeed has great potential to cut waste and boost profitability. However, this requires network wide visibility & alignment as well as tightly coupled planning and execution across the entire network - which is a big ask.
Supply Chain Control Tower must provide a social collaboration platform across the full set of trading partners to execute short term responsive demand sensing and supply rebalancing processes to satisfy the end consumer with minimal inventory buffer. This is where next gen supply chain in the Cloud comes in. Latency is built-in by design in the legacy on-premise four wall solutions that need overnight B2B integration and network analytics to all players, and latency gets in the way of effective collaboration and efficient response management. In this age of extreme volatility in customer tastes and demand, old or incomplete information is as bad as incorrect information. Also, visibility to disruptions is only useful if you have time left to engineer a response and recover from it without irreversible value leakage.
Here are the three key dimensions of a comprehensive Supply Chain Control Tower offering:
1) Omniscient: It must see everything that matters and provide real-time visibility into demand and supply volatility across the entire network to all that matter
2) Predictive: It should sense problems before they occur based on advanced trend recognition, demand sensing, and predictive capabilities
3) Responsive: It should combine automated resolution recommendations based on machine learning with robust simulation & human collaboration capabilities with link to execution systems to take decisive action in the moment or in best case, before the problem has a chance to occur.
Most software providers are busy answering the first attribute: Omniscience: the ability to see everything globally real-time. While this level of network visibility is a prerequisite to value, it's not a new idea, definitely not an end in itself. Supply Chain Control Tower is not merely Supply Chain Visibility on Steroids, it's an intelligent, all-sensing, and profitable response orchestration platform as well. To be impactful, the Control Tower application needs to be uber flexible so the same information can be seen and analyzed differently by different network players simultaneously, while retaining the single source of truth element of the unified data model, it's essentially integrated network wide planning & response management. As you can appreciate, it's a big task to bring the execution integration, predictive smarts, and social collaboration needed across the network to get the full value from the idea that is Supply Chain Control Tower.
Omniscience demands pervasive connectivity. This is where connected sensors and M2M can take the visibility game to the next level. Combine this with a next generation supply chain platform in the cloud that all network players can call their own and you see a pattern emerge. Cloud connectivity is the next generation of B2B integration. It's the foundation of true real-time multi-tier visibility. Next gen supply chain solutions in the Cloud provide enterprises with better IT economics and faster time to value in their search of this real-time information powerhouse that pervades across the entire network. With the network visibility, collaboration, and response orchestration focus, Cloud solutions enable new information models, not just better IT economics to facilitate B2B integration.
Think how LinkedIn facilitated an entirely new information management model as opposed to local contact management in everyone's Outlook. Now a promotion or a job change update reaches everyone in your network instantly, as a single version if the truth, as opposed to all your contacts having to maintain that change in their local contact management systems which implies latency and disconnects. Supply chain cloud solutions apply the same idea to enterprise networks, that can benefit from the simplicity of one update reaches all concerned instantly. Cloud supply chains replicate each demand or supply object just once in the cloud information model and make it visible to the entire network. Any change in status or details of the object can now be made available real-time to understand disruption impact holistically and engineer a global optimal response in the moment. However, this requires much more than a technology platform no matter how well the ISVs hype the control tower concept. To get value from your control tower, you need the following:
1) a minimum level of network density and trading partner commitment to provide real-time data
2) an active community that collaborates proactively and reacts faster optimally
3) and most importantly, a commitment from all players to provide clean data and quick execution of changed plans.
Bad data published instantly across the network is not great at all, you merely spread the turbulence throughout the airspace with resulting false alarms or effort wasted in manual reconciliation. Business value leakage can also occur with network buy-in issues in cases of sub-optimal collaboration, or lack of network governance that ensures win-win responses for the whole community. The Brand owners have to figure out how to bring the community to the platform and get past the trust issues to sustain true platform adoption.
Response time to rebalance network in the face of a disruption can be the differentiator between a successful product launch and a failed product these days. At its best, Supply Chain Control Tower is the first step to an enterprise version of time machine. It slows time down, lets you see potential exceptions coming round the corner, and gives you tools to deal with real and potential exceptions while there is still time to pivot and capture the fickle demand upside. This translates to visibility into how short-term demand is behaving vs demand forecast, demand trends globally - which markets are seeing an upside and where you have excess inventory. It also means visibility into parts inventory, work-in-progress, in-transit movements, and demand-supply balance by market and time period. With all the visibility and response recommendation capabilities, you now have the tools to divert inventory and shipments in real-time, to better align your limited inventory with volatile demand. This simply cannot be done with traditional silo planning systems within and across enterprises that introduce latency with current B2B integration paradigms and hurt the competitiveness of one network vs. the other. You can at times pay for lost time with expedited freight and sub-optimal inventory levels, but that erodes thin operating margins. It also runs the risk of misaligning inventory vs. consumer demand spectacularly in some market and missing out on revenue, be stuck with excess inventory in another region, and getting negative consumer sentiment where you have stock-outs. The omni-channel consumer is unforgiving and will quickly move to your competitor's products as brand loyalty is not what it used to be.
Supply Chain Control Tower is not just another software product to slap on top of your supply chain planning and ERP solutions to get better four-wall visibility into exceptions. Business software designed to manage supply chain for a single enterprise cannot scale the network efficiency challenge with an additional supply chain visibility module on top of local ERP. Essentially, with Supply Chain Control Tower, you have the tools to orchestrate an optimal response in hours, which would have otherwise taken days. This ability to pay time back to a stressed omni-channel supply chain will be a huge competitive differentiator going forward. With a single object to update across the network for demand / supply elements, latencies and data inaccuracies are minimized, manual processes to reconcile using spreadsheets are eliminated, and execution missteps are avoided.
Supply Chain Control Tower concept cannot live up to the hype unless this network wide cloud connectivity for demand & supply is in place. On top of real-time information sharing, you need predictive capabilities to sense unhealthy trends and forecast problems before the moment. You also need smart software that learns continuously from planner responses to disruptions and can automate solution recommendation to maximize responsiveness. Supply Chain Control Towers need to enable sensor / M2M based sensing capabilities, simulations & predictive analytics, and response & process management capabilities to complete the plan-execute-sense-respond circle profitably and timely every time. This is what it takes to enable the inter-connected, highly intelligent, and agile business networks of the future the serves the demanding omni-channel end consumer profitably and predictably.
Done correctly, Supply Chain Control Towers and next gen loud supply chain solutions will cut out a lot of waste and take the network performance to the next level. Providers are all over the map with their completeness of vision and ability to execute. At GitaCloud, we see Control Tower as a game changer, but take you beyond the hype, and help you understand the true potential as well as roadblocks to the value proposition. We deal with facts, not hype. We are passionate about next gen supply chain planning & execution solutions in the Cloud that enable profitable, timely, and repeatable performance needed to counter volatility and cost pressures supply chains face today and going forward.