GAINING INSIGHT WITH SUPPLY CHAIN

CONTROL TOWERS
In recent years, the COVID-19 pandemic, natural disasters, and global conflicts have led to price
hikes and shortages of key components and materials used in a wide range of consumer and
industrial goods. Labor shortages, product availability, and government regulations were also
among the top causes of supply chain disruption cited in APQC research.
Supply chain control towers provide the end-to-end visibility that organizations need to gain
insight into how each of these variables might impact different stages of their supply chains. A
control tower acts as a centralized hub that brings together people, processes, data, and
technology from the entire network, including different business units, globally dispersed
facilities, suppliers, and contract manufacturing partners.
In this whitepaper, APQC gives guidance on planning and implementing a supply chain control
tower and explores the following topics:

» defining supply chain control towers,

» benefits of a well-planned control tower,
» designing an effective solution that delivers actionable insight to key decision makers,
» implementing and maintaining control tower systems and processes, and
» key takeaways and next steps.

What is a Supply Chain Control Tower?

In order to gain insight into the flow of data as well as materials and potential bottlenecks along
a supply chain, organizations within the ecosystem must act in partnership to share information,
refine processes, and implement governance that works for all entities. A supply chain control
tower refers to the technology that enables end-to-end visibility so that key process owners can
easily view current data to better inform their decisions.
SAP describes data as “the lifeblood of control towers. These systems collect large amounts of
up-to-the-minute data from across the supply chain to provide an accessible, usable 360-degree
view of what’s happening anywhere in your supply chain in real time.”
Supply chain control tower technology is constantly evolving toward increasingly more
advanced automation. Early systems were focused on logistics and inventory management.
Newer systems incorporate Industry 4.0 capabilities. Industry 4.0 refers to the fourth industrial
revolution marked by connectivity between systems and devices to enhance automation
without human involvement. “Smart” systems incorporate artificial intelligence (AI) advances
including machine learning (ML) and deep learning for predictive and prescriptive insights to
deliver what-if scenarios, simulations, and automated alerts about potential disruptions.
When integrated into a holistic control tower strategy, these technologies help break down
silos, so all stakeholders have a single source of truth for supply chain data and transparency
into the current and future state.

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 Why Build a Supply Chain Control Tower?
Prior to the pandemic, supply chain digitization was already a priority for most organizations.
Consider that in 2019, 95 percent of organizations projected that digitization would have a high
to medium impact on supply chains over the next three years, according to APQC research.
Organizations trying to manage effective, efficient supply chains have identified lack of
transparency as a major hurdle. A lack of transparency includes insufficient visibility into
available inventories and shipping delays, for example. And transparency, even into tier two and
tier three suppliers, is becoming increasingly important as more consumers want to see if their
products are being ethically and sustainably sourced. Supply chain control towers remove
barriers to data transparency by integrating multiple systems and tools to enable data sharing
across various sources and partners.
Global instability and economic uncertainty in the years ahead mean more organizations will
need a control tower strategy to build resiliency and meet demand. In the years since the
pandemic began, organizations have faced unprecedented supply chain challenges, which have
led to an increased focus on planning and risk mitigation.
Eighty percent of participants in APQC’s 2023 Supply Chain Challenges and Priorities research
indicated they have modified their supply chain strategy to overcome current challenges in their
network. And nearly 90 percent of them ranked supply chain planning as their top priority for
the coming year. Organizations often struggle to improve their supply chain processes for
several reasons, including staffing shortages, poor internal and external collaboration,
communication challenges, and regulatory hurdles.
This APQC research reveals that many organizations do not have a streamlined, coordinated
process in place to achieve their supply chain goals. When functions are operating
independently without effectively sharing the data and information required to make effective
decisions, they are operating in silos. Symptoms of this disconnect include:

» misaligned goals and measures,

» redundancies or gaps in processes,
» miscommunication or lack of communication,
» suboptimal decisions, and
» lack of coordinated innovation.

Designing an Effective Control Tower: Begin with the

End in Mind
Designing and implementing a supply chain control tower is a long-term undertaking. Effective
planning and design up-front results in a more sustainable solution that will meet the needs of
key users for years to come.

DEFINE THE VISION

Organizations that have implemented successful control towers have employed a phased
approach that begins by engaging with key personnel to define needs and pain points,
collaborating and including all relevant entities across the supply chain, and then aligning on a
vision.

