Limited functionality available
Rapid technological growth has challenged traditional ways of operating and managing supply chains. As with many ways in which business is conducted across the globe, the COVID-19 pandemic highlighted the complexity of the geopolitical, regulatory and operational environments that organisations exist in, and the inherent risks they are exposed to. Even in the age of Industry 4.0 and improved data analytics capability, disparate data sets and myriad technology solutions have led to delays in supply chain leaders receiving actionable and predictive insights. The effect has been a lagging response to real time events that saw bottlenecks in supply and ongoing and costly logistics delays causing diminished revenue and margin impacts.
From challenge rises opportunity, and the digitisation of the supply chain harnessed through cognitive control tower capability enables greater dynamic management than ever before. By offering in-depth analyses to support agile decision-making and faster execution the control tower presents a real opportunity for change. In Australia there appears to be some confusion as to what a control tower is and the true benefits, to the point where investment in protecting arguably one of the important assets of some organisations continues to be overlooked.
Traditional supply chain control towers were purpose built to evaluate a supply chain in isolation, viewing optimisation as a direct outcome of reaching determined KPIs, monitored by the control tower. This provided executives with insights and operational performance visibility, and enabled data sharing between trading partners.
Unlike the traditional control tower, modern cognitive control towers apply a more holistic approach when evaluating the supply chain, generating insights that support a range of strategic and functional outcomes. These outcomes are enabled through the use of predictive analytics, smart factories, intelligent supply, digital development, and dynamic fulfillment.
Connecting people, processes, data, and the wider organisation with the underlying technology systems, cognitive control towers enable the business to continuously track the incoming signals of a specific business issue from symptom to root cause. With vast geographical and complex supply chains, identifying issues in real time through dashboards and configurable alerts has a significant business benefit in mitigating possible disruption and ensuring continuity of supply.
For example, Deloitte’s Aftermarket Management Control Tower uses advanced statistical analysis of inventory drivers to balance working capital costs against service level targets. It has already enabled $200M in cost reduction opportunities1.
What are the benefits of cognitive automation?
Cognitive automation enables 24/7 real-time connectivity to structured and unstructured data points coupled with AI capability, to deliver impact analysis or scenario modelling that deliver meaningful, actionable insights without overwhelming users with large amounts of data. Fundamental to the operations of cognitive control towers is fit for purpose analytics, allowing the organisation the ability to identify and flag risk indicators out of large and continuous data sets, specific to their operation. More importantly is the AI capability means that leading solutions will continuously learn over time.
To deploy a control tower an organisation can outsource or license a suitable supply chain platform that meets the right capability, or in some cases with the right processes and operating model in place leverage existing functionality. Meeting the right business needs requires an understanding of your priorities and the challenges you’re looking to solve for, as well as your current technology landscape, processes and a fit-for-purpose operating model and governance.
When successfully implemented the business benefits of a cognitive control tower can include:
Does maturity matter?
As a first step it is important businesses understand their maturity before investing in a cognitive control tower offering. Understanding the spectrum of cognitive control towers is important to matching organisational maturity with technology requirements to ensure a fit-for-purpose build. For organisations just starting out or looking to enhance their supply chain perspective, even simple control tower capability that leverages existing systems can realise process improvement benefits and support more nimble decision making.
Maturity assessments designed to understand the organisations functional maturity focus on:
To support your journey towards understanding the benefits of cognitive control towers and to create a roadmap for change, Deloitte’s Supply Chain and Procurement practice brings together APAC’s leaders in control tower and technology integration and adoption solutions to help you address the way forward. We do this by assessing an organisations supply chain maturity and control tower readiness and can undertake a market scan to match your requirements with the solutions available in the market.
If you are interested in learning how we can support you in building resilience by creating a holistic view of your supply chain, please don’t hesitate to get in touch.
1 Forrester recognised Deloitte as a leader, Enterprise Insights Service Providers, Q2 2020.
To discuss this topic in more detail, please contact:
APAC Sourcing & Procurement
Lead Partner, Sydney
Supply Chain & Procurement
As a Director in the Supply Chain & Procurement practice Nathan brings 15 years of industry and consulting experience along with a passion for supporting clients in creating the procurement function of the future. His particular focus is on improving the post-contract supplier experience and overarching supplier relationship management, including contract management, supplier performance, risk management and identifying strategic suppliers to partner with and encourage continuous improvement and innovation.