Tag Archives: control tower

Supply Chain Intelligence: Using Your Visibility To Reduce Supply Chain Costs

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If you have followed my writing at all, you already know I am the great advocate of Supply Chain Control Towers. Why, because they provide such great VISIBILITY into the whole supply chain. That easily translates into reduced supply chain costs. Let’s see how!

Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service is a great report from Aberdeen by Bob Heaney and posted by GS1. A survey of global companies shows that Supply Chain Visibility (SCV) is a high priority for improvement and a critical strategy. Supply chain execution and responsiveness require the tight synchronization of supply and demand, as well control of the three flows of commerce (movement of goods, information and funds) across a large number of logistic and trading partners in a wide geographic area.

It requires supply chain visibility which they define as “The awareness of, and control over, specific information related to product orders and physical shipments, including transport and logistics activities, and the status of events and milestones that occur prior to and in-transit.”

Visibility means more than just track and trace. It begs a control tower approach which covers everything from raw material to the delivery to the end customer. A global supply chain can be huge and every member must be in synch. This approach is defined as “A set of integrated processes and technologies that support a seamless flow of product from source to end customer, regardless of global complexity, or sales and logistics preferences of customers.”

SCM Control Tower Start-Up

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We have been gathering a list of issues that need to to be resolved before building a Supply Chain Control Tower: SCM and IT partnership; Visibility; Strategy and expectations; Foundation for the tower; and Team-building. Here’s a recap of what we know, what we need, and where we might go.

SCM and IT partnership
The supply chain functional teams are expecting support from Information Technology. Up to now, many IT organizations have not been heavily involved with a lot of the supply chain; for example, the Procurement system could be a package that is supported directly by the vendor. How about bringing the teams together by emphasizing IT network management skills? IT manages complex wide-area networks using state-of-the-art applications. SCM will rapidly understand that IT brings real value to the party.

Visibility
Scott Koegler wrote about “Combined Data and Visibility”. He pointed out that the number of systems or software applications that make up the supply chain within a single company is likely to be more than 1 and could easily be as many as 20. If that’s the case how is it possible to actually achieve what we’ve been calling visibility? He quickly dispelled the notion that all data for the SCM Control Tower can come in real time from the EDI system. So a conclusion is that the SCM Control Tower will need what is called “middleware”.

Supply Chain Management Control Towers are Amazing Things

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Any business that manufacturers and distributes globally must have end-to-end supply chain visibility today. This means more than just the “four walls” of the factory. It means all your suppliers: the status of their shipments to you and expected delivery. Your shipments to customers. Even the weather and political risks along the route. You must be able to adjust the whole cycle almost in “real time”.

The answer is a Supply Chain Management Control Tower. Our plan is to operate one that will serve multiple companies. It will be “Cloud” based (meaning not limited to a specific computer site). It will offer “Software as a Service” to clients.

We will be using top-of-the-line elements to operate it. IBM software, operations hosted by PROSOFT GROUP (an industry leader), marketing through the National Technology Sales Engine headquartered in Chicago.

A new term is appearing in the supply chain arena: “Supply Chain Control Tower”. Just as an airport control tower coordinates airplanes landing and taking off, a Supply Chain Control Tower coordinates inbound and outbound distribution flows. Sure sounds more professional than a “dashboard”.

Now, who is going to staff the control tower? Logistics was conceived by the military to get the right amount of supplies to the troops at the right time. Supply chain management takes a bigger approach of looking further back into the life of a product to its manufacture and even product design while integrating what were once thought to be unrelated disciplines: marketing and customer service.

Our Supply Chain Control Tower is up and running. Yes, the idea makes a lot of sense, but what are the benefits?
How do we make full use of our resources? What else do we need to add to it? If you take a look at an airport control tower, it usually is a boring place. Yes, they work around the clock but all you see is a super smooth operation. Operators viewing screens and talking calmly into headsets. When it is not “boring”, they usually throw visitors out. Our goal with our SCM Control Tower is to be a “boring” place.

We have been talking a lot about Supply Chain Management Control Towers. Yes, transportation (usually under logistics) is included in the control tower.

