Global enterprises have faced ballooning logistics costs and immense supply chain complexities during the past several years. To survive their new reality, many are considering implementing supply chain control towers (SCCTs). SCCTs can deliver a real-time single source of truth for all enterprise-wide supply chain data while enabling intelligent predictive and prescriptive solutions. Yet few companies have moved beyond the planning phase due to the challenge of integrating so many disparate systems.
Providers like Oracle and SAP have built SCCT capabilities into larger enterprise-wide CRM, MES, and ERP systems. Supply chain management vendors like Blue Yonder, Manhattan Associates, and Kinaxis are bundling SCCTs with their other supply chain-specific applications. Vendors like TadaNow have begun offering standalone SCCT products. Some organizations have even chosen to build their own SCCTs rather than buy a pre-built solution. This boom in SCCT interest shows a clear need, but the solution landscape also underscores the complexity. Where can enterprises begin?
It's Not an Off-the-Shelf Thing
There’s a tendency to think of an SCCT as a product, a defined solution that one can simply buy (or build) and then begin using. In fact, each supply chain control tower is its own unique toolbox. The strengths and weaknesses of individual SCCTs can vary greatly. Often, enterprises only realize the limits of their SCCT solution after they’ve purchased or implemented it.
Yes, SCCTs are becoming essential for any business that depends on a complex global supply chain. But organizations feeling the pain of opaque, inefficient supply chains can’t just jump at what seems to be a cost-effective SCCT solution. First, they need to do some due diligence and adopt a modular mindset: Of all the SCCT capabilities in the market, which ones do they truly need, and how can they implement those modules most cost-effectively?
Identifying the Right SCCT
Rather than thinking of SCCTs as if they were a single kind of product, it’s better to think of them as four broad categories of products:
- Logistics/transportation control towers offer advance shipping notifications, delivery data and track-and-trace information, and visibility into inbound and outbound logistics.
- Fulfillment control towers specialize in assisting package shipments and are designed to expedite orders while reducing the overall cost-to-serve.
- Inventory control towers enable real-time insights into inventory management, with a special emphasis on preventing inventory stock-outs and shortages.
- Supply assurance control towers ensure that there’s an adequate supply of materials, components, and/or incoming products.
Within each of these categories, enterprises need to decide which SCCT capabilities are required given their SCCT use cases, which are “nice to have,” and which risk going unused. For example, a manufacturer with a small direct-to-consumer footprint might not want to enable a fulfillment control tower. But if they need to manage wildly fluctuating supply costs and sources, they might want a powerful supply chain assurance control tower.
SCCT Implementation Without Headaches
The most significant challenges related to SCCT implementation include:
- System compatibility: The SCCT needs to be compatible with existing systems (ERP, WMS, TMS, etc.), which may require customizations, middleware integration, and/or API development.
- Data integration and data quality: A significant effort may be required to harmonize/consolidate data and minimize inaccurate, incomplete, or inconsistent data.
- Change management and organizational alignment: Enterprises need to model the impact of changes to processes, roles, and responsibilities on different user personas; prepare training that will support the new ways of working; and ensure alignment across departments and functions.
Many of the same best practices for any large technology transformation will help reduce implementation headaches for SCCT implementation. For example: clearly defining the scope, emphasizing agile design processes, and establishing mechanisms to monitor business feedback and incorporate it into the final architecture. Again, think of SCCTs as a suite of capabilities, not a simple plug-and-play product.
Cross-functional teams are critical to effective SCCT implementation. These collaborative groups should include representatives from key functions like purchasing, warehousing, transportation, and import, as well as category managers. Key KPIs to will include on-time delivery, inventory turns, fill rates, and cost of goods sold.
What Successful SCCT Implementation Looks Like
SCCTs are designed to quickly and reliably answer questions that have fallen between the cracks of previous supply chain solutions: How much stock is present in our entire supply chain? Will the product arrive in time for our scheduled promotion? What is the probability of re-work if I switch suppliers? The control tower will answer these questions with real-time, AI-driven proactive recommendations.
In the past, planners often felt they were clinging to the perimeter of their supply chains, struggling to extract data from multiple opaque systems. An effective supply chain control tower puts planners at the center of the supply chain ecosystem, empowering them to focus on planning and making the insights-driven decisions that will propel their business forward.