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 Identify Key Players and Pain Points
The first step in building a supply chain control is to establish a common vision that addresses
and balances the highest priority goals for each member of the supply chain network. This
requires that each supply chain partner identify their key players: who owns the relevant
processes and data, and who will make decisions and take action on the insight produced by the
control tower? The data needs of these key players will inform the vision and drive each step of
the planning process and detailed design phase.
As an example, APQC spoke with an organization that conducted workshops with internal and
external parties and identified numerous pain points. Some of the common problems
highlighted in the exercise included:

» limited visibility across the value chain,

» manual and reactive processes,
» gaps in data governance,
» challenges with coordination between regions, and
» pressure to improve service levels while reducing overall supply chain costs.

Collaborate and Communicate

A successful control tower strategy requires organizational buy-in. To accomplish this, it is
important to establish cross-functional teams that collaborate to align on a vision. Internal
teams help resolve conflicting priorities, establish the direction of the strategy, and define the
scope and approach.
Communication is critical during the planning and proof-of-concept phases to ensure everyone’s
needs across the organization are taken into consideration. This is particularly important for
projects with competing priorities among groups. Consider creating a steering committee in
charge of developing a list of issues that need to be addressed and creating a roadmap with
timelines to implement the agreed-upon solutions. Incorporate regularly scheduled meetings
and calls to keep communication ongoing.
Global participation in the early stages of the planning process is important to avoid information
silos and integration challenges that are commonly encountered when organizations launch a
new solution. Globally dispersed organizations can improve the ease of future implementation
phases by including personnel from all regional locations early in the planning process. This also
helps ensure that that the needs of all relevant points of the network were considered from a
global perspective.

Agree on Desired Outcomes

An effective collaboration process results in the creation of an agreed-upon vision for what the
control tower should ultimately accomplish. Common vision statements focus on achieving end-
to-end visibility, predictive and prescriptive insights, risk mitigation, and collaborative
information sharing.
Providing end-to-end visibility is a critical function of any control tower strategy. For some
organizations, this can include transparency into suppliers, planning, production, warehouses,
logistics, distributors, and customers. For example, an organization in APQC’s research identified
several desired outcomes based on stakeholder engagement, including:

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 » creation of a global cloud-based platform;
» a single source of truth for supply chain data;
» visibility from purchase order to finished goods delivery;
» prioritized alerts for material management, inventory, and demand;
» prioritized event response planning based on its impact on the business;
» improved inventory awareness;
» connectivity with suppliers and third parties to enable collaboration; and
» performance monitoring.
Aligning on a vision statement requires a governance structure that provides a voice to all
involved parties to collectively define the vision and strategy for a global control tower. For
effectiveness, organizations can leverage centralized structures with distributed teams or
representatives from the various stakeholders.

SELECT A VENDOR AND PLATFORM

Before engaging with vendors to select a control tower solution, it is important to complete the
prior steps of identifying pain points and establishing a clear vision. Cross-functional teams
should collaborate on what they expect from the platform and communicate these
requirements to interested vendors.
Some key features to consider in technology solutions include:

» artificial intelligence (AI)/machine learning (ML) capabilities to gain real-time insights to

predict potential disruptions and understand downstream impacts,
» “what-if” scenario modeling,
» threat forecasting and alerts,
» demand alerts, and
» dashboards that provide views of critical information such as key performance indicators
(KPIs).
The vendor selection process will vary depending on the type of organization. Agencies involved
in the public sector may need to submit a request for proposal to multiple vendors before
agreeing on a platform. Corporate entities might look across the enterprise to examine what
types of software platforms are already in use and start by contacting existing vendors prior to
requesting quotations from new ones and before settling on a platform.

COLLABORATE TO BALANCE COMPETING NEEDS

The organization will partner with the chosen vendor’s software developers and business
consultants to design and build the solution. The vendor selection and subsequent system
development process must incorporate the needs of all key users via ongoing and transparent
communication between key stakeholders and the software development team.
Many communication and planning tools exist to facilitate collaboration between complex,
multi-entity networks. Third-party or custom planning and collaboration tools allow project
members to access and share background documents, provide input into the technical and
functional system requirements, and ask questions. The solutions vendor can also partner with
the organization to provide a sandbox environment during the requirements gathering phase as
well as the final demonstration phase so that all parties can test-drive the proposed solution.