In many companies, transportation is outsourced to a 3PL, 4PL or 5PL provider. This provider is an expert at hooking your company up to any required transportation resources. Your provider already has some excellent tools available. A popular concept since the 1990’s has been the “Load Control Center” (LCC). We are looking at outsourcing, but yes, excellent software is available if you do it yourself.

You are in the process of staffing your SCM Control Tower.This group will be drawn from different areas of your company (different “silos”) and different skill sets (for example, a “hazmat” expert). Is your SCM Control Tower going to be a team building melting pot or a boiling cauldron of dis-function? You could draw the brightest and most hard working employees in and outside of your company; but if they don’t get along, it could wreck your business.

A couple of other things you might be interested in:

Supply Chain Control Tower Software

Supply Chain Software

Transportation Control Towers

ImageWe have been talking a lot about Supply Chain Management Control Towers. Yes, transportation (usually under logistics) is included in the control tower. In many companies, transportation is outsourced to a 3PL, 4PL or 5PL provider. This provider is an expert at hooking your company up to any required transportation resources. Your provider already has some excellent tools available. A popular concept since the 1990’s has been the “Load Control Center” (LCC). We are looking at outsourcing, but yes, excellent software is available if you do it yourself.
Transportation has always been an opportunity to centralize and get some benefits. 3M started the concept of Load Control Centers(LCC) and lots of others followed suit. The LCC is simply centralization of transportation planning and execution. Benefits include:

  • better pricing from centralized transportation sourcing
  • development of standardized operating procedures
  • fewer planners than in several separate operations
  • ability to combine more shipments and loads because of greater visibility
  • electronic integration with carriers

Because most companies do not have a lot of the required skill sets, outsourcing brings a lot to the table. But there are some good choices available:

1) Outsource whole thing: Business Process Outsourcing (BPO). Company manages strategically while BPO manages tactically.

2) Outsource with intent to bring back in home.

3) Use consultants in an advisory role.

One of drawbacks of the LCC was building a complete network of electronically-connected trading partners. A lot of time and effort was spent in connecting trading partners. Very difficult connecting partners who, at that time, saw no benefit in the Internet. Any LCC had numerous holes in its visibility. That meant the customer could not completely trust the results. The LCC had to take a fall-back decision to not managing anything but fleet carriers and rail. They had big troubles with small carriers and anything international.

Supply Chain Control Tower Functions

ImageOur Supply Chain Control Tower is up and running. Yes, the idea makes a lot of sense, but what are the benefits? How do we make full use of our resources? What else do we need to add to it?

If you take a look at an airport control tower, it usually is a boring place. Yes, they work around the clock but all you see is a super smooth operation. Operators viewing screens and talking calmly into headsets. When it is not “boring”, they usually throw visitors out. Our goal with our SCM Control Tower is to make it a “boring” place.

Airport towers handle incidents on the ground like failed landing gear. They handle incidents in the air like a “near miss”. They even reach out to other airports: anybody ever sat in an airport waiting for your destination airport to plow its snow, or whatever?


Read more:
http://www.ec-bp.com/index.php/articles/industry-updates/10056-scm-control-tower-functions#ixzz2caqvipnW

 

SCM Control Tower Team Troubles

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You are in the process of staffing your SCM Control Tower. This group will be drawn from different areas of your company (different “silos”) and different skill sets (for example, a “hazmat” expert). Is your SCM Control Tower going to be a team building melting pot or a boiling cauldron of dis-function. You could draw the brightest and most hard working employees in and outside of your company; but if they don’t get along, it could wreck your business.
Jeff Gibson of The Table Group Inc. gave a presentation on 5 team dysfunctions that could spell disaster for any IT department at a recent Gartner Business Intelligence Summit. Substitute “SCM Director” for “CIO” and “supply chain workers” for “IT workers” and these are some really great ideas. Communications can be difficult and must embrace the personal relationship side of the business. If you have an unhealthy organization, it just isn’t going to accomplish the mission. Let’s look at these five dysfunctions and see how they relate to a healthy team culture.