10 Reasons to Build a Supply Chain Control Tower (Part 1)
(Today, we now operate in an increasingly globalised environment. Not only are we challenged by longer lead times, market volatility and continuous fluctuations in consumer demand, but we are faced with incessant pressure to increase our responsiveness and deliver a level of service which ultimately exceeds our customer’s expectations. In current times, timing is now everything. We must act fast. We must identify problems sooner. And we must gain greater understanding into the fundamental drivers causing issues.
Yet how are we able to overcome such issues when we have no consistent view of our supply chain? How can we optimise efficiency, ensure integration and identify fundamental drivers or causes of performance levels when we lack the visibility needed to monitor our supply chains from supplier to consumer? Such questions are examples of the many issues faced by firms across all industries. According to a recent survey conducted by Gartner, 85% of respondents confirmed that supply chain complexity is now a significant and ever growing challenge facing their organisations. Arguably, this statistic emphasises the increasing need for businesses to evolve, the requirement for businesses to invest in new infrastructure and importance of rebuilding existing planning and execution processes in order to effectively compete on a global level.
Arguably, the Supply Chain Control Tower is the solution to many of the problems encountered within organisations. The central hub has the technology, data capacity and processes needed to enhance visibility for both short and long term decision making, ensures collaboration and integration throughout the supply chain, and boosts costs efficiency and customer service levels enabling firms to seek competitive advantage over their competitors. Yet, why is this the case? What does the Control Tower offer that current business software and technology does not? Throughout this blog series, we will seek to shed light on this tool by exploring the top 10 reasons as to why the SAP Control Tower may be the answer to many supply chain prayers put forward by businesses across the world.
1. Identify Issues Before They Arise
Why fix problems that have already arisen when you can prevent problems before they occur?
Within many organisations, supply chain executives only tend to be called to the table when something fails within their operations and business processes. Due to their inability to predict and identify forthcoming issues before they arise, companies are often left to firefight their way out of issues encountered and are required to invest considerable amounts of time, financial resources and effort into restoring stability within their supply chain.
Yet with the Control Tower’s predictive capabilities, businesses are able to operate in the future not the past by reacting to unforeseen events with unprecedented agility. As the device enables users to gain a greater understanding into products moving through their business channels, organisations are able to more effectively predict, control and monitor their operations. For example, the Control Tower allows businesses to be more responsive to spikes in demand and future supply chain shortages which are yet to arise. Organisations can therefore recognise such issues and take action, i.e. by re-balancing Inventory or by increasing the production volume in order to ensure that goods remain on the shelves, profits are maximised and high customer service levels are upheld.
2. Recapture Control of Your Outsourced Supply Chain
In current times, the complexities present within our businesses are largely a result of our outsourced globalised supply chains. Whilst previously we have sought to focus upon the positive implications of outsourcing, it now seems that in many cases that outsourcing often results in crucial data residing outside the four walls of our businesses.
For example, let’s take a look at the high-tech industry. It’s now hard to say how many suppliers are really involved in the production of the iPhone 6 due to the vast array of items needed to produce such a device and as a result we lack key information surrounding our supply chain processes. Without such data, how can we ensure that such products will be delivered on time? How many products should we produce in case of shortages? How can we rapidly respond to changes in customer demand?
Through the utilization of the Control Tower, such issues are overcome as the device enables businesses to gain multi-tier visibility from the initial supplier to the end consumer. By integrating all partiers within the supply chain together through multiple touch points, structures and practices, businesses are able to directly contact customers, regulators and stakeholders in order to obtain key information. No longer is distance a barrier restricting communication between businesses and crucial parties, as The Control Tower breaks down such boundaries through creating a new network for all parties to collaborate and therefore enables businesses gain direct contact with customers within seconds and minutes, as opposed to hours and days.
3. Obtain the Agility Factor
Within every industry, only few companies are able to show superior and consistent profitability relative to their peers. Those that do seem to share one common trait: they have the ability to respond to external events, a dynamic capability to plan and strong competencies to execute new courses of action. They have the agility factor.
In current business environments, firms are often held back by their own incapacity to turn quickly and respond to changes when the competitive landscape changes. Whilst many individuals within such businesses often seek to firefight and solve the issues faced, often individuals are unaligned and do not effectively collaborate with one another to solve the issue encountered in the most effective way. Businesses are therefore often held back by their own inertia and their incapability to turn quickly when the competitive landscape changes.
Arguably, the Control Tower enables companies to enhance their relative status in a way that companies have previously been unable to. For example, the Control Tower’s Smart Alert and Exception Management capabilities alerts businesses when an important issue arises, or when an exception occurs within the supply chain. Not only does such tool therefore overcome the problem of big data, by identifying issues on behalf of the company saving both time and energy, but it enables businesses to react to changes as soon as they arise, in order to maximise organisational performance and meet customer. With such device businesses are no longer held back by their own inertia as the Tower supports key players by enabling them to maintain and enhance their relative advantage in ways that their rivals fail to see or do not fully implement.
To be continued