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How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
Retailers, manufacturers and consumer goods companies can overcome failed and fractured supply chain digitization efforts by focusing on key performance metrics instrumented through proper predictive analytics and effective use of data shared across functional areas inside and outside the organization.
January 2018
DIGITAL BUSINESS
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EXECUTIVE SUMMARY
As supply chains across industries grow in complexity and become more unpredictable,
volatile and unstable, supply chain managers across the retail, manufacturing and
consumer goods industries face unprecedented challenges. To thrive in this brave new
world, companies need an agile digital supply chain1 to more efficiently address customer
needs in today’s always-on world. This supply chain embodies four qualities simultaneously:
• Connected: Enables communications among interconnected devices, systems
and processes.
• Informed: Leverages a multiplicity of data sources available in today’s digital world.
• Smart: Incorporates advanced analytics to drive real-time insights.
• Automated: Uses automation technologies to improve productivity and reduce costs.
A recent study that we conducted with Forbes Insights found that most companies are in
the early stages of digitizing their supply chains. In fact, our study revealed that only a
small group of companies (9%) are applying high levels of digitization to their supply chain
planning and execution (see Figure 1).2
Given the industry’s measured embrace of supply chain digitization, we believe decision-
makers need to get serious about modernizing core capabilities that span the industry’s
value chain — from manufacturing and distribution through retailing. When applied
properly, supply chain digitization can address several issues including revenue growth,
our respondents believe.3
In fact, there is growing realization that despite widespread dissatisfaction with early
digital supply chain efforts revealed by our study, decision-makers believe more informed,
data-driven decision-making via enhanced analytics capabilities will eventually pay off. For
example, nearly half of senior executives in the retail and CPG industries (49%) believe
their organizations can achieve digital supply chain maturity over the next few years.4
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Digital Business
| How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
Only 9% of companies can be called supply chain “progressives” — those with high levels of maturity digitizing their supply chain vs. 33% as “runner-ups” and 60% as “up and comers.”
3How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits |
Supply Chain Digitization: Early Innings
Figure 1
Source: Digital Supply Chain — Are you leading the pack? Cognizant’s latest study in collaboration with Forbes.
https://www.cognizant.com/supply-chain-digitization-report
Digital technology, however, remains a double-edged sword, and is seen both as an enabler
and as a top challenge for supply chain digitization by senior industry leaders. Often, user
dissatisfaction is not directed at a particular technology, but with how it is integrated into
a unified networked system. A significant percentage of executives believe that improved
data analytics is not delivering better business outcomes, a belief that is hindering digital
supply chain transformation.
We believe that organizations can overcome their digitization challenges by leveraging
the supply chain control tower to create more innovative business process and analytics
capabilities. This white paper will illustrate our best practices and recommendations for
doing so.
3
Digital Business
No effect
Increase of up to 3%
Increase between 3% and 5%
Increase between 5% and 10%
Increase of 10% or more
9%
10%
21%
40%
21%
Retailers believe supply chain digitizationcan enable several benefits …
… including revenue growth!
51% 36% 32% 32%
CostSavings
ManufacturingEfficiency
EfficientCustomer
Experience
New Organizational
Models
4 | How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
Digital Business
DEMYSTIFYING THE SUPPLY CHAIN CONTROL TOWER
We define the supply chain control tower as a cross-functional team empowered to monitor, analyze
and take suitable actions to improve specific KPIs across the extended value chain. The control tower
team utilizes the following three key components:
• Early 360-degree visibility: Information from across systems and processes is shared at the
right time.
• Cognitive computing engine: Information is monitored and analyzed; analytical tools assist
decision-making.
• Collaborative responsive mechanism: Disparate functions across the supply chain network work
in harmony via workflow management capabilities.
It is equally important to dispel myths about the supply chain control tower. A supply chain control
tower is not:
• A product that one vendor provides.
• A replacement of existing ERP or MRP systems.
4
Insights, Actions, Tracking, Monitoring & Control
Internal & External Collaboration
Data Analytics, Statistical Models, Predictive Analytics & Scenario Management
Alerts & Exceptions Management
Presentation, Mobility & Security
Data Consolidation, Mapping & Preprocessing
Data Feeds: Any System, Data or Format
COLLABORATIVE RESPONSIVE MECHANISM
COGNITIVE COMPUTING ENGINE
EARLY 360-DEGREE VISIBILITY
The Supply Chain Control Tower Trio
Supply chain control tower layered capabilities.
