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Control Towers are OK, But You Can Do Better

Recently the notion of “Control Tower” has become very popular in supply chain planning. They remind me of factory Gantt charts (or Leitstand, as it was known in Germany). Not unlike Gantt charts control towers show you information but not as much help to solve the issues. The user will have to come up with a solution. Just like airports, as soon as something goes wrong, control tower shuts down the operations and people would have to scramble to see what the solution is. In a short time period, people’s ability to come up with an optimal solution is very limited. Systems can do a lot better and faster in re-planning in real-time and continue the operations. But this requires Sales & Operations Execution (S&OE) capability.

Furthermore, Control Towers only respond to what they see not to the issues that are developing but not appearing on their “radar” screen. In a typical supply chain, things change all the time: the mix pf products, new products, demand variations during certain parts of the year and so on. Control towers do the same procedure no matter what the intensity of the traffic is causing delays when there is bad weather or an emergency.  Algorithmic planning allows for changes in strategy if the patterns change. A simple example is changing the mix of products made at different locations or sourcing from different manufacturing sites to get higher productivity and on-time performance; or dynamically changing the safety levels of inventory as the demand patterns change over time.

Lastly, a control tower does not have any control over how smooth the ride on the airplane is or how comfortable the landing could be. The shock absorbers do that! In supply chains, S&OE provides the smooth operations and reacts to the execution issues whether it has to do with late arrival of a material, factory going down, or simply an equipment malfunctioning. Imagine the truck is late to deliver the parts that are needed today. Seriously, you have time to perform what-if  while the entire operation is idle and people are waiting to figure out what to do?! S&OE delivers the answer in seconds AND tells you what the financial consequences of the alternatives are.

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