What is a Control Tower for Supply Chains?
A control tower for supply chains is a central hub with the required technology, organization and processes to capture and use transportation data to provide enhanced visibility for short- and long-term decision-making aligned with strategic objectives. When you add optimization functionality to a control tower, better decisions and improved efficiency and/or service are within reach.
Why optimize the supply chain with a Control Tower?
Control towers in general support the following essential needs for managing supply chains:
- Provide end-to-end supply chain visibility
- Respond and adapt to supply chain disruptions
- Deliver multi-tier process orchestration and supply chain collaboration
- Maximize predictive decision-making and dynamic supply chain execution
Motives for using a control tower vary among companies and industries, e.g.:
- Centralized decision-making in CPG
- Supply chain collaboration in manufacturing
- Transparency in retail distribution
How do you optimize the supply chain with a Control Tower?
In transportation, a control tower can solve these needs for visibility and collaboration at different levels of control. The main application areas for control tower solutions are at level 3, 4 or 5 of the levels listed below.
- Personal Level: the individual within a company is a natural starting point, but offers limited benefits
- Team Level: e.g. a location or division allows synergy for transportation planning within a team, such as more combinations of inbound and outbound or pickup and delivery
- Company Level: one central platform within the company for optimization and visibility at different locations. This means complete optimization across all transportation divisions within the company e.g. over multiple depots, or by exchanging employees across teams
- Supply Chain Level: involves customers, sub-contractors/agencies and suppliers. This can be purely for information purposes, but can also involve them working on the system, achieving supply chain optimization across multiple companies e.g. with sub-contractors, identifying the most attractive options from their perspective
- Cross-Supply Chain Level: the final level is to have a control tower across multiple supply chains. From a theoretical point of view, this is the ultimate way of working, but from a practical point of view it is challenging: horizontal cooperation rules are required for fair profit-sharing, for what information is allowed and necessary for proper optimization and whether a third (central) party is involved in the execution
By adding optimization there are various opportunities, e.g.:
- to construct better centralized plans in advance
- to re-optimize and reschedule the plan during execution, e.g., by presenting proposals for the best alternatives or to continuously recompute the ETA
- to respect all dependencies and restrictions during any scheduling calculations, supporting all complex logistic concepts
What are the results of optimizing a supply chain by using a Control Tower?
The main benefits of optimizing a supply chain by using a control tower, are:
- Centralized data and optimization functions
- Real-time visibility, transparency and overview
- Generated dynamic optimization power
Thanks to the Control Tower with optimization capabilities, companies can achieve:
- An increase in required deliveries without the vehicle requirement increasing accordingly
- Better insight into creating pick stage plans which greatly increase the accuracy and floor utilization
- Better route build and trailer utilization
- Reduction in km/mileage travelled
- Reduction in fuel costs and CO2 emissions,
- Improved communication and management overview
- Impressive cost savings within a short period
Why contact ORTEC to create or optimize a Control Tower?
ORTEC has created a transportation control tower to both visualize supply chains from end-to-end and optimize all aspects of transportation. This enables centralized planning and dispatch for all kinds of transportation concepts, but also decentralized visibility and transparency, for example for customers, suppliers and management. This is supported by portals or apps, with real-time information like the current estimated time of arrival. In this way the customer and the supplier can optimize their sections of the supply chain, based on the latest insights. The ORTEC Control Tower solution is implemented at consumer goods companies, retailers and logistics service providers. ORTEC has explored this knowledge in webinars and white papers and at round table events.