logistics control towers
TRANSCRIPT
2 July 2015
Transport SIG – July 2015
William Sears
Logistics Control Towers:
Buzzword or Value driver
2
Agenda
Introduction, Need, Definition & Attributes
What are the benefits of Control Towers?
Typical failure points for Control Towers
What are the visibility requirements for successful Control Towers?
Control Towers - hype or a real differentiator?
2 July 2015
32 July 2015
IntroductionWhat is a Logistics Control Tower
There are varying definitions around Logistics Control
Towers. The common elements are as follows:
• Holistic visibility of all interconnected warehouse and
transport functions in near real time
• Real time information must enable near real-time
decision making across the value chain – A Control Tower must highlight the event and the impact across multi-tier,
multi-functional and multi-organisational participants
– Events must highlight non-adherence to plan, but also all subsequent
impacts across the chain
– Non-adherence to plan is not as important as to how the event and
subsequent impacts across the chain are dealt with
42 July 2015
The power of the towerWhy the hype?
• A combination of cost pressures, increased complexity, proliferation
of data, scarcity of talent and customer service requirements have
lead to the rise of Control Towers
52 July 2015
IntroductionMeasures of success of a Control Tower
• According to Bryan Ball (Aberdeen), a Control Tower’s success can
be measured by the improvement in latency – we equate this to the
“time to problem resolution”
Two components of improved latency:
1. Time to alert
– Know sooner, near real time
2. Time to problem resolution
– Act Faster
62 July 2015
IntroductionMeasures of success of a Control Tower
1. Time to alert
• Know sooner ~ near real time
• Alert must enable meaningful
action
– Understanding the impact of the
event (relevance of the event is
key)
• Key event/alert criteria
– To whom?
– About what?
2. Time to problem resolution
• Act faster
• Determination of impact of
event on upstream or
downstream processes
• Determination of what needs
to be done in near real-time
• Accelerated problem
resolution is dependent on the
concept of responsibilities
– Who needs to know?
– What needs to be done and
what the time frame for
resolution needs to be
72 July 2015
Attributes of a Control Tower Complete view of end state is required
• What are the key attributes of a Logistics
Control Tower?
1. High quality external information
feeds + High quality internal data
= AUTOMATION (Big Data)
2. Real-time Key Performance Indicators
(KPIs) enable determination of
impact
3. Defined roles and responsibilities:
who will respond?
Real-time and predictive alerts
Processes and automated workflows
Real-time analytics
Decision support capability
Real-time decision making
& time of resolution }
8
The Power Of The TowerValue proposition of a Control Tower
Horizontal Supply Chain Collaboration & Orchestration
Internal and external partner collaboration across the end-to-end value chain to enable more effective service. Close internal/external integration allows organizations to leverage supply chain partners’
strengths, and optimize end-to-end supply chain costs and speed to market..
Effective Centralized Talent & Organizational Alignment
Critical supply chain skills are required to manage complex supply chain challenges. With a scarcity of talent, it
becomes critical to centralize critical skills and leverage them regionally/globally in an effective way.
Dynamic Decision Making & Increased Agility
Successful supply chains must have an operating model and strategy that is agile, supports quick determination and alignment of root causes, models potential responses, and enables data-driven decision making in real-time
92 July 2015
Different Control TowersIntegrate, optimize and synchronize the activities of various parties in a value chain
Inbound Supply Demand and Supply
Other potential CT’s:
DDMRP
Direct Material
Service Management
Orchestration (Planning and Execution Management)How can we do it best? Make it happen!
Visibility (Real Time Dashboards and Alerts – SVOT)What is agreed, required, available, committed and happening now and next?
Analytics (Performance Management and Continuous Improvement)Why are things happening, what could happen next, how can we improve?
Building blocks of
SC Control Tower
SupplierManufacturing/
Material Operations
Customers /Distributors
Different types of
SC Control Towers
Transactional and
Operations
Systems(including Resolve Transport
Operations Solution)
Logistics Service
Providers
Logistics
102 July 2015
The reality of the implementation Why most Control Towers don’t meet up to scrutiny or fail
• Define a scope
– Operational vs. tactical or strategic
– Complexity can quickly override benefit
• Integration must be manageable and provide scalability
– End-to-end integration must be implemented in chunks
– Start somewhere and get real results as opposed to waiting for total
integration
– Seamless integration is an IT myth
– Limited visibility is often the cause of failure
• Authority
– Control tower can’t be an alert station or reporting function
– Historic reporting often dominates operational decision making
– Must have the authority to drive and change behaviour across different
functions and different organisations
– Quality and type of people becomes important (dominated by planning
people, Control Tower must have operational credibility)
– Along with business backing
112 July 2015
The reality of the implementation Why most Control Towers don’t meet up to scrutiny or fail
• Business rules
– Automated decision management needs to be kept to a realistic level
– System recommendations and human interaction
– Level of detail managed is important
• Control tower metrics
– Control tower must have its own set of metrics and should not be managed
on the metrics emerging from the processes that it is controlling
– How timeous was the event trigger
– How was well was the event managed at source as well as upstream
– Control Towers often become to planning centric as opposed to event
management centric
122 July 2015
Start with visibilityWilliam’s View On Implementation
• Typically control towers are born from planning systems
– Evolve into execution management systems with real time events
– Information is then passed based on these events
– This is then expanded until “end to end visibility of events is obtained”
• The problems are as follows – Scalability, ad hoc integration/integration without a plan will drive a spider
web view of connectivity (sustainability is questionable and certainly doesn’t
support agility)
– Manning control towers become the domain of propeller heads need the
correct mixture of operational people
– Function, becomes planning dominated as opposed to event and action
dominated – towers often don’t have authority beyond the realm of planning
– Rules determination, responsibilities should be considered when building
integration and visibility (at point of event generation it’s too late to consider
responsibilities)
– Advanced visibility will also focus event generation and rule determination
(fish where the fish are)
132 July 2015
Conclusion & Questions
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