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Supply chain control towers: Getting ahead of disruption and building resilience
Enterprises are increasingly turning to technology to allow their supply chains to operate effectively in an environment of continuous change and ongoing disruption. Whether it’s dealing with global emergencies like the Red Sea Crisis, or addressing more localized issues such as industrial action, extreme weather events, or tragedies like the cargo ship collision and bridge collapse in Baltimore, technology is being leveraged to enable supply chain resilience.
Forbes reports, for example, that 44% of CPG brands plan to increase the use of technology for supply chain management. And AI-based technologies are proving particularly popular, with a Gartner survey showing half of supply chain organizations will implement generative AI in the coming year. In fact, according to The Process Optimization Report, 91% of supply chain leaders say their organizations are already using AI in some form.
In particular, supply chain control towers – operational solutions that use advanced technologies such as artificial intelligence to proactively manage supply chains – have been growing in importance since the COVID-19 pandemic.
With that in mind, I spoke to Fernando Miranda, Principal Domain Expert at Celonis, to find out more about what a control tower is in the context of supply chain operations. We discussed how they help enterprises address today’s supply chain challenges, and how Celonis works as a control tower for supply chain orchestration.
What is a supply chain control tower?
A supply chain control tower functions at a highly operational level, and is designed to answer two specific questions. First, what is actually happening in the supply chain? And second, what should be done about it?
As Miranda explains: “If I’m a supply chain manager, I need very granular information about what goes on in the part of the supply chain I'm looking into. I'm asking myself the question, what should I be doing next? I'm benchmarking against my objectives, like service level, inventory level, cost and CO2 targets. So that tells me what’s happening and how I am meeting my targets. If I see a deviation or something that I don't like, then I can ask what I should do next. How should I actually fix that problem? That's a control tower.”
A control tower can be applied to different parts of the supply chain, for example:
An inbound supply control tower to look upstream to see how materials from different suppliers are being brought into a factory to enable finished goods production.
A distribution control tower to oversee how finished goods are moved from the source factory to customers, including how inventory is distributed across the network.
A logistics control tower to look solely at the transport resources used to move materials, and to manage carrier interactions and shipment scheduling.
How control towers help navigate supply chain disruptions
So how does a supply chain control tower help businesses address and adapt to the continually changing global supply chain environment? “It is all about speed”, says Miranda.
“It is about understanding events faster, assessing risks or problems faster, and finding solutions faster before it is too late to do anything about it. And even if we find ourselves already in a pickle, find a way out as quickly as possible. I suppose both these capabilities would amount to what we understand for a resilient supply chain.”
As Miranda explains, it’s not simply a matter of discovering potential disruptions, but also understanding the impact that disruption will have across the entire supply chain. The earlier businesses can do that, the quicker they can take corrective action. For example, if they discover a port closure is imminent – threatening planned routes – enterprises can quickly secure alternative transport capacity to reroute shipments before options become limited.
Using Celonis as a supply chain control tower
Global businesses such as Siemens and Hexion are already using Celonis to increase supply chain resilience, and the platform is ideal as a supply chain control tower. Advanced process mining technology enables enterprises to create a supply chain digital twin which shows – at a very granular transactional level – what is taking place across every single link in the supply chain.
These insights can then be elevated to understand and communicate what is happening at any level, and combined with AI and process knowledge to make informed decisions about what to do next. We call this Process Intelligence. Read our article on Process Intelligence in the supply chain, to find out more.
Three areas where Celonis excels as a supply chain control tower are visibility, collaboration and automation.
Cross-functional visibility
Celonis provides a level of supply chain visibility that goes far beyond the static information provided – largely without context – by standard business intelligence and data analytics tools, and allows businesses to see what is happening across functions. As Miranda explains:
“In a control tower you are dealing with cross-functional elements like inventory management, customer service and logistics. It's not just about pulling all the data together and showing it side by side. There's more to it as there are dependencies across each of them. That’s where Celonis plays a very important role because we're linking all these processes together and providing additional insights beyond just the pure data point or KPI result.”
This cross-functional visibility is enabled by object-centric process mining (OCPM), an advanced form of process mining that allows businesses to visualize how processes interrelate and interconnect across the entire organization. OCPM provides a common language, not just across functions but across disparate systems that might all represent the same function in different ways.
Effective collaboration
Once businesses have true visibility into supply chain disruption and the impact across all functions, responding to those disruptions with corrective action will inevitably involve an element of collaboration. Miranda gives changing shipments as a simple example.
“If I need to rearrange my shipments, I cannot do that blindly because I need to check with the destination location to make sure they have docking capacity for me to make that change. Different teams and functions of the supply chain often need to collaborate before the final solution is found.”
In addition to providing cross-functional visibility, Celonis also enables supply chain collaboration by serving as a platform where different functions can work together to solve problems or drive improvements.
Ongoing automation
Miranda doesn't believe supply chains will ever be fully autonomous, humans will always need to be in the loop. But, individual elements within our supply chains will increasingly be automated.
One of these areas is the detection of potential disruptions, which is becoming less reactive and more proactive due to technologies like AI and predictive analytics. According to Miranda, “because we have a very granular and detailed view of operations we can start building trends on the behavior that we see in the execution of operations. We can start detecting and prioritizing risks much earlier.”
What’s more, corrective action to mitigate risk and minimize the impact of disruption can also be automated. Once businesses have full visibility of the issue, deciding what to do about it can be a manual or automated process. When a control tower has access to all the knowledge and context it can automatically work through numerous different options to find the optimal resolution, and potentially trigger an RPA bot to execute action.
Take control of your supply chain
Using Celonis as a control tower helps businesses truly understand their supply chain operation, find and act on opportunities for improvement, and increase resilience in times of continuous disruption.
Find out how you can take control of your supply chain, as well as discovering how other businesses are doing it, in The Insider’s Guide to Supply Chain Transformation.
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