Supply Chain Control Towers

control_tower_smallIn a nutshell, a Supply Chain “Control Tower” oversees inbound and outbound distribution flows across multiple divisional organisations. Much like control towers found at every airport around the world where the control tower personnel control arriving and departing flights.

Supply Chain “Control Towers” provides visibility and transparency in their operations. However, on the surface, it seems that it does not provide much benefit to an organisation when being applied to a distribution scenario; its offering is fairly narrow in this instance. Benefits are realised when a single centralised system can access real time data from a variety of sources throughout the chain due to the increased visibility and transparency to everyone in the chain. Problems can be identified much earlier.

Whilst the visibility of issues might, at first glance, appear to be rather uninteresting, it is slightly better than not having any idea about the issues until they hit you like a tonne of bricks. It is better to be proactive about planning actions to mitigate these impacts before they occur. To do this, you must be cognizant that the problems exist. Consequence modelling and scenario planning, based on what you know will give the organisation the ability to identify exactly what is required to ensure that the impact is minimised by collaborating with all the supply chain stakeholders. For instance:

  • Do we need more staff?
  • Do we need to plan another shift?
  • Are more materials needed?
  • Do we need more trucks?

For stakeholders in the supply chain to take advantage of the benefits of the control tower concept, there needs to be significant collaboration for it to work at its best. If collaboration is to work, you must build the necessary technology tools into your environment to support it.

As with all technology decisions, ROI needs to be clear, if it is not, do not invest.

PwC Global Supply Chain Survey 2013

According to the PwC Global Supply Chain Survey 2013 leaders are investing in a number of differentiating practices:

Supply chain value driver Top three differentiating practices of leaders
Maximum delivery performance
  1. Collaboration with key customers on planning
  2. End to end supply chain planning and visibility
  3. Vendor managed inventory direct replenishment model
Minimised costs
  1. Best cost country sourcing
  2. Diffentiated order to delivery time
  3. Differentiated service level, including potential reduction
Maximised volume flexibility and responsiveness
  1. Internal capacity flexibility 80% – 120%
  2. Flexible shift models/payment structure
  3. Regional supply chain set up
Minimised Risks
  1. Multiplication of sources and sole sourcing avoidance
  2. Regular review of suppliers’ financial risk and mitigation through risk-sharing partnerships
  3. Visibility and regular monitoring of main suppliers’ operational indicators
Complexity management
  1. Development of multiskilled employees to cope with complexity
  2. Late stage product customisation
  3. Use of distributors and other channel partners
  1. Agreement with supply chain partners to adhere to heighes ethical standards
  2. Responsible supply chain partner footprint and procurement framework
  3. Internal carbon footprint optimisation and improvement
Tax optimisation and efficiency
  1. Manufacturing and assembly optimisation (toll manufacturing)
  2. Localisation of inventory ownership in tax efficient countries
  3. Localisation of procurement organisation in tax efficient countries e.g Singapore, Switzerland, Cayman Islands