Industry TalkRegular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.
How to Drive the Greatest Impact With a Supply Chain Control Tower
As businesses across the globe grapple with protracted supply chain issues, one potential answer companies have been turning towards is control tower solutions. Pandemic-related restrictions, rising costs of services and goods, material shortages, and world events are putting extreme pressure on manufacturers, distributors, and suppliers. As executives aim to supply customers with what they want, when they want it—while also cutting on ballooning costs—it’s become clear that end-to-end visibility is necessary to balance various stakeholder demands.
Control towers have been traditionally seen as transportation-focused data dashboards. However, these control towers are relatively siloed from other integral aspects of the supply chain. Today, the supply chain control tower can span the full order lifecycle, providing proactive, end-to-end insights alongside dynamic execution functionalities. By pulling data from all corners of the supply chain—from suppliers and manufacturers to warehousing and carriers across all modes and geographies—digital control towers can empower executives to leverage data and make smart planning and execution decisions, virtually in real time. But what exactly can the supply chains benefits and impact be for executives who implement control tower capabilities?
What could the actual impact on your supply chain be if implementing control tower capabilities?
Serve Customers Better
Because supply chains consist of multiple people, systems, and processes, it’s no surprise that visibility was reported to be the greatest challenge global supply chain executives faced even before the pandemic. Supply chain control tower software essentially centralizes all data and visibility to extend a business’ view of its operations for supply chain planning and execution purposes – and it does so across the business network. This ranges anywhere from:
- High-level visibility
- Inventory allocation
- Order visibility
- Granular, service-level visibility into each order’s activities and movements
- Final mile and delivery to the customer.
As a multi-enterprise business network technology, such holistic, in-depth visibility across the ecosystem truly eliminates silos by creating one single source of truth. Customer service teams have their finger on the pulse for all customer orders at all times, enabling a proactive approach to any issues. Upstream teams across the value chain can easily collaborate off of a single-view platform, preventing inefficiencies and costly errors.
As disruptions and uncertainty continue to plague supply chains, organizations are finding creative solutions to build resilience and revenue in the long-term. End-to-end visibility is a good start, but visibility is only as good as what you can do with it. Once alerted to an issue, multiple teams must also be able to act and adapt fast within the application. Embedded intelligence presents users with smart and immediate resolutions to re-optimize flows. Moreover, the ultimate goal is to sense and respond preemptively to disruption; control tower platforms can also leverage AI, Machine Learning, IoT connectivity Internet of Things to anticipate problems and enable contingency plans.
Issues of resiliency are affecting all areas of the supply chain – including inventory and costs. Because supply chain control towers provide holistic visibility and control across the end-to-end network, businesses can get a full picture and better understand how to balance demand with supply to then enable assurance of supply. Full systems integration across ERPs, WMSs, and finance systems, for instance, provides companies with a full cost-to-serve picture, allowing them to bring down (hidden) costs.
Make Smart Use of Limited Supply
In today’s competitive and disruptive climate, reliability is a significant differentiator. A supply chain control tower that minimizes silos and blind spots helps organizations mitigate risk and deliver on time and in full more consistently to drive customer loyalty, which research shows can directly affect your bottom line.
Blind spots commonly occur between operational order planning and execution. Holistic control tower capabilities dissolve those silos with strategic control and visibility over the order planning stage as well as execution. This allows businesses to be capable to promise, optimizing their order allocation in addition to execution functionalities that allow for consistent on-time, in-full (OTIF) deliveries.
With an end-to-end supply chain control tower, organizations can also implement multi-tier inventory management with critical functionalities for stock forecasting and in-depth inventory updates across multiple tiers. These and other capabilities provide benefits to suppliers such as bringing down duplicate orders and reducing inventory liability, which directly translates to improved order fulfillment and demand matching.
Optimize Use of Resources
Supply chains networks have been growing, becoming increasingly diverse global. While supplier and carrier diversification are paramount to building resilience and broadening sales channels offers incredible opportunities for business growth, evolving ecosystems also come with multiple challenges. Partnering with large networks means trying to orchestrate across any disparate people, systems, and processes. It means more blind spots, inefficiencies, and optimization within rather than across silos.
To optimize fulfillment, businesses need flexibility in choosing the best parties to partner with for each and every order to balance service levels and cost. That can’t be done through static modeling and fixed business rules. Digital control towers that combine orders, inventory, logistics, and transport use smart business rules to ensure teams always make the optimal use of their partnerships and resources. That is, always allocate orders from the best possible warehouse or distribution center and always choose the best carriers and routes to deliver the best possible service at the best possible cost.
Promote cost savings and efficiency gains across operations
When implementing supply chain control towers, stakeholders expect to gain cost efficiency.
While ROI results depend on the digital maturity and complexity of each company, the larger the organization and more complex their operations, the greater ROI they stand to achieve by implementing end-to-end supply chain control tower technology. In fact, companies can expect to see significant cost savings from centralizing and automating alone.
Supply chain control tower platforms can also provide cost savings by capturing service costs at each step as a product moves through the supply chain. For example, an international order may have 7 or 8 steps to reach its final destination, so associating costs and gaining insight and control over each of these is a critical function only holistic control towers provide. On average, organizations can save between 6-11% of total logistics costs by automating this process.
Achieve sustainability goals
While almost all businesses understand the risk climate change poses for the globe, and are committed to making improvements, there are several barriers limiting real change. These include lack of supplier diversification, cost, and the difficulty in monitoring supply chains.
Digital supply chain control towers can help tackle these by empowering executives to embed sustainability as an additional metric in their workflows, alongside cost and service. This means greenhouse gas emissions can be allocated to shipments in line with GLEC methodology and EN1658 regulations, so order flows can be executed against the lowest carbon footprint. During order planning and transportation execution, teams can also make use of dynamic route optimization, smart order consolidation, and smart returns management to meet sustainability goals.
The MPO Supply Chain Control Tower for Multi Party Orchestration provides businesses across diverse industries with end-to-end visibility they can act in in real-time. By connecting people, systems, and processes network-wide on a single-view platform, shippers and logistics service providers drive visibility, collaboration, and optimization across both planning and execution. To learn more about how the MPO supply chain tower control technology can drive real impact and ROI for your business, contact us at [email protected], [email protected], or request a demo now.