The Five Capabilities of a Next-Gen Control Tower
Published: March 16, 2023
As CPG supply chains’ complexity and global nature have increased, it has become more challenging for firms to keep track of their operations and respond to supply and demand shocks in real-time.
Additionally, increased pressure to deliver products faster and more efficiently has made it even more critical to have visibility into their supply chain operations and to be able to respond quickly to any disruptions that might arise.
While many CPG companies are already leveraging some version of a Control Tower capability to improve visibility and manage risk, next-generation Control Towers are proving to be more effective at helping CPG companies mitigate the impact of disruptions. A report by McKinsey confirms this assertion, stating that “upgrading to an end-to-end digital nerve center can manage risk even more effectively while boosting output and productivity.”
We’ve identified five critical capabilities a next-generation Control Towers should have to help CPG companies better manage disruptions in the digital age.
Next-generation Control Towers leverage machine learning to quickly recognize patterns in massive swaths of internal data such as historical sales and external data such as weather, social media, and local health indices. This pattern recognition forms the basis of the ability to detect potential supply and demand disruptions before or as they occur, proactively providing alerts to planners.
A next-gen capability will then translate this data into actionable knowledge, such as where a potential disruption may happen and the financial impact. This provides organizations with a real-time comprehensive risk analysis and helps planners communicate the impact on the business to leadership.
As supply chain events develop, a best-of-breed capability analyzes multiple scenarios and recommends optimal mitigation plans for each one with visibility into trade-offs from operational and financial perspectives. This allows companies to prepare for different possible outcomes and make informed decisions about resources, operations, and strategies.
By extending these processes to partners, suppliers, and customers, a next-generation Control Tower enables greater collaboration and mobilization across the value chain, breaking down silos and helping orchestrate execution across all stakeholders.
The capability will then learn from the outcome of the selected course of action and adjust future protocols accordingly, constituting a continuous-learning loop.