How command centers can help with supply chain operations

What is a supply chain command center?

If you’re feeling confused, don’t be alarmed — supply chain command centers are a fairly recent phenomenon (or, at least, this way of describing them is).
The term “supply chain command center” was first introduced by Gartner in a 2022 report, and, at time of writing, is more of a concept than an established supply chain management software category — although some companies are beginning to create command center software.

Though there’s some debate about what the term means, the consensus seems to be that a supply chain command center uses various technologies to integrate data from the many functions that form (or are adjacent to) the supply chain — like Procurement, Inventory Management, Logistics and Transportation, and Order Management.

By connecting this data, a command center provides visibility across different functions. It can also bring in external data (like info from vendors or partners, or impacts from current events) to improve supply chain decision-making. And it may leverage predefined use cases for common supply chain scenarios, allowing users to provide recommendations and ultimately trigger actions.

How is a command center different from a control tower?

A supply chain control tower is a more established tool for integrating data from multiple sources (for example, sensors on trucks, equipment, and more), improving visibility and aiding supply chain management. Control towers are usually specific to individual functions,and have in the past been used most commonly in Logistics.

Teams turning to control towers to manage supply chain operations might use:

• A Logistics control tower to look at transport resources across the global supply chain
• An Inbound control tower to understand supply operations and see how materials are being brought from a supplier into a factory
• A Distribution control tower to see how finished goods are delivered to customers

But this domain-specific approach can result in domain-specific visibility, rather than a broader, more end-to-end view. And supply chain control towers aren’t necessarily built to help users take immediate action, even when issues are identified. A control tower could highlight an issue or area of concern, but workers would still have to step in and sort it all out themselves via various software, phone calls, emails, and more.

Supply chain control tower

• Usually specific to individual function
• Often used in Logistics
• Generally based on internal input
• Can be used to observe

Supply chain command center

• Usually encompasses multiple functions
• Often used for overall supply chain operations management
• Can accommodate internal and external inputs
• Can be used to observe and act

Supply chain command centers can be seen as an expansion of control towers, allowing for greater connection and orchestration (that is, triggering actions or processes) within supply chain operations. A command center becomes a hub for all of the systems and processes that must be monitored and acted upon as part of managing supply chains, bringing together the control towers and adding the ability to solve problems, rather than just observe them.

• This isn’t to say control towers are obsolete. Read more about how control towers are still being used to get ahead of supply chain disruption and build supply chain resilience.

How can command centers be used to manage supply chain operations?

The use cases for supply chain command centers are nearly limitless. But they’re most effective when they’re helping supply chain workers make decisions based on data from multiple functions — often incorporating complex constraints and variables — and then take action on related process optimization initiatives.

Here are just a couple of examples:

Improving materials planning

Optimizing materials planning strategies to reduce excess inventory and free up working capital requires data from functions like Procurement, Production, Inventory Management, and Sales.

A command center connecting all of this info and offering users greater supply chain visibility could reveal that Procurement should actually order less of a specific material, or that Production should create more of another material, based on both actual and anticipated customer demand.

• Find out how the Celonis Planning Parameter Optimization App can help with supply chain planning.

Using excess stock as a supply source

Using excess inventory as a source of supply isn’t as simple as seeing where there’s too much stock and moving it to locations where inventory levels are low.

A supply chain manager needs to consider both the cost of moving stock between locations and the impact on the origin location of moving that inventory. Whether or not these costs and impacts are worthwhile can also depend on additional factors like customer priority. A command center could bring together all the data necessary to factor in these variables for the most-informed decision.

• Take a look at our Inventory Management Starter Kit to discover some of Celonis’ most impactful Inventory Management use cases.

Streamlining logistics management

Expanding on the classic control tower model of logistics observation and management, a command center can provide a fuller picture of logistics performance, indicating where it’s dropping below (or exceeding!) benchmarks around key metrics like on-time delivery and transportation costs.

By adding in richer data from functions like Order Management and Inventory Management and the ability to actually take action, a command center can help take logistics optimization to the next level. This might mean shifting capacity between different lanes or shipping modes to reduce costs, or considering order fulfillment from a different location to improve delivery times.