By now, most of us realize that supply chain volatility–in one form or another–is here to stay. As supply chains become more complex, next-generation supply planning will be integral in building supply chains that can sense and respond to disruptions in real-time. Control tower capabilities will be critical in helping businesses turn data into insights that inform decision-making. While it’s essential to realize the term control tower can have different meanings depending on the industry, from a supply chain perspective, most organizations use control towers to manage, predict, and respond to disruptions.
Control towers are composed of four major components:
- an organizational construct
- a system to collect and analyze data, sense disruptions, run scenarios, and make decisions
- a decision framework and business roles for how control towers respond
- a reporting mechanism to communicate actions taken and how to monitor results going forward
“A control tower is that bridge between what your plan was and what your execution is so that you can accelerate an effective response to both internal and external disruptions,” says Katherine Ross, Former President of Health Care Services at Johnson & Johnson. “You really can’t do a control tower with just one of those things; you have to put the whole package together to get the impact.”
Katherine, along with o9’s Vice President, Industry Solutions, Brent Hasenkamp, and Life Sciences Lead, Vijay Mohan, discussed the role modern control towers are playing in helping organizations to navigate volatility.
Here are three key takeaways from the conversation.
Control towers are in demand due to an influx of data
Twenty years ago, control towers were viewed as catalysts to take planning to the next level. In today’s world, control towers are essential for companies to respond proactively to supply chain disruptions. Three factors have influenced this shift: an increased volume of data generated, an increased ability to process data, and cloud computing combined with increased computing power.
“In the past, we had the vision of a control tower, but it was challenging to implement since the data was within the local enterprise along with complex integration challenges,” says Vijay. “Whereas now, cloud computing has been really a game-changer and given the opportunity to connect across the enterprise and network (internal and external) more seamlessly.”
Next-generation control towers are leveraging more AI and ML capabilities to predict and proactively answer the critical questions around a scenario's likelihood of happening and what actions an organization must take in anticipation.
Envision the end result before implementing
Before introducing control tower technology into an organization, it’s beneficial to plan out an organization’s specific operational needs from a people, process, and technology perspective. Each organization–and each industry–will face different challenges that a control tower can help solve. When implementing a control tower, a critical stage is envisioning the end-to-end process and outlining the transformation roadmap that focuses on critical areas impacting the particular organization e.g., customer service, planning, inventory management, manufacturing, and finance. The next step is connecting partners within the organization’s network. The final phase focuses on gaining visibility, not only to solve short-term constraints but also to achieve synchronicity across the organization.
“The control tower is a layer that sits on top of everything, where it can connect the data at that level providing the end-to-end visibility, which is critical. Then it's able to help you drive through the decisions, which is a critical thing where you don’t need to wait five years for this big transformation; you can still be on top of it,” says Vijay.
Understand the breadth a control tower will need to capture
In terms of organizational considerations, it’s critical to determine the functional breadth that will need to be achieved and if any tradeoffs need to be considered. For example, a control tower with greater cross-functionality can have a more significant impact on the organization. Still, it will take longer to implement because more teams will need to be trained to understand the new decision framework. In addition, organizations need to consider the breadth of the ecosystem, geography, and business line. Katherine also points out that when an organization is implementing new technology or capability like a control tower, it’s essential to start incrementally with one area, demonstrate the value and results to the rest of the organization and then build momentum to implement across other facets of the organization. Establishing a decision framework aligned with the key stakeholders and the overarching governance must be considered.
“You have four dimensions of breadth… you want your control tower to be able to make broad decisions for the business,” Katherine says. “But it’s critical that as you start off to implement, you don’t bite off the entire range of opportunities because it’s much harder to get going.
Overall, implementing a control tower can help organizations better sense and manage disruptions more proactively, but it can also help facilitate a more proactive culture that can have a significant effect across the organization.
“Building a culture not just within the control tower, but also within the broader organization for really high impact… very rapid response to disruptions in control so that you shift your organization out of analysis paralysis, towards recognizing that there is a subset of the disruptions that happen to your business that are repeatable, and you can either build an AI response or establish processes and frameworks that allow your organization to just be much faster,” Katherine says.
In a closing thought, organizations must consider the control tower a key enabler of the digital operating model. Organizations can realize the immediate benefit of a control tower that enables the critical end-to-end view of the operations, establishes the feedback loop between execution to the planning layer, and allows organizations to better sense and respond to risks and opportunities in real-time.
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About the author
o9 SolutionsThe Digital Brain Platform
o9 offers a leading AI-powered Planning, Analytics & Data platform called the Digital Brain that helps companies across industry verticals transform traditionally slow and siloed planning into smart, integrated and intelligent planning and decision making across the core supply chain, commercial and P&L functions. With o9’s Digital Brain platform, companies are able to achieve game-changing improvements in quality of data, ability to detect demand and supply risks and opportunities earlier, forecast demand more accurately, evaluate what-if scenarios in real time, match demand and supply intelligently and drive alignment and collaboration across customers, internal stakeholders and suppliers around the integrated supply chain and commercial plans and decisions. Supported by a global ecosystem of partners, o9’s innovative delivery methodology helps companies achieve quick impact in customer service, inventory levels, resource utilization, as well as ESG and financial KPIs—while enabling a long-term, sustainable transformation of their end-to-end planning and decision-making capabilities.