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 The collaboration tool and sandboxes signal to everyone involved in the process that their needs
and concerns are valued and that the organization will make its technology decisions based on
agreed-upon priorities rather than favoring one part of the supply chain network over another.

DESIGN AND PLAN

Gathering the key requirements and defining the control tower vision will drive the detailed
planning and design phase. The software development team uses these planning artifacts to
propose the platform configuration and user interface that will best meet the functional
requirements.

System Architecture and User Interface Design

As a conceptual model, a system architecture is a formal description and representation of a
system that defines the structure, behavior, and views. It can include system components and
the sub-systems that work together.
An example of a control tower configuration might be a centralized hub that translates and
manages data, which is then distributed to business intelligence and analytics applications,
control tower reporting dashboards, and control tower offices. Team members could use this
output to monitor potential risks and KPIs in real time. The hub might also broadcast to on-site
displays, such as central video walls, where the entire organization can view KPIs.
Another example of a control tower configuration is a cloud-based platform that spans multiple
functions within an organization’s supply chain. It starts with automated connections to raw
materials suppliers, so the supply chain team can receive up-to-date information on inbound
components. The control tower then connects to the planning functions via a planning tool and
then to production, warehouse, logistics, distribution, and customers for true end-to-end
oversight.

Data Management
Another key consideration in the planning phase is master data management to avoid
competing business definitions during the solutions development process. Onboarding new
supply partners is also facilitated when data and policy are clearly defined.

Roadmap
The design and planning phase includes collaboration between key personnel and the solutions
development team to create a detailed roadmap with milestones and timelines. While the
overall planning and development phase should never be rushed, it is also important to manage
the project with a timetable that allows for achievable, visible results.
This type of long-term project is particularly suitable for an Agile development process. Agile
developers work in short sprints to reach incremental milestones. In contrast to the traditional
“waterfall” method of software development, where a solution is developed sequentially and
deployed in its entirety after several months of development, Agile projects are marked by the
ability to quickly shift gears as customer needs and priorities change. This flexibility is
particularly important when a project is phased over several years.
Project planners should prioritize milestones that show profit and cost-savings. One
organization APQC recently spoke to found that by focusing on short, achievable wins, the

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 division was able to continue receiving funding for its control tower, in contrast to other
technology projects within the organization that were not funded during the same time period.

Implementing and Maintaining a Supply Chain

Control Tower
Control tower projects are typically implemented over the course of several years. Maintaining
systems and data is a continuous process. Throughout the project lifecycle, project leaders will
need to consider issues around rollout phases, change management, data management, and
governance.

PHASED APPROACH TO PROJECT ROLLOUT

It is important to remember that deploying a control tower is a process that typically occurs
over several years. The implementation phase of a supply chain control tower should follow a
strategic, step-by-step approach. By instituting a phased approach, organizations can prioritize
projects that deliver the most value to the business first. The ability to show early wins
demonstrates value to key decision makers who are responsible for ensuring the project
receives adequate funding and support.
An effective scenario planning process, for example, allows organizations to model the
implications of various sourcing or shipping decisions in a matter of minutes or hours versus
several days or weeks. Increasing access to actionable data in digestible formats enables faster
decisions across the enterprise regarding inventory availability, production capacity, and other
critical factors that impact supply chain performance.

CHANGE MANAGEMENT
The communication and collaboration that are crucial during the planning and rollout stages
continue to be critical for the ongoing success of the supply chain control tower. Incorporating a
change management methodology facilitates the input of different constituencies into decision-
making and joint visioning in the initial stages. Change management is also a key driver in user
adoption once the system is deployed.
In addition to enlisting cultural influencers to shift supply chain's culture to embrace this digital
change, APQC recommends that organizations manage this change carefully to ensure it is
embraced at all levels. Although managers play an important role in motivating employees to
buy into change, organizations cannot forget to also reward managers for their efforts.

DATA MANAGEMENT AND GOVERNANCE

Multi-entity networks need to institute data management and governance effectively to prevent
silos and allow supply chain partners to share data in a way that provides greater visibility while
also addressing data security concerns. One example would be a Terms of Use (TOU) agreement
that is signed by all entities. A typical TOU might include:

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 » Main body: the overarching legal framework that describes the terms under which entities
can access and use the platform.