Figure 2
5How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits |
Digital Business
• A one-size-fits-all solution for end-to-end visibility. It is typically tailored to an organization’s
specific needs in terms of its industry type, organizational structure, geographic reach and scope
of functions and processes.
Business Architecture
As Figure 2 (previous page) illustrates, the business architecture of the supply chain control tower
comprises three essential layers that power its primary capabilities.
• Early 360-degree visibility: Being digital requires insights. The business objective of this layer
is to provide real-time or near-real-time visibility to events pertinent to the KPIs monitored by the
control tower. This is enabled by:
» Data and event integration: The KPIs are distilled into data elements to reveal which events
should be tracked to provide actionable information. These data elements and events must
then be mapped to enterprise systems that house such information.
» Data processing: The data received by these systems of record is then consolidated and
processed to arrive at meaningful and readily useful insights.
» Presentation: A dashboard presents the collated information to users in an easy-to-
understand and meaningful way (see Figure 3). It provides a shared synchronized view across
the organization and supply chain partners, with the ability to easily identify which events the
control tower team must respond to.
ATIF K.
Yard
Delivery
View 3
View 4
View 5
To do list Active | Resolved
Alert # 1455:Trailer load time > 40 min.Action:1. Send email to NDC4. [email protected]. Dock door assignment revision
Alert # 1456:Gate-to-door time > SLA.Action: Contact Yard of NDC1.+1-222-333-4444
Alert # 1457:Trailer didn’t arrive for loading.Action: Contact Carrier 3.+1-222-333-4444
Alert # 1458:Trailer load time >40 min.Action:1. Send email to NDC1. [email protected]. Dock door assignment revision.
Alert # 1459:Trailer didn’t arrive for loading.Action: Contact Carrier 3.+1-222-333-4444
Health Check Key Performance Indicator Value Target
On time arrival of trailer 99% 95%
Gate-to-door average time 34 min 30 min
Unloading time / trailer 50 min 40 min
Time to open trailer door 11 min 15 min
80%
90%
Percentage of trailers leaving within SLA
% of trailers leaving within SLA1 w | 1 m | 6 m | 1 y | custom
Unloading / loading time by hours of day1 w | 1 m | 6 m | 1 y | custom
Gate-to-door time by hours of day1 w | 1 m | 6 m | 1 y | custom
Today’soverview
120Total
scheduled
20Yet toarrive
17In yard
83Checked
out
120Total
scheduled
18Yet toarrive
4In yard
98Checked
out
Yet toarrive
20
Checked-in
5
Reacheddoor
3
Traileropened
7
Trailerunloaded
2
Checked-out
83
Yet toarrive
18
Checked-in
2
Reacheddoor
2
Traileropened
0
Trailerunloaded
0
Checked-out
98
Alerts 1 3 4 2 33 Alerts 2 2 0 0 0
Console
50
45
40
35
30
25
20
15
10
5
0
70
60
50
40
30
20
10
0
70
60
50
40
30
20
10
0MON TUE WED THU FRI SAT SUN 1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00 1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00
Inbound Outbound Total Unloading Loading Standard Unloading Loading Standard
Control Tower Dashboard
A dashboard similar to this can be used to monitor the events and KPIs across transportation, yard and distribution center functions.
Figure 3
6
» Alert/exception management: A supply chain control tower issues alerts when an event that
impacts relevant KPIs occurs or is impending. These alerts are typically customized by orga-
nizational roles. Users can view the alerts and manage exceptions through the control tower
dashboard.
• Cognitive computing engine: Being digital requires intelligent action. The business objective of
this layer is to use data from external and internal sources to apply intelligence to business pro-
cesses, anticipate and prioritize issues, predict disruptions, mitigate effectively and ensure smart
autonomous decision-making. This is achieved by:
» Quantifying impact: When an event has occurred, or is imminent, the team should be able to
anticipate and quantify the likely impact of the event so appropriate response measures can
be devised and delivered. The event could be a delay in production by an overseas vendor,
or an outage at a manufacturing plant, or a delay in one segment of a multitier, multi-nodal
transport network. The supply chain control tower will provide users with the capability to
understand and quantify the impact of such events on the relevant KPIs (service level, fill rates
and revenue).
