5 Ways Control Towers Can Help Your Business Succeed
The future of supply chain management is driven by customer demand. Businesses today require adaptability and speed to meet the markets’ needs. With higher expectations for speedy deliveries, businesses can find the edge they seek by investing in control towers.
Let’s take a look at what a control tower is, the types that exist, and how they work to improve supply chain management.
What is a Control Tower?
The term ‘control tower’ is used flippantly to mean different operations or levels of control, but often its definition is not clear-cut. Let’s start with what control towers are not.
They are not physical buildings overseeing operations in the sky like the control towers at airports, but their purpose is similar. A control tower is a piece of software, or a suite of software that is used to provide end-to-end visibility across the supply chain, collect and analyze large amounts of data, and use predictive and prescriptive analytics to automate decision making and exception resolution.
The purpose of a control tower is to give a greater level of control and knowledge of the entire picture to every link of the supply chain. Control towers use cloud-based intelligence and predictive analytics to not only detect problems but learn the best course of action to diagnose the issue and prevent it from happening again.
The revolutionary push from reactive to proactive action is the heart of control towers. As the ability to analyze data from your supply chain develops, so too will a control tower’s ability to learn and maximize efficiency from origin to destination and everything in between.
What are the Benefits of a Supply Chain Control Tower?
Any manager or supervisor can tell you that exceptions happen. Emergency shipments, delays, road work, inclement weather, sudden loss of inventory… exceptions have many faces.
Ultimately, they come in part from a lack of E2E visibility. Control towers provide visibility to detect exceptions in real-time so the time between exceptions and resolutions is minimized. Shortening the time it takes to identify and resolve exceptions not only enhances performance but also reduces the overall cost of operations.
It’s clear to see how information communicated and shared between, say, the shipper sending goods and the trucker guaranteeing availability on arrival can translate into shorter delivery time and lower costs.
Let’s say a shipment is stalled at the destination for something the shipper did not include on the Bill of Lading. It might take at least one business for the issue to be assessed and handled, another business day to resolve and pay demurrage charges at destination. With a control tower and the right parameters, exceptions can be caught before arrival to prevent loss of time and money at destination.
Control towers will also allow all partners, shippers, carriers, and suppliers included, to gain access to information and shared data to better understand the collective process and where exceptions exist, and how they can be remedied.
Using the power of data and predictive technology, control towers can not only spot exceptions along the supply chain, but they can also diagnose and prescribe solutions in real-time. This allows companies to work smarter, not harder. Control towers will also adapt and continuously learn more efficient practices, meaning continuous improvement will no longer be constrained by manual hours of research and ineffective procedures. Companies will no longer need to implement a new procedure and ‘see’ if it works.
Autonomous Decision Making
This is the MVP feature of control towers and could be the future of the entire supply chain industry. It’s one thing to collect data, analyze it, run scenarios and come up with a prescription to optimize efficiency and minimize costs. But without any action, it’s just data and a plan of action dependent on human intervention to execute.
Control towers take this information and execute it automatically, essentially implementing the most effective strategy on its own. This level of autonomy would revolutionize your business with the power of data and information that previously would have taken hundreds of human hours in research in a fraction of the time.
What are the Types of Control Towers?
Before we get to brass tactics, it’s important to understand that control towers are not created equally. Understanding the types that exist can help you better understand which type of control tower will benefit your business the most. There are two different classes of control towers based on their functions…
Analytical Control Towers
achieve the analytical portion of their purpose. They consolidate data, diagnose exceptions and prescribe outcomes based on their required parameters.
For example, an analytical control tower may be used to predict the most cost-efficient truck route based on historical data of average time to destination. Other data can also be aggregated, such as a companies’ on-time delivery track record and average fuel usage.
Analytical control towers cannot, however, act on said data. They cannot autonomously execute any plan based on data alone, thus there must still be someone to see the data and make a decision.
Operational Control Towers
use predictive analytics to not only generate optimal outcomes but also implement them automatically. Now that we’ve seen the two classes of control towers, we can go into the types of control towers that exist.
Now, let’s take a look at how these two types play out when applied to logistics…
These control towers analyze data and implement actions based solely on the transportation portion of the supply chain. They do not aggregate data from the shipper, carriers, or other legs of the supply chain and instead focus on deliveries, tracking and tracing, on-time delivery, and work closely with a TMS.
Exceptions can only be analyzed if they happen during transportation. They are limited in design but can still serve many companies who do not yet have the infrastructure for a Supply Chain focused control tower. For example, a transportation-focused control tower can analyze the fastest route to destination and would automatically download the route to transportation and constantly update for faster routes. It could not, however, predict if production at the manufacturer has slowed due to low inventory and causes delay at the origin.
These control towers can provide true end-to-end visibility and control, taking data from the Shipper, Carriers, Manufacturers, Suppliers, Inventory, Transportation, and Sales. This control tower is much more powerful and complex as it can detect exceptions among every level of the supply chain and prescribe processes that optimize efficiency and reduce costs down the line.
For example, a supply chain-focused control tower can detect if sales has placed a large order to the manufacturer but Inventory levels dictate that the purchase will result in an excess of parts.
Control towers can push your business to the next level with autonomous decision-making and end-to-end visibility. Implementing control towers is no easy task, and without a streamlined infrastructure, may only yield suboptimal results. Also, true automation is far from the norm of our current technology.
However, the benefits of implementing control towers far outweigh the cost to upgrade your businesses’ infrastructure. Control towers are proof that automation and data are the future of the global supply chain industry.
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