Manufacturers Are Feeling the Heat. Can a Control Tower Help?
Disruptions show no sign of abating for manufacturers. Advanced response technology may be the answer.
Published: July 5, 2023
In an era of unrelenting disruption, industrial supply chains face a formidable challenge: evolve or risk losing value at every turn. The traditional models — fragmented, sprawling, and rigid — are ill-equipped to handle today’s volatility. Enter the digital operating model, revolutionizing supply chain management and, crucially, the bottom line.
The next-generation Supply Chain Control Tower, spearheaded by artificial intelligence and machine learning technologies, goes beyond the superficial show of a command center. It unearths hidden issues like network bottlenecks and multi-tier inventory, optimizing decision-making across all functions. In essence, it’s the new standard for resilience in supply chain management.
More than a command center
The Control Tower is no mere transportation monitor. Instead, it’s a robust platform, translating real-time data into actionable strategies. Leveraging real-time analytics, it predicts potential disruptions and recommends optimal countermeasures, letting businesses act decisively in pivotal moments.
Five crucial capabilities are at the heart of the Control Tower:
- Sense: Detect internal and external disruptions.
- Translate: Determine the impact and significance to the business in real-time.
- Solve: Prescribe resolutions and decision support.
- Execute: Break down silos and enable process orchestration.
- Learn: Adapt resolution protocols from taken decisions.
The stakes are high
An array of factors — semiconductor shortages, geopolitical shifts, cyberattacks, labor shortages — threatens to bring global supply chains to a standstill. Traditional operating models often leave businesses ill-prepared to pivot, and nowhere is this vulnerability more evident than among industrial manufacturers.
Inefficient supply chains damage service levels and cash flow, inflate costs, and put balance sheets under pressure. Forecasting errors eat away at margins or market shares, a situation encapsulated in Fitch Ratings’ October 2021 warning of the increasingly negative impact of supply chain constraints.
The future is digital
Supply Chain Control Towers are revolutionizing the way industrial manufacturers approach these challenges. Using machine learning, they preempt potential disruptions and optimize network efficiency. Moreover, they move beyond siloed decisions to a holistic view of the business.
For instance, when logistics disruptions occur, the Control Tower identifies affected raw materials and orders at risk, providing valuable insights for quick resolution. It also equips industrial manufacturers with tools for comprehensive “what-if” analysis to react optimally to disruptions and opportunities.
A transformation journey
Adopting the Supply Chain Control Tower is not an overnight switch but a transformation journey, blending technology, process, and capability development. The rewards are lower costs, increased efficiency, and revenue growth. At a time when industrial manufacturers need to be more agile than ever, the Control Tower offers a route to resilience and profitability.