The advancement of digital technology enables the real-time, intelligent management of the Supply Chain. This now means you need a Control Tower.
But any company’s Supply Chain can still involve tens of thousands of skus, thousands of bills of material, thousands of suppliers, hundreds of transportation vendors, dozens of manufacturing facilities and distribution centres, and numerous customers.
So even if you have a Digital Supply Chain how do you manage this complexity? The answer is that you need a Control Tower!
The foundation of the Digital Supply Chain is the true end-to-end connectivity of your entire Supply Chain network and assets. This electronic connectivity thus allows for the application of intelligent software and technology that is the backbone of any Control Tower solution.
But Control Tower effectiveness is more than just having software and a room with a bunch of monitors. If that’s all you have then your Control Tower is just smoke and mirrors..
Many years ago a company had decided that it was going to develop a Control Tower service offering. The value proposition seemed to make sense. Every customer was wrestling with increasingly complex Supply Chains. Digital Technology was advancing enabling the electronic connectivity of the Supply Chain. And Customers would be knocking on our door if we had this service capability. If we built it they would come!
With a deck of Powerpoint slides craftily created and presented funding was provided to start developing the Control Tower service offering. Within a few months we were invited to see the Control Tower.
A huge meeting room had been emptied and converted into the Control Tower operations centre. There were a couple of couches, some lounge chairs, some tables with monitors on them, and motivational pictures on the wall. We then heard about all of the great things that the Control Tower promise was going to provide. Basically it was a rehash of the original Powerpoint presentation but in a different room.
Weeks, months and quarters went by. The Supply Chain Control Tower proposition never really got off of the ground beyond having that nice presentation and a room with a bunch of chairs and couches. Soon the concept died and those involved moved on.
So what went wrong?
1. Inability to Turn a Vision into Reality
As is often the case people can have great ideas and brainstorm all day long about wild and outrageous things. But when all is said and done you have to be able to implement and execute on that vision.
The reality was that those involved had no idea on how to actually create and implement a Control Tower. It is more than a fancy meeting room. That is a minor aspect of what you need to have in place. You can have all the Marketing capability in the world but if you can’t back it up you are dead in the water.
2. Connectivity must be real
For a Control Tower to work you must really have electronically connected all (or most) nodes in your Supply Chain network. Your transactions between you and other parties must be electronic. And you must really have electronic tracking of inbound goods, goods in process, and outbound goods.
Connectivity is the backbone of any Control Tower. In this case study there was absolutely no focus on connectivity. Even if the Control Tower software and architecture was in place it wouldn’t have worked because the Supply Chain was not linked so as to provide the system with the real-time data it needed to function.
3. Data Transparency was non-existent
No background work had been done with internal operations, let alone external suppliers and carriers, to ensure that they would provide access to the data needed to feed the Control Tower.
Getting access to data in someone else’s operation can be a daunting prospect as you have to establish trust and transparency. Doing this with a handful of suppliers and carriers can be challenging. Doing it with hundreds of suppliers is a huge task. But not doing it at all, as in our case study, is a recipe for failure.
4. Business Process Transformation is Essential
At the heart of a Control Tower is the centralization of decision-making. Further this decision-making can now happen more rapidly than ever before. But there are many different business processes and organizations which have governed that decision-making previously.
Because it now centralizes this capability all of these business processes, roles, responsibilities and authority must all be addressed and ratified. Not only that, the increased speed of decision-making has real implications for risk management, cash flow and resource management.
This must be addressed before a system is implemented. Change Leadership must be a critical element to ensure a successful transition.
In our case study this was not done. Organizations became defensive and distrustful of the prospect of losing control. And Customers were completely determined that they would not relinquish control. Selling a Control Tower concept must include a plan to address business process and decision-making issues.
5. Focus on Skills Development
There are very different skills required to operate a Control Tower. Operators must have the ability to assimilate and react to a lot of information very quickly and take action. Their decisions can have immediate and often irreversible impacts, both positively and negatively. There is a depth of skill and experience required in managing the end to end Supply Chain of any organization.
If you don’t have those skills or expertise than you will understandably struggle in such a role. And mistakes can be very costly. There is quite a difference from manually placing a small number of paper purchase orders to automatically changing hundreds or thousands of purchase orders.
People deserve the requisite training to doing these jobs. Given the amount of real-time decision-making capability that you are putting into the Control Tower it merits spending time on training.
Control Tower Conclusion
A Control Tower is a tremendous capability that every organization should consider as an essential element of a Digital Supply Chain. Whether you choose to create a Control Tower yourself or you choose to outsource this you must ensure that there is real capability and not just smoke and mirrors.
A Control Tower is more than just a room full of monitors with lots of data and graphs flashing across their screens. None of this will work without getting the basics in place.
True connectivity of all parts of your Supply Chain, Organizational will and Change leadership are essential elements necessary for a successful solution.
Be sure that your organization is committed upfront to spending the time, money and resource to properly implement a comprehensive strategy!