A Short Guide for Supply Chain Control Towers: Definition, Importance, and Types
Supply chain control towers play an extremely important role in ensuring that the supply chain remains resilient and robust even in times of crisis. They act as data collection and distribution hubs and provide real-time analytics which helps in sorting out logistical constraints and time lags, thereby smoothening delivery processes. There are three primary types of control towers- inventory, logistics, and supply assurance- which perform specific functions to relieve the burden.
The Covid-19 pandemic underscored the importance of resilient supply chains and robust logistic support. These two factors are vital for the thriving of any sector- be it a primary sector including agricultural activities, manufacturing sector, or service sector. Though there is a rising trend of protectionism around the globe, market experts point out that this is a temporary phenomenon and that the global supply chain will become increasingly indispensable in the coming period. In such a scenario, avoiding the kind of disruptions faced during the pandemic becomes extremely important; resilient and robust supply chains which can deliver products and services stress-free and without any time lag are, therefore, a must. Supply chain control towers ensure exactly that.
What are Supply Chain Control Towers and Why are they Needed?
Supply chain control towers are cloud-based solutions that aim to provide end-to-end visibility between different business and trade partners, trading countries, etc. Control towers also act as data collection and distribution hubs, while simultaneously improving the visibility between different modes of transportation. However, this shouldn’t be confused with logistics control, as it doesn’t control the production, storage, or distribution of goods and items.
Supply chain control towers essentially collect data related to the operations a business is handling, organizes it, and then distribute it to all the concerned stakeholders in a coherent format. Thus, these towers provide businesses, trade partners, and logistics management companies with real-time analytics and other important insights to remove the hurdles in the supply chain.
Supply chain control towers have become extremely crucial in today’s world, as they help in achieving end-to-end visibility even in such supply chains which have multiple stakeholders and complex functions. These towers work on the principle of a collaborative sharing model which helps all stakeholders get important information such as freight movements without any delay or hassle. This increases the overall productivity of the entire supply chain by reducing expediting costs and delivering goods and services on time. Increased productivity of the supply chain, in turn, connects more and more businesses, thus further increasing profitability.
Types of Supply Chain Control Towers
The global control tower market has advanced to such a stage that different types of control towers handle different workloads to relieve the burden off the supply chain. Some of these types are discussed below:
- Inventory control towers
The primary function of inventory control towers is to provide alerts and insights regarding shortages, imbalances, and stockouts to manage inventory in a more orderly fashion. In some cases, it has been seen that inventory towers have helped in reducing as much as 90% of the problems related to shortages and stockouts. This has also resulted in increasing the inventory turnover by a large margin.
- Logistics control towers
As the name suggests, these supply chain control towers handle issues and challenges that are encountered in the logistics department of the supply chain. These towers offer real-time analytics regarding inbound and outbound logistics such as delivery time of goods and services, advanced shipping notification, etc. These logistical insights help in improving the overall on-time delivery rate. In the long run, this translates into reducing the cost of business operations, thereby ensuring profit maximization for the company.
- Supply assurance towers
Supply assurance towers fulfil a specific need of ensuring a quality and consistent supply of goods and services to the intended recipient. Moreover, these towers also help in tying up suppliers, logistical teams, inventory, and sales teams together to ensure a smooth flow of processes. This integration of various stakeholders helps in ensuring that the customer receives the order correctly and on time.
The Bottom Line
A look at supply chain control towers shows that they ‘oil the wheels of global supply chains which essentially act as gateways for global trade. Their role was particularly crucial during the pandemic especially for manufacturing, storing, and distributing the Covid-19 vaccines across the world. Also, there has been a growing collaboration between advanced technologies like Artificial Intelligence and these cloud-based solutions to introduce autonomous decision-making and reduce the scope of human error.
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