Let’s start with what companies are typically hoping to achieve when implementing a control tower. In speaking to executives and business leaders, the most common reasons for deploying a supply chain control tower are to:
Make significant operating improvements
Achieve the (seemingly) elusive end-to-end visibility
Become more agile, and respond better to customer needs, market changes and incorporate technological innovations
Improve on-time, in-full performance, and
Realize cost reductions
While not unreasonable, most companies struggle to meet these objectives for such reasons as rising costs and lack of control. However, when digging a bit deeper, the root of the problem often lies with current technology limitations, as organizations are struggling with issues such as multiple information sources and a lack of integration across systems.
Needless to say, each of these issues presents a huge problem, as organizations have a lot of data, but much of it is duplicated and contradictory. This leads to a lack of confidence because they have no single version of the truth. Worse, there is no solid basis for making decisions and optimizing the supply chain.
Companies want to solve these problems and update their systems, but they don’t believe it’s possible or practical. They know that they will still need to rely on many of the systems and they don’t want to risk losing that functionality. Upgrading to new systems is also perceived to be costly and slow. For many companies, the fear of change management and the trauma of past upgrades are holding them back. Businesses limp along with aging and sub-optimal systems, and the result is they are forced to manage the problems and supply chain disruptions outside of the systems. Given this scenario, it’s no wonder that operations are often labor-intensive, slow, and deliver poor performance.
Pros and Cons of Supply Chain Control Towers
In response to these problems, many companies choose to implement a control tower to provide greater visibility and some degree of control across the supply chain. However, when they do, the results are often disappointing, as the concept of enterprise control towers, while sounding great, has a false and inflated sense of value. Why?
In today’s economy of globalized and outsourced business, an internal enterprise control tower that is limited to an organization’s four walls will not work. This is because the control tower is only as good as the foundation it rests on.
Enterprise control towers built on loosely coupled legacy systems introduce latency at the foundation. Much of the data in the supply chain is still locked in silos, and once the data is accessible and shared, is usually stale due to batch processing.
In this scenario, costs such as inventory in supply chain situations are pushed out to the weaker members of the value chain even though your business ends up paying for it indirectly anyway. This is why many control tower implementations, while good in theory, lead to disappointing or mediocre results.
Beyond the Enterprise: Network-Based Control Towers
As organizations seek to achieve even greater results, they have learned that control towers need to be able to deliver real-time data and be connected to multiple-parties using the same network. That way they have access to data from all parties and can synthesize it into a single version of the truth. The real-time data generated provides clear visibility, reliable decision-making and powerful optimization that considers all relevant factors in the supply chain.
With that foundation, these new network control towers provide powerful benefits such as:
Visibility beyond four walls by connecting trading partners and providing that “elusive real-time visibility” that every business leader needs and wishes to have
Agility to respond to changing business needs or objectives
Rapid on-boarding and activation of partners on the network, which creates the ecosystem and generates the value from day one
And it gets better. All too often, control towers are misunderstood as advanced “visualizations and ad-hoc reporting” solutions which is not true. While that is a part of their function, it is only the beginning.
Network control towers are capable of much more. For instance, we have seen the biggest gains from predictive analytics coupled with autonomous agents that detect issues early and solve them before they become major and costly problems. But to be able to use autonomous agents, you need to be able to represent insight across the total network, not just the operations within your four walls.
A network-based control tower transcends the walls that contain enterprise control towers and limit their results. A network control tower is more than a reporting dashboard, in that it spans enterprises and systems while covering supply, demand, inventory and logistics functions. It is “network informed,” and able to optimize and execute while considering all variables and constraints.
These modern networks also eliminate static, stale data and assumptions, running instead on real-time execution data. They use actual, dynamically computed lead times, not static assumptions as its autonomous agents use real-time transactional states to identify and fix issues as soon as they emerge.
Network-based control towers not only offer improved performance based on real-time, network-wide data, they are also easier and cheaper to deploy. They do not use complicated point-to-point connections like typical control towers, but instead exploit pre-existing network connections. As a result, companies can implement faster while realizing more value from the comprehensive visibility, optimization and collaboration that a network-based control tower provides.
Modern network control towers are key to extending visibility and control beyond the enterprise, as these collaborative platforms engage your trading partners in real time. More importantly, they provide the means for the entire supply chain to make better decisions and achieve greater optimization while promoting teamwork, and ultimately delivering superior results.
Srinivas Guddati is executive leader of product engineering for One Network Enterprises.
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