How realistic is the Supply Chain Control Tower?
If you follow the logistics press, you may have come across the concept of the “Supply Chain Control Tower”. This is a relatively new idea, but one that has had a big impact on the aspirations of some members of the logistics industry.
Every definition of the supply chain control tower is slightly different, but they all share some common traits. A succinct definition would be “a central hub where data in the supply chain is collected and collated and then used to achieve short and long term objectives”. However, for many this term has also been used to describe the pinnacle in supply chain visibility. The control towers of the future will collect data automatically and will cast as wide of a net as possible. All internal forecasts would be added and external factors like weather patterns would even be included.
As an aspiration, the supply chain control tower seems to be a good idea. But is the concept really grounded in reality?
There are a series of hurdles companies would need to overcome before a supply chain control tower could exist, the biggest being the right access to external data. Supply chains rarely operate in isolation and most supply chains are engaged with numerous external companies. For a control tower to work you would need access to your supplier’s information, but this isn’t as simple as just integrating your systems.
Imagine a scenario where your data tells you there will be a 30% spike in the demand for one of your products. To prepare for this extra demand you place a large order with your supplier, but the supplier is already working at capacity for another customer. Your control tower may have been able to predict the demand, but unless your suppliers are willing to cooperate the data might prove useless.
In an ideal world, you would have good constant communication with your suppliers and you could both come to decisions that are mutually beneficial. However, in today’s fast moving supply chain this isn’t the case.
On a more basic level, you may also question whether you want some data to effect the way you operate. For example, using sales forecasts to prepare for extra demand seems sensible, but forecasts are just that. Preparing extensively for demand that doesn’t materialise could be more damaging than not preparing at all.
These hurdles do not mean that operating a supply chain control tower isn’t a good aspiration; it is always desirable to have as much information as possible when making strategic decisions. However, they do suggest that having a control tower which is the pinnacle of supply chain visibility is fairly unrealistic. As a decision maker in a supply chain, it is more important to have access to the right information and pay less attention to information that you might not be able to act upon, or the information that could lead you astray.
ByBox has its own software, Thinventory™ to offer you visibility in your supply chain. Want to find out more? Get in touch by filling in your details at the bottom of this page!