With the current rapid base of business and the growing complexity of global based supply chains, many companies are beginning to re-define the needs for broader visibility, more timely decision-making and predictive process capabilities regarding supply chain business processes. These needs are more frequently being expressed in the context of supply chain control tower (SCCT) capabilities. Our goal in 2012 is to provide more reader education reflecting on this new evolving area of interest.
In this context, Supply Chain Matters thought it would be great idea to conduct interviews reflecting on the different current perspectives of SCCT today. Our goal is to include technology and service providers, as well as functional experts closest to this area. To kick off this series, we conducted an interchange with Infosys senior consultants regarding current trends in this area.
Participants and prime contributors in the responses were:
Gopi Krishnan GR, Practice Manager – Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
Arun Kumar, Principal Consultant – Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
We thank both Gopi and Arun for their participation and thought exchange and we believe our readers will benefit from these perspectives.
Question 1: In your travels, have you observed supply chain and IT executives seeking more information and education on supply chain control tower concepts?
The terminologies around this concept are still crystallizing, but the need is certainly there. Some call it Control Tower, some others name it Operations Center, some others prefer the term Command Center, regardless of the terms used, the need is certainly felt for some kind of overarching approach to get a hold on end-to-end supply chain visibility and control.
What makes supply chain the best candidate for creation of a Supply Chain Control Tower (SCCT) is the incredible heterogeneity in terms of business functions (eg) Demand Planning, Procurement, Transportation, Warehousing etc., exponentially growing to the sub-functions (load planning, route planning, carrier selection, rate calculation engines etc. with Transportation) further exponentially growing to the IT applications (various packages and custom apps) and the data entities owned/managed by these apps.
This multi-tier complexity directly prevents any kind of unified visibility directly impacting the speed of decision making taking. Converting the islands of data to some kind of actionable insight is at the core of the need for an SCCT.
Where this is still nebulous is in the definition of what exactly constitutes a tower and what levels of granularity/aggregation of information is possible. This means devising suitable cross-functional metrics, aggregating data near real-time and designing dashboards that extend beyond mere alerting capabilities. Incidentally, while intra-organizational and cross-functional metrics are a good start, we believe that the true value of an SCCT would be unleashed once it transcends organizational boundaries.
In short, an SCCT can span from alert management (more commonly known as SCEM or supply chain event management) all the way to an aggregator of information across a complex supply chain, spanning multiple organizations, thus enabling better actionable insight for the entities that hold larger balance of power within those supply chains.
Are current interest levels coming mainly from the IT, supply chain functional, or both?
We see interest from both the IT & functional areas.
Functional teams obviously benefit from better visibility and enhanced alerting mechanisms. Hence it comes as no surprise to us that they are strong advocates of the supply chain control tower. This also frees them up from the need to span across multiple applications (sometimes for the same function) while being able to gain the right insights and act upon them as things happen.
IT teams see the control tower as being beneficial in a different way. Until now, IT departments followed the ‘get common systems and platforms first before deriving insight’ approach. The rationale was that common systems and platforms aid the capture of data in standard formats and make it easy to infer. But it has been well-established that getting on to common systems is a never ending journey. Hence IT teams look at SCCT as an evolutionary platform for aggregating information from multiple sources in a disciplined and cost effective manner. With cloud adoption increasingly being a reality, platform standardization might be an easier option from a change management perspective compared to sun-setting multiple applications. Provided the new platforms become mobile and social-enabled, business teams should be ready to onboard themselves.
Question 2: Is the current interest level coming from specific industry sectors?
It is fair to assume that more the complexity, the greater the need for an SCCT.
One of the dimensions to evaluate complexity is the geographical spread of the supply chain. Hence supply chains that involve geographical diversity will benefit (Hi-Tech Manufacturing & Electronics). Similarly, variances can exist in terms of application landscape, business function, typical span of order life cycles or even the complexity of the supply chain in terms of the number of actors performing an end-to-end integration function.
Of late, the roles of the principal players in the supply chain (with reference to relative supply chain power) and underlying systems in a supply chain have also contributed to the interest, Retail being a good example. In the past, retailers ordered inventory from suppliers, received them into warehouses, moved inventory to stores and completed sales transactions with customers who walked into these stores. But today’s omni-channel approach has greatly expanded the role of the principal players. Today’s customers can place an order via the web, kiosk or call center. The retailer needs to look at inventory across the all fulfillment nodes to determine the best fulfillment approach. In some instances, the retailer may choose to drop-ship items directly from suppliers. It is likely that the organization engages in 3PLs to facilitate a wider reach. Last minute emergencies may result in delayed shipments, unplanned back orders or damaged goods. In addition, customers now expect that the retailer keeps them informed on the progress and status of the order at all times.
All of this mandates the collection and assimilation of information in near real-time across customer service, warehousing, 3PL, transportation and procurement teams. The information resides in a diverse application landscape (legacy, package, custom etc) with communication occurring in multiple formats (portals, EDI, XML, flat files, email etc). Terrific opportunities exist for an SCCT concept in such a scenario.
This concludes part one of our dialogues on SCCT readiness. In part two, we pose two additional questions regarding how such needs are being communicated by functional teams as well as Infosys advice on how to best approach the deployment of SCCT.
Disclosure: Infosys is one of three other named sponsors of the Supply Chain Matters blog.