Posted: 22 Jun. 2020 4 min.

Control towers offer a powerful response to your supply chain challenge

Topic: Supply Chain

Organizations across industries need to evolve their supply chain through the crisis to increase their agility and flexibility in response to the COVID-19. Effective control towers are an ideal solution.

Lately, my dialogues with clients have differed quite a bit from the normal. To say that a lot have happened in the last months would be quite an understatement. COVID-19 has impacted supply chains greatly, and leaders are looking for the right answers. How do we adjust our supply chain to still be profitable with a 20 per cent reduced top line while adjusting to customers new behavior? And how do we simultaneously make it scalable to growth in the future?

I believe control towers can be an ideal solution that provides increased flexibility, efficiency and risk management by giving organizations greater transparency and insights into every section of their supply chain. The right insights do not only allow organizations to respond quicker to change at both an operational and a tactical level, but also to build a supply chain that is readily changeable, adaptable and resilient.

In the current business landscape, flexibility is key for scaling up and down, adapting to the market and customer needs. While this tends to be an everlasting condition for businesses, the COVID-19 has certainly amplified it.

 

In the last few years, the technology that supports control towers has matured greatly. Organizations ability to locate and capture data, analyze it effectively and extract valuable insights are evolving exponentially. This makes control towers an important asset in steering successfully through the crisis.

Enhance visibility with control towers
Visibility will be critical to managing through the recovery—providing the best and most timely information available to support timely and confident decision-making. Control towers provide right time data visibility, proactive alerts, prescriptive insights, and automated execution. In some cases, these control tower solutions may need to be quickly pulled together. Worldclass control towers will be enabled by artificial intelligence and machine learning (AI/ML) and advanced analytics and ingrained in business processes through change management. Some examples to consider in managing through this crisis:

  • Supply network risk control tower. Proactively identify suppliers and/or commodities that pose elevated levels of supply chain risk in both your direct supplier base and within the extended supply network (i.e., your supplier’s suppliers). Visualize key performance indicators across supplier contracts, predict stock-outs, bottlenecks, and dips in contract On-Time In-Full (OTIF) performance as supply chains restart and work back to a state of synchronization.
  • Customer service control tower. Provide real-time visibility to the status of customer order fulfillment and opportunities to improve service levels (e.g., leveraging inventory beyond the customer’s primary fulfillment centre). Enable more effective communication with customers, including product availability expectations and more accurate delivery date estimates.
  • Logistics control tower. Provide visibility to inventory levels across the network to satisfy customer demand. In addition, provide visibility to the state of the logistics network, including logistics backlogs and anticipated delays due to port congestion, border delays, and logistics infrastructure capacity constraints. Leverage the visibility to streamline material flows and improve customer service.
  • Factory control tower. Gain increased visibility to supplier constraints, inbound materials and material quality expectations to improve labor scheduling, asset utilization, and throughput during the disruptive period in which supply chains restart and ramp up to normal flows. In addition, improve visibility to the status of production across facilities, which will likely not be operating at full capacity and normal performance levels, to proactively address operational issues and ensure any impact to customer promises can be communicated in a timely manner.
  • Quality control tower. Detect and prioritize quality issues using advanced analytics algorithms to more quickly and accurately address inbound materials and parts quality issues and finished goods quality issues as operations restart and quality issues are expected to increase

In my experience, the key to successfully build and deploy effective control towers is to map your supply chain issues and begin solving them in the order that has the biggest impact on your business. Is there e.g. an issue with the export? The production? The maintenance? Examine the part of the supply chain related to the issue, and ask yourself: What data (and insight) do I need, to find the right solution to the issue? How do I extract the data? How do I analyze it, and who needs these insights to make an informed decision?

Start small, work agile and focus on your issue, solving one before you move on to the next. Deploy your control towers where they make the biggest impact and then scale as you go. Simplify your approach and begin locating three data points in your supply chain related to your issue, capture the data, perform analytics and then use your insights to strengthen your supply chain. This approach can increase your flexibility, efficiency and risk management elevating your ability to steer safely through the COVID-19 crisis.

More about the author

Tore Christian Jensen

Tore Christian Jensen

Partner

As a part of the Strategy & Operations practice Tore has worked with analysis, development and implementation of operational strategies. Tore has deep experience with aligning business models to changing market demands through optimisation of business processes and aligning systems, organisation and governance accordingly. He has industry experience from manufacturing, transportation, consumer products and energy. His main focus is on on the operational core processes but he also covers administrative support processes. As a program manager Tore has been leading transformation projects for international clients heading multiple parallel projects and reporting directly to executive committee members. His responsibilities cover everything from initiating assessments, identifying opportunities for improvement to building business cases and following up by designing solutions and driving teams through implementation.