» Data Use Rights table: defines user security roles and their corresponding access rights.

» Data Definitions table: clearly defines the categories and classes of data to which the user
security roles give access.
Issues around data management do not end with project rollout. Data maintenance can be
thought of as a drumbeat or cadence that aligns the flow of data with user needs.

Expected Outcomes
An effective control tower will provide organizations with the insight they need to understand
how different functions across their supply chain impact each other. For example, a planner’s
request to expedite shipment of a delayed customer order might conflict with the logistics
team’s goal of reducing operating expenses. Intelligence from the control tower can show the
potential loss of profit versus the cost of expedited shipping.
Control towers provide more than visibility. They also offer the real-time intelligence that
organizations need to change their processes and opportunities to build resiliency through
different sourcing arrangements and contingency plants. Strategically designed dashboards can
help procurement professionals compare planned and incoming shipments against consumption
and inventory, and signal discrepancies between supply plan projections and current stock
levels.

Next Steps
Organizations in the beginning stages of exploring or planning a control tower initiative can start
with the following steps.

» To establish a control tower strategy, organizations need to define the problem, align on a
vision, and establish the desired outcomes. Reach out to stakeholders across the network to
identify their goals and obstacles. Common methods include workshops or surveys with
internal and external parties to identify pain points.

» Globally dispersed enterprises should leverage collaborative tools to engage their

community, including project management, web conferencing, and file-sharing platforms.
Keep employees and partners up to date on progress by providing recordings of meetings,
posting progress on internal websites, and/or creating video updates.
» A key outcome of the collaboration process is the creation of an agreed-upon vision for the
supply chain control tower strategy. APQC has identified several idea management and
innovation approaches that have proven effective for supply chain planning, including
collaborative brainstorming, innovation conferences or workshops, crowdsourcing and
ideation tools, and idea generation wikis. For more information, see Idea Management and
Innovation Approaches for Supply Chain.

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 » Remember that developing a complete control tower solution is a marathon, not a sprint. It
may be helpful to focus on streamlining one key functional area at a time with the long-term
goal of end-to-end visibility and real-time insights. Seek solutions vendors who can bring an
Agile approach, incorporating incremental changes in a time-focused and flexible manner to
stay current with shifting priorities that can occur over long, phased project timelines.

» Do not forget to assign accountability for taking action on the insights or recommendations
surfaced by the control tower. APQC has seen more than one organization invest
significantly in the creation of a control tower only to recognize after it’s built that no one
has been tasked with acting on the results. This omission undermines the value and purpose
of the control tower and impacts the benefits all stakeholders can recognize.

Key Takeaways
Global supply shortages and demands for more traceability mean outdated, siloed approaches
to supply chain data management are no longer sufficient. Control towers leverage technology,
including artificial intelligence and machine learning, to create smart platforms that connect
disparate systems and people across the network from any location.
However, for technology to deliver the connectivity and insights that organizations need for
predictive, responsive, and agile supply chains, an effective control tower strategy is required.
And a high level of coordination prior to implementation improves the odds of success.
Organizations should begin the process by first evaluating their immediate needs and then
develop a phased approach designed to achieve early, measurable wins. Look at the most
impactful pain points, such as non-value creating activities that are leading to inefficiencies and
hidden supply chain problems.
Once implemented, control tower strategies must be continually refined and evaluated to
deliver ongoing benefits. Organizations need to review the flow of data to ensure that it is still
relevant and in alignment with stakeholders’ needs and expectations. Clearly defined
accountability for acting on the results is also vital. Technology alone is not the answer to supply
chain problems. Instead, it is an enabling tool that helps bring people and processes together to
deliver end-to-end visibility.

ABOUT APQC
APQC helps organizations work smarter, faster, and with greater confidence. It is the world’s
foremost authority in benchmarking, best practices, process and performance improvement,
and knowledge management. APQC’s unique structure as a member-based nonprofit makes it a
differentiator in the marketplace. APQC partners with more than 500 member organizations
worldwide in all industries. With more than 40 years of experience, APQC remains the world’s
leader in transforming organizations. Visit us at https://www.apqc.org/, and learn how you can
make best practices your practices.

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