» Scenario analysis: This pivots around the analytic capability to develop and analyze various
scenarios to solve an exception. Importantly, this capability allows users to perform what-if
analysis of scenarios and understand the impact of pursuing one or more scenarios. This helps
the team evaluate different solution options.
» Predictive analytics: A supply chain control tower not only provides visibility to what has
happened and what is happening, but it also helps predict what can happen next through its
predictive analytics capabilities.
• Collaborative responsive mechanism: Being digital requires automation and collaboration.
The business objective of this layer is to provide the means to collaborate across multiple func-
tional areas both within and outside the organization to effectively respond to an event. This is
achieved by:
» Workflow process management: This allows various teams to leverage workflow capabilities
to orchestrate an effective response to an event. For example, if a delivery is delayed then
process management could trigger notifications to buyers, logistics managers and transporta-
tion planners. These stakeholders can be empowered to provide feedback on a mobile-enabled
workflow tool for immediate feedback.
» Workflow tool integration to enterprise systems: The workflow tool can be integrated with
enterprise systems to automate certain types of response mechanisms when initiated by the
control tower team.
Digital Business
| How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
A supply chain control tower not only provides visibility to what has happened and what is happening, but it also helps predict what can happen next through its predictive analytics capabilities.
7How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits |
Digital Business
Organizations have often mistaken the control tower construct to be the same as a visibility solution. This has often led organizations to undertake large, complex engagements to provide so-called “end-to-end” visibility.
SETTING UP A CONTROL TOWER
Control towers have been on the agenda for a long time as a mechanism to improve key metrics in
the increasingly complex supply chain landscape. However, organizations have often mistaken the
control tower construct to be the same as a visibility solution. This has often led organizations to
undertake large, complex engagements to provide so-called “end-to-end” visibility. These programs
have met with varying levels of success and in many cases caused disenchantment with the concept
of a control tower.
We believe the focus of control towers should be on specific metrics/KPIs rather than on trying to
solve all issues in the supply chain. While visibility to events relevant for the KPIs is a must-have for
control towers, we believe analytics and process orchestration are two key components required to
inform and deliver sustained and meaningful business impact (see Figure 4).
1 IDENTIFY & PRIORITIZE BUSINESS OBJECTIVES
Identify and prioritize the supply chain functional areas.
Define problem statements.
Identify the target KPIs.
2 DEVELOP DETECTION AND
RESPONSE MECHANISM
Identify data elements pertinent to target KPIs.
Define thresholds.
Develop response strategy — processes and workflows.
3ENABLE THROUGH
TECHNOLOGY
Identify control tower building blocks.
Create roadmap.
Design and deploy.
4EVOLVE THROUGH
CONTINUOUS IMPROVEMENT
Post-implementation benefit realization.
Continuously assess value creation by monitoring KPIs.
Provides input to the roadmap in recommending enhancement of capability maturity.
The Virtues of Supply Chain Control Towers
Figure 4
Big-bang approach to solve all issues in supply chain. Limited to just a visibility platform.
Business objective-driven. Focus on specific metrics/KPIs. Leverages analytics & process orchestration.
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| How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
We suggest an evolutionary approach for setting up a control tower (see Figure 5). The steps include:
• Identify and prioritize business objectives. The organization should identify and prioritize supply
chain functional areas for the control tower. For the prioritized areas, organizations must define
the problem statements and identify the target KPIs. The initial objective needs to be improvement
on the prioritized KPIs.
• Develop detection and response mechanisms. Identify data elements that can help detect events
pertinent to KPIs. These data elements can be distributed across multiple enterprise systems. An
effective response strategy is to develop processes and workflows across teams to enable efficient
and effective management of KPIs.
• Enable through technology. Once the organization has the detection and response mechanisms/
processes defined — and perhaps honed manually over a period of time — these processes can be
technology-enabled.
