Supply chain professionals often encounter resistance when they propose major changes to executives in their company. In Integrated Logistics, a control tower is the key enabler utilising people, process and leading edge technology to collect, analyse and harness the most timely, accurate, and complete data about orders, sales, inventory, shipments, costs and assets.
A control tower is extremely useful, but it is also a strategic investment.
If there’s a budget crunch, the C-suite will often be reluctant to move because of the price tag. Within any large company, the supply chain is one priority jostling for attention among many others. The challenge is to speak to executives in their language.
Here are a few key points that might sway them:
1. Companies that have visibility are more profitable
It seems almost self-evident: if a company can improve its reliability, keep inventories low, and better co-ordinate its suppliers, then it’s likely to make more money. This is exactly what a control tower seeks to achieve. It’s especially useful in a modern business environment, where supply chains have become increasingly complex due to a large number of services being outsourced.
There is evidence to back it up. One recent study found that a quarter of companies that had full visibility in their supply chains made returns of 25% or more. Companies with less visibility didn’t do as well. It’s simple: better visibility means more profits.
2. Better reliability means better customer service
The customer is always right. What’s more, they know it. In the current market, where consumers have more choice and less patience than ever before, errors and delays will start to hit the bottom line very quickly. (See for example, KFC’s recent fiasco in the UK, where they ran out of chicken). A big marketing budget won’t mean much if orders are constantly lost or delayed and customers start grumbling on social media.
To keep customers happy and orders up to date and accurate, a control tower is the perfect solution. With the immense amount of data it can provide down to the ‘granular’ level of the supply chain—precise information regarding whereabouts of a certain batch of goods for example, companies have the visibility to keep an eye on every single process of their supply chain at any time. Any problems that arise can be dealt with immediately too, minimising any possible damage to brand reputation. Customers can rely on you for reliable, accurate, and scheduled orders.
3. Better accountability among suppliers
Within a complex supply chain, a control tower will give you a detailed view of which suppliers are meeting requirements and which are falling short. If a supplier routinely doesn’t meet its agreed targets, a control tower will let you know about it immediately. Because data is shared with the suppliers, they will be aware that their customer is watching. This gives them an incentive to lift their game – and gives customers the option of taking their business elsewhere.
4. Traditional models don't cut it anymore
A recent study found that 89% of supply chain executives thought their customers believed their current supply chain models were unwieldy and half of them blamed “decision-making speed” and “flexibility to respond”.
The old “track and trace” model doesn’t tell you enough, and often doesn’t generate actionable intelligence quickly enough to make a difference. And companies that don’t address complexity in their supply chain risk being left in the dust by their competitors.
5. A control tower is a wise way to gain a strategic advantage
On the other hand, the same statistics show that it’s not too late to move. If it’s obvious to customers that the overwhelming majority of existing supply chains are too convoluted, then it’s obvious that not enough companies are addressing the issue. That leaves a space for early movers to reform their supply chains, and gain market share.
In short, executives want to know that any investment will start to see a return in a reasonable amount of time, will keep the business running smoothly, and will keep customers happy. There might be are other ways to hit these targets, but investing in a control tower is the wisest would be a wise choice.
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