The APAC region is home to some of the most complex global supply chains. Over the past two years, manufacturing and logistics disruptions and increased consumer demand have resulted in significant delays, shortages, and product price inflation across the globe.
This situation exposes global supply chain weaknesses and showcases the necessity to build resilient supply chains that can better handle disruptions.
Control towers can be a viable solution to help businesses achieve more resilient supply chains. Control towers are a combination of data access and technology to assess and interpret information and enable response scenarios via planning processes. This can give supply chain planners greater visibility into critical internal and external data that ultimately helps them respond more proactively to supply chain volatility, solve problems faster, and improve existing processes that move businesses forward.
Control towers enable companies to:
- Sense and respond to disruptions
- Analyze supply chain constraints and proactively manage issues that arise
- Incorporate end-to-end visibility across the planning process
o9’s Schalk de Klerk and Quirin Regensburger spoke with Steve Bradley, Former CIO Woolworths Group and advisor to Walmart; Sanjay Kurup, Senior Director-Medical Segment Delivery Lead and Portfolio Management, APAC, Johnson & Johnson; and Jochum Reuter, Vice President Strategic Alliances, FourKites to learn more about how control towers can benefit supply chain planning and execution in APAC and across the globe.
Control towers provide real-time visibility
Control towers can pull data and information in real-time, allowing companies to make decisions or adjust plans with full visibility into current scenarios. For example, companies can track shipments and address any delays or disruptions for their customers and vendors based on real-time logistics information. A long-term benefit is improving communication and collaboration with suppliers and customers. “If you and your peers up and downstream connect the visibility of your lanes, this can orchestrate quick and easy adaptation in the supply chains. An example is when a ship got stuck in the Suez Canal. A large manufacturer in Europe was able to inform its retail locations exactly which goods would be delayed for delivery within hours after the incident. This was all because their supplier had specific items stuck on that ship and was sharing its ETA information with the manufacturer,” says Jochum Reuter. “That’s the kind of information we receive and use to inform all stakeholders.”
A control tower can help a plan adjust for real-life scenarios
No matter how well a company develops a plan, reality will deviate from that plan. Many also want to use their supply chains more efficiently. This could mean holding increased levels of utilization assets, having less safety stock, and having less slack in the system, which means companies have to respond quickly to any plan deviations. Companies can respond to deviations in three ways, according to Steve Bradley. The first is to use a control tower to look for potential disruptions at a particular node and make changes in real-time. The next level of complexity is to use a control tower’s features to optimize asset performance. The third level of complexity is to optimize the full supply chain. “I’m keen to see that what’s happening more and more is the opportunity to make adjustments which are in the interest of the full supply chain, not just the node that is experiencing a problem,” Steve says.
Control towers can also enhance sales and operations execution
In addition to supply chain optimization, a control tower can also bring full visibility into the S&OE process. Companies should start with understanding their main value driver and using a control tower to gain full visibility to help guide how scenarios are built to optimize the supply chain to align with a business’ value drivers. If companies look at an end-to-end situation—from a control tower perspective—the real value is visibility from manufacturing upstream to the customer downstream. Having visibility into the whole spectrum, data availability, allows planners to push scenarios that start to make a response mechanism, which is a much more proactive approach.
In conclusion, control towers can help companies in the APAC region and beyond optimize their supply chains and respond more proactively to potential disruptions. One of the biggest takeaways from the conversation was how control towers could help companies remove siloed decision-making and find new ways of working. Companies may find that the visibility provided by a control tower potentially cuts across existing responsibilities, KPIs, and initiatives. Companies may have to be prepared to progressively work through those issues and adjust as needed to realign with the company’s vision.
“From a change management point, there are structural questions that are important to get people aligned for the need and what the vision is,” Steve says. “A lot of work needs to go into, ‘Why is it that we need to do this to be competitive in the marketplace?’ and ‘Where is it that we’re aspiring to get to?’ that are expressed in terms that people can latch on to as a vision for the future.”