September 27, 2023
2
min. read
Orchestration Control Tower: From Reactive Management to Proactive Control
The Need for a Supply Chain Orchestration Control Tower
The global economy requires effective management of global supply chains, involving numerous stakeholders, processes, assets, and a vast amount of information. In this scenario, competition involves establishing and sustaining a supply chain that is agile, adaptable, and well-coordinated.1 All this requires breaking down organizational silos and increasing cross-functional collaboration. However, the reality is very different since the technology that helps connect these silos is still missing.
This dynamic alignment and agility require visibility and responsiveness, which means the same level of information at anytime available to all decision makers and quick or automated ways to (re)-act according to that information.2 Additionally, supply chain managers face a constant key challenge: the risks associated with the uncertainty of supply and demand, that is the difficulty of accurate forecasting, followed by potential overstocking or under-stocking and increased lead times due to disruptions. These uncertainties lead to operational inefficiencies, increased costs, and customer dissatisfaction.
Therefore, all global companies across various industries and sectors share the following common needs:
- Supply Chain Monitoring: To accurately forecast customer demand, optimize inventory levels, minimize under-stocking (or overstocking), ultimately improving customer satisfaction. Visibility is the first step to proactive monitoring and automation.
- Control Mechanisms: To consistently monitor every aspect of the supply chain process and act accordingly. Control enables the execution of supply chain management strategies.
- Data-driven Actions: To improve overall profitability and allocate resources efficiently while maintaining competitiveness in the market. An efficient supply chain is the backbone of a successful business.
As a result, companies are shifting their focus towards building advanced monitoring capabilities, which go beyond real-time visibility, and easy control mechanisms, which allow data centralization for a comprehensive view of the entire supply chain and enable data-driven actions to unlock value.
The solution to these challenges & needs and the result of this shift is a Supply Chain Orchestration Control Tower.
It represents the combination of human expertise, streamlined processes, robust data management, organizational alignment, and cutting-edge technology. Its primary aim is to elevate visibility and control, enhance coordination, and improve decision-making for supply chain professionals. Its role is versatile, catering to specific use cases across different domains within the supply chain. To harness its full potential, an Orchestration Control Tower (OCT) should be leveraged as an analytics-driven, decision-making tool. It should not be confined to a mere extensive visual dashboard but should extend its utility to guiding strategic choices, execute on them, and help business leaders make long-term decisions and guide short-term reactions on any potential disruption within their supply chain network and ecosystem. However, in the market, there is substantial confusion regarding its true essence and the benefits that a control tower offers to organizations. To clear up this confusion, leaders in supply chain management should delve into the intrinsic capabilities of an OCT, rather than fixating solely on its technological aspect.
Furthermore, Christian Titze, VP Analyst at Gartner, claims, “A supply chain control tower is not a stand-alone SCM application, but an integrated capability embedded in a broader SCM suite or tool. It could be an intelligent data platform providing use-case specific insights, predictions, and suggestions”. Therefore, an important feature of good control towers is their ability to integrate with the existing ecosystem seamlessly. (This blog post examines the issues stemming from difficult and lengthy integrations with the existing ecosystem)
The Orchestration Control Tower v/s traditional SCM Processes
Traditional supply chain management (SCM) processes have long relied on a sequential and siloed approach to handling the various aspects of a supply chain. These traditional methods involve individual departments or functions working in isolation, often leading to inefficiencies, delays, and a lack of visibility insights across the entire supply chain. The focus is primarily on cost reduction and optimization within individual segments, which can sometimes result in suboptimal overall performance.
On the other hand, the concept of a supply chain Orchestration Control Tower represents a significant shift in how supply chains are managed. The OCT acts as a centralized hub that provides real-time visibility insights and control over the entire supply chain ecosystem. This approach requires a holistic view, breaking down the barriers between different functions, partners, and processes. It enables organizations to proactively respond to disruptions, optimize resources, and enhance collaboration among various stakeholders.
Furthermore, the key difference lies in agility and adaptability. Traditional SCM processes tend to be rigid and reactive, while supply chain OCT empower organizations to be more agile, adaptive, and responsive to changing market dynamics. They offer a comprehensive view of the entire supply chain. This enables quicker and data-driven decision-making, improved risk management, and ultimately, a competitive edge in today's fast-paced global business landscape.
Summary: Advantages of OCTs
- From Real-time Visibility to Enhanced Monitoring and Control: Track the movement of goods, monitor inventory levels, and assess the performance of various processes at any given moment allowing for proactive decision-making, quicker response to disruptions, and effective supply chain management.
- Improved data-driven Decision-making and Agility: Adjust operations swiftly, optimize routes, and allocate resources efficiently based on real-time data. Read the case study to understand how Logward helped a global chemical producer gain control and save costs through a Supply Chain Control Tower setup.
- Seamless Collaboration and Coordination with Standardization in one Place: Bring together suppliers, manufacturers, logistics partners, and other key players, ensuring that everyone is on the same page regarding inventory levels, demand forecasts, and delivery schedules. The value here is that one system and one process are being managed in a way that is standard across the supply chain.3
- Strategic Risk Management and more Resilience: Identify potential risks early on, implement contingency plans, and mitigate the impact of disruptions.
In conclusion, a supply chain Orchestration Control Tower provides a holistic view of the entire supply chain, enabling proactive decision-making through historical data analysis, predictive insights, and optimization recommendations. It provides monitoring and control capabilities beyond mere visibility, streamlined collaboration, standardization, and improved risk management. As a result, supply chain professionals build more efficient, agile, and resilient supply chains.
References
1 - Gattorna J. (2008): The Triple –a Supply Chain Revised. “Supply Chain Asia” November-December, pp. 38-41.
2 - Lee H.L. (2004): The Triple –a Supply Chain.“Harvard Business Review”, Vol. 82(10), pp. 102-112.
3 - Greene M., Caragher N. (2015): Supply Chain Control Tower: Providing GreaterVisibility, Flexibility and Efficiency. “Logistics Viewpoints” 17th September, https://logisticsviewpoints.com/2015/09/17/supply-chain-control-tower-providing-greater-visibility-flexibility-and-efficiency/ (accessed: 10.05.2016)
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