You’ve likely heard it said countless times: Ask 100 people to define supply chain Control Towers and you’ll get 100 different answers. With a wide array of Control Tower solutions on the market, each with their own capabilities and differentiators, it can be challenging to decide which is the right fit and how to sell it internally. There are also many ways to implement a solution, so even after purchase, your strategic work has only begun.
Inspired by a recent conversation between principal Nucleus Research analyst, Andrew MacMillen and Alkimius founder and CEO, Mauro Gonzalez, here are some frequently asked questions we encounter on the topic, as echoed in some of their discussions.
1. What are supply chain Control Towers?
Nucleus defines Control Tower solutions as software which extends the view of an organization’s operation for supply chain planning and execution purposes. While there are a number of competing definitions, at the heart of it, Control Tower solutions aim to centralize data and visibility to maximize efficiency, coordination, and collaboration. What sets solutions apart is typically the scope, breadth, and depth of the offer:
- What data is being centralized (Planning? Execution? Both?)
- Across which areas of the supply chain will you gain visibility? (Upstream? Downstream? Reverse? All of the above?)
- What degree of control will you have over the insights you see? (Will you have to log in to another system to act or will you be able to do so from directly within the app?)
Control Tower solutions are meant to help businesses better manage their data – such as information about stock and order and distribution requirements – in order to improve the flow of products through the supply chain and meet targets, like delivery schedules and service levels. The more a solution connects this disparate information into a single view – converging both planning and execution, as well as all order and flow types – and enables in-app actionability, the greater a business’ ability to drive process improvement, cost reductions, and on-time and in-full (OTIF) delivery.
2. What kind of ROI does a digital Control Tower typically drive?
Results will certainly vary by business need, size, and complexity. The move to digitize operations will help any organization to automate and resolve repetitive tasks in a valuable, time- and cost-saving way. That said, companies running large and complex operations have the most to gain from implementing a Control Tower technology, especially one that’s part of an orchestration platform which can integrate their entire end-to-end supply chain ecosystem.
When managing a sizeable, global network, there’s tremendous advantage in having real-time decision-making and advanced problem-solving across all material vendors and logistics service providers. Visibility and control over all orders, inventory, and transport allows organizations to really track and trace and optimize every cost detail from start to finish and stay flexible and agile during disruption.
According to Mauro Gonzalez, founder and CEO of Alkimius Group: “The Innovation and Transformation Platform,” there are both measurable and immeasurable benefits to implementing a supply chain Control Tower. In Mauro’s experience, just from implementing the technology, businesses will save 4-6% in manpower optimization and 3-7% in operational costs from centralization and digitization. From there, businesses can save anywhere from 5-10% in transport opportunities and an additional 3-5% in efficiencies across inventory, warehousing, distribution, and other parts of the supply chain. Depending on the organization’s maturity and complexity, the numbers could be higher or lower.
Beyond these measurable savings, a holistic Control Tower solution helps companies manage risks and get closer to their customers – a priority for any successful business model. Improvements in management and communication, as well as data mining and integration, open up new possibilities for companies to really analyze their performance against customer experience and satisfaction. For example, by better answering questions like: What does the customer really want? And how can I anticipate their needs?
3. How can you ensure a successful software implementation?
No two companies are alike, and everyone begins the process at different stages of maturity. There can also be disparities in maturity across different areas within a company. Some will try to run before they can walk, zipping from zero to 100 and expecting everything to be seamlessly integrated and coordinated. But doing so can easily jeopardize operations. It’s important to understand that these transformations are a journey.
Indeed, based on conversations with customers, Nucleus Research analyst Andrew MacMillen revealed that the most common source of failure is project scope. That’s why Alkimius Group always conducts a preassessment for its customers first. Only after everyone has a clear idea of the starting point – or how they define ‘business as usual’ – and where they plan to go from there, can they begin building a roadmap that coordinates the tremendous organizational shift with other projects, priorities, and objectives.
The same is true for the greater multi-party network; companies must establish trust and buy-in. “If your partners aren’t on board with your vision, the solution you choose – no matter how robust – will ultimately fail,” says supply chain expert, Bryce Boothby. “As you define your priorities, also use this process as an opportunity to consult your network about how your needs align.”
In his recent article, MPO VP of Solutions Implementation, Gerry Daalhuisen, points out: “A successful implementation is also about connecting different worlds.” The Control Tower solution will be part of a greater multi-party ecosystem, so a good software provider will set up scoping sessions and workshops to grasp all the different business requirements and processes involved.
Once integration is complete and the platform is boosting efficiency and collaboration, businesses can focus on velocity and continuously improving how they leverage the platform, adding their “could haves” and “would haves” to their implementation roadmap.
4. How can a supply chain Control Tower help you innovate?
Control Tower technology is creating tremendous opportunities to reshape business models. End-to-end data integration and visibility on a single platform helps businesses anticipate their customers’ wants and needs and expand their offerings to broaden choice, improve convenience, and establish differentiation. Whether that means rethinking how they’re producing, stocking, or operating their supply chains, businesses can become more strategic and customer-centric.
By improving efficiencies and enabling automation and dynamic networking, businesses can also do more for the environment through sustainability initiatives. Moreover, when Control Tower technology spans returns management, companies can offer customers a greater value-add and engage in the circular economy.
Businesses can also innovate their approach to supply chain resilience and risk management. Real-time insight across the supply chain and in-app actionability helps leaders see their operations against the bigger picture and implement strategic and timely changes that continue providing the highest service levels and flawless customer experiences despite political, environmental, or economic shifts.
MPO’s Supply Chain Control Tower for Orchestration provides systems unification, network- wide collaboration, and process convergence. Businesses can automate, streamline, and optimize all inbound, outbound, inter-company, and reverse flow fulfillment across dynamic, multi-party network – all on a single platform. Configurable and scalable, the technology also accommodates a range of enterprises worldwide and is flexible to effectively manage risk and the impact of disruption.
MPO also partners with Alkimius Group, who helps clients from different industries and sectors evolve their value and supply chains according to the new industry 4.0 requirements. Alkimius covers the entire suite of solutions, from business strategy and process re-engineering to technology evolution via data analytics, Control Tower managed services, and innovation lab solutions.