During the pandemic, everyone experienced supply chain disruptions in some way: the lack of toilet paper on supermarket shelves, a shortage of FFP2 masks and medical equipment, a scarcity of timber, or even the scramble to find an adoptable puppy. COVID-19 brought into sharp focus the vulnerabilities in today’s global supply chains. When you combine those vulnerabilities with the Amazon Effect, geopolitical challenges, and the shift towards reshoring and nearshoring, business leaders are more aware than ever of the potential for disruptions in the supply chain.

On top of all that, companies are now also experiencing decreasing customer loyalty along with increasing pressure to deliver quality products, services, and customer experiences at competitive prices. This combination of circumstances makes it extremely important that supply chain teams know what is happening in their supply chain right now, why it is happening, and how to address it quickly—before small disruptions become major, costly problems.

Supply chain control towers provide the visibility that is essential for organisations that need to navigate this complexity.

As we emerge from the turmoil of COVID-19, the need for end-to-end supply chain visibility to manage complex, modern networks is more vital than ever.

What is a supply chain control tower?

A supply chain control tower is a cloud-based solution that leverages advanced technologies—such as artificial intelligence (AI), machine learning, and the Internet of Things (IoT)—to proactively manage supply chains.

Supply chain control towers provide end-to-end, real-time visibility across an organisation’s entire network, including suppliers, manufacturers, and business partners. They enable organisations to manage what they cannot see, plan for unlimited unknown variations, and mitigate disruptions and risks before they become problems. In a world where historical data can no longer accurately predict current and future demand, and disruptions range from extreme weather to trade wars to tankers blocking the Suez Canal, that visibility and instant access to up-to-date information is essential for supply chain agility and resilience.

Data is the lifeblood of control towers. These systems collect large amounts of up-to-the-minute data from across the supply chain to provide an accessible, usable 360-degree view of what is happening anywhere in your supply chain in real time. That data is used to:

• Conduct what-if analysis and compare scenarios
• Run simulations of changes in demand and supply
• Identify issues with customer notifications and address them promptly
• Collaborate with partners across the supply chain
• Automate exception flagging and handling

As supply chain control towers have evolved, they have broken down functional silos to allow organisations to connect to their entire supply network—enabling greater supply chain visibility, collaboration, and optimisation.

Control towers—yesterday and today

Supply chain control towers are not new, but in their initial iterations they were siloed and linear, only offering insights into a specific area of operations such as transport, logistics, or warehousing. They were usually on-premises software solutions with limited capabilities.

Types of control towers included:

• Logistics control centres
• Operational control towers
• Transport control towers
• Analytical control centres
• Inventory control towers

Analytical control towers provided analysis but no prescriptive guidance on how to address problems, for example. And transport control towers tracked transport-related data but nothing beyond that. Most of these control towers only provided visibility to immediate trading partners. But as the speed and complexity of supply chains increased, it became more difficult to organise and solve problems across siloed, legacy systems and control towers.

The rise of the cloud, with its computational power and ability to ingest and analyse large amounts of data—combined with artificial intelligence, machine learning, IoT, and predictive and prescriptive supply chain analytics—changed all of that. Today’s supply chain control towers provide end-to-end visibility and in-depth context into all supply chain operations.

As they evolve to encompass the entire supply chain, control towers are in high demand. According to Grandview Research, the global control tower market size was valued at USD$2.58B in 2018 and is expected to grow to $17.24B by 2027.

Benefits of a supply chain control tower

By providing end-to-end visibility, decision support, and the ability to course-correct quickly, a supply chain control tower makes an organisation’s supply chain more resilient. And a resilient supply chain can avoid the impact of disruptions or rapidly recover from disruptions when they do occur. The key benefits of a supply chain control tower include:

• End-to-end supply chain visibility
  By having visibility across the entire supply chain—including suppliers, manufacturers, transporters, warehouses, and third-party logistics (3PLs)—companies can proactively manage their supply chains, which reduces risks and costs.
• More accurate forecasting and decision-making
  Being able to aggregate data, connect it, and expand it through predictive analytics leads to better, more automated decision-making and self-correction—resulting in more efficient operations and less waste.
• Greater supply chain agility
  Agile supply chains can adapt when the unexpected occurs. That agility creates better customer experiences, faster response times, and a more efficient supply chain overall.
• Better supply chain collaboration
  A supply chain system that connects partners, suppliers, and logistics service providers facilitates cross-organisational collaboration. This ability to address issues directly with partners leads to faster issue resolution, lower costs, higher customer satisfaction, and increased partner and talent retention.
• Optimum stock levels
  Supply chain control towers provide visibility into stock across the entire network—so companies have what they need, where they need it, when they need it. They increase stock turnover and profits, and reduce stock holdings, stockouts, and material shortages.

See, decide, act: Preventing supply chain disruptions

Supply chain control towers enable supply chain executives to see, decide, and act in real time.

Supply chain control tower process

1. See: Identify the causes of exceptions, trace problems to their source, and gain visibility across silos, including ERP systems, warehouse management, and order management.
2. Decide: Use scenario-based modelling and supply chain analytics to create reactive and predictive alerts, assess the impact of exception conditions, and understand and prioritise issues as they arise.
3. Act: Make better and faster decisions based on a comprehensive view of the data combined with detailed visibility, which optimises the supply chain.

How do supply chain control towers work?

Everything that happens within a supply chain control tower relies on data—inputting usable data, analysing it accurately and efficiently, presenting it in an actionable way, and leveraging it to drive informed, optimised decision-making. The better and more comprehensive the data your supply chain control tower uses, the better your results will be.

A supply chain control tower:

• Automatically collects and integrates structured and unstructured data from across the supply chain—from barcodes, remote sensors, and the Internet of Things (IoT) to weather and traffic data—to provide real-time information and insights.
• Combines that data with logic to provide up-to-date information via user-friendly dashboards that offer insights into core operational functions such as product development, order management, inventory planning, manufacturing, and more.
• Harnesses detailed visibility to enhance agility when responding to tactical and operational disruptions. It can also predict events that may occur in the near future. And it does so quickly, so supply chain teams can anticipate and prioritise issues.
• Supports automated decision-making and self-correction, partly due to the ability to identify the causes of issues and trace problems to their source. And continuously learns, senses, responds, and improves thanks to AI and machine learning.
• Makes it easy for stakeholders to create procedure playbooks that define how to resolve specific supply chain planning issues. These playbooks can be shared with supply chain teams when an issue is detected to help streamline and standardise their response.