What Does Control Tower and the song “Chopsticks” have in common?

  The “Big Apple”…home to such icons as the Empire State Building, Times Square, Radio City Music Hall and FAO Schwarz. My family and I were visiting years ago on a summer day, and we spent time at the landmark toy store. It was at that store that Tom Hank's movie, "Big" was filmed. Indeed, we saw the keyboard and I even attempted to play it just like him! While wondering around, I noticed a large floor display area that brought back childhood memories. It was a large railroad yard layout equipped with various engines and cars. The attention to detail on the landscape and building were second to none. Off-centered was the control tower and directly over that was the actual control tower where people read the various readouts and acted upon the information directing the trains. It was during this observation of “controlled chaos” that I realized I was watching what today’s supply chain should work...like a control tower.

Today supply chain is more akin to ecosystems or in this case a railroad yard more so than an airport but without a control tower or one that is lacking. Today’s business, both large and small, are relying on an increasingly complex ecosystem of raw, materials/components, contract manufacturing, original equipment manufacturers, and trading partners to achieve the “holy grail” of demand-driven fulfillment. All of which uses a different process means, and systems to communicate and manage their information…If you are lucky!

Exasperating the situation, companies still suffer from organizational “firewalls” and breaking down those internal barriers is the only way achieve true “end-to-end” integration. Additionally, I’ve seen clients whose own group feel that what they’re doing now is just fine and see no need to evolve. So how does one do this given the above? The approach is simple in nature, but complex in execution and requires a three-prong approach leveraging people, processes, and technology.

When dealing with people or more fondly known as “the Human Factor,” you can guarantee a whole host of errors. To minimize those errors, one must engage those on a two-fold front – emotionally & logically. Ultimately it is the “Human Factor” that will make or break any large scale / transformational breakthroughs. Thus one must take a holistic view from an organizational, functional and even cultural (especially if the company is foreign own) thus beginning the process of understanding the barriers to collaboration and allowing you to address them. This requires a well thought out change management strategy that engages all levels of the organization as well as key elements of the external supply ecosystem and the timely and proficient execution.

Processes not only involve the supply ecosystem and sourcing but must encompass finance and marketing as well. One of the biggest complaints I’ve heard over and over again is limited visibility. Detailed knowledge is often maintained “locally” while the “higher ups” are partially or wholly unaware of the variability of day-to-day operations. Externally, the supply ecosystem may not have any formal communication mechanisms but rely solely on ad hoc word of mouth. To further exasperate the problem is the internal silos comprising of logistics, sourcing, finance, and marketing where critical data is either not shared or shared on a limited basis. This makes it tough to identify the cause and corrective actions promptly, which allows for limited options for response.

Probably the biggest symbol of the silo nature of companies and their supply ecosystems is Information Technology. In the past specifics, platforms were chosen based on explicit functional needs and wants. From sales & marketing leveraging CRM (Customer Relationship Management) to manufacturing & sourcing utilizing ERP (Enterprise Resource Planning) and warehouse & distribution centers employing inventory & WMS (Warehouse Management Systems) and everyone else operating on ad-hoc Excel spreadsheets. Over time we recognize the need to integrate these systems and today you have such industry leaders as E2Open, JDA, & Kinaxis.

These leading vendors, as well as some up and coming platforms such as Aera, are well on their way to building robust solutions for control towers, solutions that can oversee supply chain flows in real time and respond to changing market conditions in real time with either new production orders, rerouted shipments or recalculations of inventory holdings as far down the supply chain as third-tier suppliers. In the coming decade, control towers will leverage the power of machine language and engage an AI thus possibly becoming the most important supply chain application of all, a necessary component for any enterprise operating a demand-driven supply chain capable of responding to a volatile global market.

If enacted and executed correctly the power of a control tower is powerful. Control towers offer considerable benefits and capabilities, from end-to-end visibility mentioned above to advanced automation. Some other of key capabilities:

End-to-end Visibility – visibility across supply chain partners, including suppliers, contract manufacturers, transportation carriers, third-party logistics

Collaborative information sharing – share information and collaborate in real-time

Management by Exception/Early Warning – resolve supply chain disruptions before they disrupt your business

Predictive and Prescriptive Analytics – using predictive and prescriptive analytics data to drive the right course of action

Autonomous decision-making and control – take the robot out of the human and boost productivity

AI, the cognitive aspect that may well be the most powerful – the self-correcting supply chain with decision-making and machine learning