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About the Author

Rich Becks is General Manager, High Technology at E2open, a leading provider of cloud-based supply chain management solutions.



Supply Chain Comment

By Rich Becks, General Manager, High Technology, E2open

November 17, 2011



The Rise of the Control Tower: Bringing Together Visibility, Collaboration and Execution

To Overcome the Inefficiency Drag on Productivity and Profits, Brand Owners are Working More Closely with Trading Partners


Linear supply chains have given way to dynamic trading networks. Brand owners now depend on complex networks of interdependent trading partners collaborating to achieve the holy grail of demand-driven customer fulfillment. With this change, brand owners now have partners distributed around the world using different means and systems for information management. This model of indirect management has created significant communication gaps, prompting the cry of “how can I manage what I can’t see?”

 

Technology Hasn’t Kept Up

Even though this business model has rapidly risen to prevalence in industries such as high technology, telecommunications, aerospace and defense, and consumer packaged goods, most companies are constrained by a lack of enabling technology. Today’s marketplace requires technology solutions that are able to facilitate many-to-many, multi-enterprise communication, business process management, and exception management in order to collaboratively serve customers.

Becks Says:

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Brand owners now depend on complex networks of interdependent trading partners collaborating to achieve the holy grail of demand-driven customer fulfillment.
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While ERP systems provide seamless data and transactions management inside the four walls of a company, brand owners struggle with fragmented planning and execution outside their four walls. As a result, many have resorted to “management by spreadsheet,” phone, fax, and email to bridge the gaps. The consequences are costly, as working capital is tied up in excessive inventory across multiple tiers of component suppliers, contract manufacturers, and distributors to better ensure that service level agreements (SLAs) with customers are maintained. The costs of bloated inventory safety stock, latency, expediting, and the opportunity cost of missed margin windows have held the anticipated benefits of the outsourcing model hostage.

 

Barriers to Achievement

To overcome the inefficiency drag on productivity and profits, brand owners are working more closely with trading partners: first, to share information more quickly and seamlessly; and second, to improve collaboration in order to resolve disruptions to plans and processes. The obstacle to bringing this extended enterprise together, however, is the fragmented nature of the information systems used by network partners. Even the most advanced ERP, best-of-breed, and home-grown systems were not designed to interface with one another, leaving brand owners with few options outside of resource-intensive manual processes using spreadsheet, phone, fax, and email. To solve this challenge, brand owners need to create a common platform and language for sharing information and collaborating across their trading networks.

 

The Rise of the Control Tower

A common strategic pursuit among leading brand owners today is the design and operation of a “Control Tower.” The Control Tower is simple in concept, yet complex in design and implementation. The concept is to provide the brand owner with a centralized, panoramic view of its demand and/or supply-side trading network operations. Business events such as supply disruptions (e.g., global part shortage), demand spikes or troughs (e.g., a new product is a hit), and natural disasters (e.g., Japanese tsunami) have demonstrated the need for not only cross-network visibility, but also the need to execute activities across multiple tiers of partners in the trading network. While the trading network business model is active and gaining market traction, brand owners have been discouraged from building Control Towers on account of partners’ technological limitations.

 

Final Thoughts

Brand owners need a new, strategic solution for managing business across their trading networks. They need a shared “view” of the network, seamless multi-enterprise processes, and collaborative exception management capabilities in order to sense issues and respond quickly and intelligently. This approach requires a more sophisticated technology framework, but the benefits are well worth the investment: specifically, the ability to access information from every part of a multi-enterprise supply chain and view it within a real-time context; to identify exceptions as they arise; and, to work collaboratively with partners to resolve exceptions and execute real-time decisions.


Recent Feedback

Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.


Srihari
Senior Consultant
Infosys
May, 22 2016

Surprised to see Home Depot fall off the list; thought they were winning with Sync?


Mike O'Brien
Senior editor
Access Intelligence
May, 26 2016

Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.


Julie Leonard
Marketing Director
Inovity
Jun, 27 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 


Carsten Baumann
Strategic Alliance Manager
Schneider Electric
Aug, 19 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".






Jo Ann Tudtud-Navalta
Materials Management Manager
Chong Hua Hospital, Cebu City, Philippines
Aug, 21 2016

U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm


Sandy Montalbano
Consultant
Reshoring Initiative
Aug, 24 2016

 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!


Robert
Transportation Manager
N/A
Aug, 30 2016

SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.


Ian Jansen
Mr
NHLS
Sep, 14 2016

Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 


Don Benson
Partner
Warehouse Coach
Sep, 15 2016

Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.


Jade
Admin
Fulfillment Logistics UK Ltd
Oct, 02 2016

Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.


Mike Dargis
President of asset-based carrier based in the Midwest
Zip Xpress Inc. (at ZipXpress.net)
Oct, 03 2016

Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com


Blaine
Inventory Specialist
Syncron
Nov, 16 2016

This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 


Bob McIntyre
National Account Executive
DBK Concepts LLC
Nov, 21 2016
 
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