Which Control Tower is right for your supply chain?
Congratulations! You’ve decided to invest in a control tower for your supply chain.
You’ve read all the research that says visibility is key to making your operations smoother and more profitable. You understand how integrated logistics, incorporating a control tower could improve reliability and customer satisfaction. And you’ve made a compelling argument that your business needs one and your superiors are on board. So what now?
As with any major investment, the next step is a clear-eyed assessment of your business needs, and some serious thought about what type of control tower would work best. Here are a few key questions to ask:
1. Action or Analysis?
At the risk of oversimplifying, a control tower does two things: it collects and analyses data and it manages the performance of logistics operations. In many cases it does both. A focus on data will allow for better future decision making. But one of the great advantages of a control tower is the ability to make cost-saving real-time decisions based on that data. And doing so requires the capacity to oversee operations. So what will your control tower focus on, and does that align with your business objectives?
2. What are its key capabilities?
If you buy a computer, it is often best to decide what applications you will use, and then buy a system that can handle them. As far as integrated logistics is concerned, setting up a control tower is in many ways similar. It is best to decide what you want the control tower to do, and then design a system to match.
The best control towers can handle a wide range of tasks. They might manage orders, inventory, transport booking, duties, customs and invoicing. They can also collect and analyse data to help with future needs. Every business is unique, and yours might need all, or just some of them. It only makes sense to match these capabilities with your needs.
On the other hand, it is always possible that innovations will come along in a few years. So it is important that your decisions don’t create a system that is inflexible and can’t adapt to new opportunities.
Different industries have different requirements. A toy-maker is likely to have very different needs than a pharmaceutical company, a medical device business or a semiconductor manufacturer. Similarly, different countries will have different needs too, often dictated by regulatory and governance considerations.
A control tower can be extremely valuable to businesses in highly technical or tightly regulated industries. But of course, the devil is in the detail, and if your company is in one of those industries, it’s important to think about exactly how the control tower might best serve your company’s needs.
4. Lifespan and transitions
Commissioning and implementing a control tower is without doubt a significant undertaking and can mean big changes for your business. There is no reason to make it any harder than it needs to be. So, consider the transition.
What happens while you set it up? Can your partner organisations help to minimise the disruption to both you and your customers? How well will the control tower integrate with your existing systems? Will it be able to accommodate future technological advances?
5. In house or outsourced?
One of the biggest perceived risks associated with outsourcing is that businesses lose control of their supply chains because they cede too much control to other parties.
So, it might seem a little ironic to solve this problem with more outsourcing.
And yet, there are compelling reasons to partner up. In fact, they are probably the same reasons your business started outsourcing to begin with: someone else can do it better or cheaper, and you can’t justify the added expense and effort of doing it yourself.
In some rare cases, a supply chain is so niche that it might make sense for a company to build their own control tower, so they can take advantage of ultra-specialised institutional knowledge.
And some businesses might simply be a little hesitant to place huge amounts of data in the hands of a third party. Except the majority of these same businesses are effectively doing just that as they migrate more and more of their systems to the cloud.
The bottom line
At the end of the day, it is a strategic decision to invest in a control tower and one that should be considered thoroughly and a proper assessment made. Careful due diligence, mutual trust and respect, strong commitment, and open communication are key. It has to be the right decision for the business. But with more options becoming available all the time, there should be something to suit everyone.
And the best integrated logistics solution will always come with a supplier who will talk you through all the options to ensure you make the decision that is right for you and your organisation.
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