DEFINE BUSINESS OBJECTIVES
CREATE SUPPLY CHAIN CONTROL TOWER CAPABILITY ROADMAP
IDENTIFYCONTROL TOWER BUILDING BLOCKS
Supply Chain Problem KPI Current TargetArea Statement State State
Area 1 — — — —
Area 2 — — — —
Area 3 — — — —
Area 4 — — — —
Visibility Analytics &Decision-Making
ProcessOrchestration
Alert generation
Exceptionmanagement
Clean, real-timeinformation in context
Synchronizedshared View
Present daydata
Data consolidation
Real-time visibility from trading partners
Predictiveanalytics
Scenariomanagement
Dataanalytics
Statisticalmodels
Internalcollaboration
Externalcollaboration
Workflow processmanagement
Integration toenterprise systems
Business Objectives
Supply
Chai
nA
rea
1S
upply
Chai
nA
rea
2S
upply
Chai
nA
rea
3
Control Tower Building Blocks
Priority /ranking Visibility Analytics Process
orchestration
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
KPI
* Color coding to categorize building blocks as mandatory, nice to have, not required.
Supply Chain Control Tower Planning: Our Recommended Approach
Figure 5
9How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits |
Digital Business
» Identify control tower building blocks. Once the business objective are defined and pri-
oritized, the organization must identify the technology capabilities required to meet those
objectives. All business objectives do not need every control tower capability — visibility, pre-
dictive analytics and process orchestration — to achieve them.
» Create a road map. The next step is to create a road map for the control tower that aligns with
business objectives and leverages technology levers as needed.
» Design and deploy. The next step is to finalize the process and system design and imple-
ment the solution. Organizations should operationalize the suggested practices and process
improvements through timely training and communication.
• Evolve through continuous improvement. Once the solution is operational, the supply chain con-
trol tower continuously assesses its value creation by monitoring KPIs and continues to deliver
post-project benefits. This KPI assessment provides input for guiding the enhancement of capabil-
ities to enable continuous improvement on the path to digital supply chain maturity.
FOOTNOTES
1 “Digital Supply Chain — Are You Leading the Pack?” Cognizant and Forbes Insights, March 2017, p. 2 [PDF p. 4];
https://i.forbesimg.com/forbesinsights/cognizant_supply_chain/Digital_Supply_Chain.pdf.
2 Ibid, p. 2 [PDF p. 4].
3 Ibid, p. 2 [PDF p. 4].
4 Ibid, p. 5 [PDF p. 7].
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| How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits
11How a Well-Executed Supply Chain Control Tower Can Accelerate Digital’s Business Benefits |
Digital Business
Girish Dhaneshwar Assistant Vice President and Consulting Partner — Retail, Travel and Hospitality and Consumer Goods business unit, Cognizant
Girish Dhaneshwar is an Assistant Vice President and Consulting
Partner within Cognizant’s Retail, Travel and Hospitality and Con-
sumer Goods business unit. He has over 20 years of operations and
supply chain experience, and he is part of the consulting leader-
ship team responsible for setting strategic direction and leading
clients through transformational supply-chain initiatives. Girish has
an M.B.A. from S.P. Jain Institute of Management and Research,
Mumbai (SPJIMR Mumbai) and a bachelor’s degree in engineering
from College of Engineering, Pune (COEP). Girish can be reached
ABOUT THE AUTHORS
Niraj Singh Assistant Vice President — Consulting, Cognizant Business Consulting
Atif Ali Khan Manager — Consulting, Cognizant Business Consulting
Niraj Singh is an Assistant Vice President — Consulting within
Cognizant Business Consulting and a member of its Supply Chain
Practice’s leadership team. He has managed large engagements
for Fortune 100 clients worldwide, including the U.S., Japan,
Europe and India. Niraj has an M.B.A. from the Indian Insti-
tute of Management and a bachelor’s degree in manufacturing
engineering from the Indian Institute of Technology, Kharagpur.
He can be reached at [email protected].
Atif Ali Khan is a Manager — Consulting within Cognizant Business
Consulting. He has over 10 years of international consulting expe-
rience in retail and the supply chain with Fortune 100 companies.
Atif’s fortes are warehouse and distribution center operations, retail
order management, e-commerce supply chain and store opera-
tions. He holds CPIM accreditation, a bachelor of technology degree
from Aligarh Muslim University, Aligarh, India, and an M.B.A. in
marketing and finance from LBSIM, New Delhi. Atif can be reached
ABOUT COGNIZANT
Cognizant (NASDAQ-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innova-tive and efficient businesses. Headquartered in the U.S., Cognizant is ranked 205 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.
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