In 2011 Capgemini was the first consulting firm to publish a point of view on Global Supply Chain Control Towers (www.capgemini-consulting.com/global-supply-chain-control-towers). Since then many publications by other consulting firms, research centers, IT solution providers and logistic service providers have been written. The attention for this topic now seems to diminish. The Capgemini Consulting Institute in Munich recently conducted a Supply Chain Management Trend Study in order to investigate the impact of the latest technology trends towards SCM. Recent technology trends for SCM have been positioned on the Hype Cycle (Source: Gartner) indicating the maturity levels of supply chain related trends. According to this study Control Tower solutions are entering the ‘productivity plateau’ of the supply chain hype cycle (see figure 1). Does this positioning on the hype cycle and diminishing publicity means that the hype is now over and Control Tower solutions are mature? This blog answers this question based on proprietary research by Capgemini Consulting.
Figure 1: supply chain hype cycle (source: link)
What is a Control Tower?
We see many different definitions of Supply Chain Control Towers. In our view a Control Tower integrates cross-divisional organizations with system integrated information hubs that provide supply chain visibility. These hubs are used for gathering and distributing information, and allow trained people to use these visibility capabilities to detect and act on risks or opportunities more quickly.
Event management is the core control process of a Control Tower (as shown in figure 2): status info from suppliers and/or logistic service providers is collected, stored in a structured way and used to provide the Control Tower team with info on the actual status of orders, products, inventories and shipments. This information is used to make informed decisions when planning, monitoring and analyzing the supply chain.
Figure 2: set-up of a Supply Chain Control Tower
Control Towers are used to improve the supply chain visibility in ‘complex’ supply chains:
- the scope is global or regional
- the dependency on internal or external suppliers is high
- many activities are outsourced
- and/or service requirements of customers are challenging
In these supply chains, questions about the status of an order, logistic costs of a product, performance of a SC partner, root causes for issues, etc. need to be answered fast and fact-based overseeing the supply chain end-to-end. A Control Tower set-up is the right solution to provide these services and is oriented on inbound, manufacturing, outbound or end-to-end activities. Also, the set-up is either supply or service (spare parts) oriented.
Are Control Tower solutions mature?
Our first assumption is that a Control Tower solution, when mature, will be supported by the majority of solution providers of supply chain visibility software. We researched the websites of more than 20 solution providers (most of them were included in the market survey we published in 2011) and found out that 62% of these providers mention on their website that they support Control Towers. Almost 30% of the providers listed references in this area as well.
Table 1: providers of supply chain visibility software
Our second assumption is that a Control Tower solution, when mature, will be used by the majority of global companies who excel in supply chain performance. To test this assumption, we have analyzed the Gartner Supply chain top 25 list and found out that at least 10 of these companies (Unilever, Procter & Gamble, Samsung Electronics, Cisco, Colgate-Palmolive, Coca-Cola, Walmart, Lenovo Group, Kimberly-Clark and Caterpillar) have a global Control Tower in place. Not surprisingly, most of these companies are manufacturers of consumer products with global (and complex) supply chains.
To summarize: we found out that 62% of the providers of supply chain visibility software support Control Tower functionalities and that at least 10 of the top-25 supply chain companies use Control Towers nowadays.
Our conclusion based on these data is that the statement that “Control Towers solutions are now mature and entering the ‘productivity plateau’ of the supply chain hype cycle” makes sense. This doesn’t mean that we can sit back and rest, the majority of the companies is not using a Control Tower yet and might benefit from this concept. Also, many Control Towers still have a limited scope from supply chain and/or functionality perspective. Benefits can be increased by expansion of the supply chain scope, adding more supply chain partners and/or upgrading of the concept from a operational to a more tactical level.