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Global Supply Chain Control Towers

Achieving end-to-end Supply Chain Visibility

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GLOBAL
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CONTROL
TOWER
Prepared and edited by:
Gaurav Bhosle Capgemini Consulting India
Prashant Kumar Capgemini Consulting India
Belinda Griffin-Cryan Capgemini Consulting USA
Rob van Doesburg Capgemini Consulting Netherland
MarieAnne Sparks Capgemini Consulting France
Adrian Paton Capgemini Consulting UK
L
C o nte nts
4 Introduction

5 Current state and challenges in Supply Chain Visibility

8 Understanding Control Towers

12 Setting up a Control Tower


Introduction
Todays competitive business need to focus on creating strong
landscape and ever evolving end-to-end Supply Chain Visibility
customer demands are re-shaping capabilities.
traditional supply chains. First and
foremost, Globalization is increasing Supply Chain Visibility is the key
supply chain complexity, as enabler for managing a business
physical supply chains extend their both within the organizational
geographic scope in order to boundaries as well as across the
leverage low cost sourcing options boundaries. This visibility provides
and gain access to emerging speed, reliability and flexibility in
markets. The movement of order to gain a competitive
manufacturing facilities near to the advantage in the form of well
key markets is also increasing controlled and managed supply
supply chain complexity. And, chain functions. In response to the
outsourcing is taking the supply need for Supply Chain Visibility,
chain outside the four walls of an the leading Supply Chain Visibility
organization meaning collaboration principles are increasingly being
with partners becomes imperative embodied in Supply Chain Control
for supply chain effectiveness. Towers. A supply chain control
tower is a central hub with the
In addition to the complexities required technology, organization
brought by globalization there is and processes to capture and use
continuing pressure in most supply chain data to provide
organizations to increase revenues enhanced visibility for short and
and profit margins. These critical long term decision making that is
business challenges are driving the aligned with strategic objectives.
Current state and
challenges in Supply
Chain Visibility
Supply Chain Visibility Delivering Supply Chain Visibility
means measuring and controlling the
Supply Chain Visibility is all about effectiveness of the overall supply
how organizations capture and chain in four key areas (Figure 1-
interconnect data to extract critical Source: supply-chain-visibility.com):
supply chain execution information.
It provides a single view for 1 - agility, defined as the capacity
tracking information, material and/ to change supply chain processes,
or cost by monitoring key goals, partners, facilities, and other
dimensions in a global supply tangible aspects with minimal delay or
chain, such as inventory positions unwanted impact.
or shipment in-transit status and
real-time order movements in order 2 - resilience, which is defined as
to make informed and fact based the capacity to withstand unknown
decisions. and uncontrollable events with

Total Supply Chain Effectiveness

Cost Service

Agility Resilience Reliability Responsiveness

The Black Box of


Visibility Processes

Figure1: Supply Chain Effectiveness


minimal impact, to operations limited to one or two processes,
whether in terms of magnitude or such as either outbound or inbound
duration. logistics depending on the strategic
importance of one or the other. The
3 reliability, which measures tools focus on collecting data. The
the capacity to meet commitments capabilities of staff are very much
on quality, timeliness, cost, on operational level.
availability, service level, etc. which
is a basic requirement of supply Phase Two - The second phase
chain effectiveness. focuses on following the status of
shipments across multiple supply
4 responsiveness, defined as chain nodes and tracing the
the capacity to capture information problems occurring in between. The
and adapt to changes in the scope includes all the processes
environment including changes in related to inbound and outbound
demand, capacity, regulations, the logistics. The tools provide alerts
competitive environment, or any for exceptions and events. These
other aspect which has the potential applications are incorporated with
to impact business value. some basic reporting and analytics
capabilities and a knowledge bank
Phases in Supply Chain for decision support. The
Visibility Transformation organization and supporting staff
has capabilities to pro-actively act
Many organizations have already upon (potential) issues in the
implemented or are in the process supply chain.
of implementing Supply Chain
Visibility solutions. However, these Phase Three- The third
solutions reflect different levels of (advanced) phase, known as
maturity. The maturity level of a predictive visibility, focuses on self
particular visibility solution is learning algorithms to predict the
defined by the associated tools, potential problems and generate
processes and skills of the people alarms for upcoming events. These
involved and generally will fall into solutions are gaining popularity by
one of three phases. As might be providing proactive monitoring of
expected, each phase reflects a supply chain functions and helping
higher level of maturity than the with decision support systems. This
previous one. type of visibility is useful in the
short term, assuming the operations
Phase One - At the most provide the real time information.
rudimentary level, the focus is on Such visibility also enables
achieving operational level visibility improved planning capabilities and
on supply chain data such as allows shippers to make better
shipment and inventory status. The tactical or strategic decisions on
scope of the solution is usually optimization of the supply chain.
Leading Practices in Supply tools and solutions for Sarbanes-
Chain Visibility Oxley (SOX) risk mitigation and
disaster recovery in order to
Successful Supply Chain Visibility recover effectively from risk
solutions are deployed around five related events
leading practices which enable an
organization to achieve an end-to- These leading Supply Chain Visibility
end view of inbound and outbound practices are the key in gaining an
operations: efficient end-to-end supply chain
1. Create an Information Hub view. These can most effectively be
integrate and aggregate key achieved with an integrated Control
information from inside and Tower solution that includes having
outside the enterprise such as key the right people chosen and trained to
order, shipment, and inventory act upon the data provided. A large
information from all internal ERP, number of leading organizations have
TMS, WMS and other inventory adopted this approach and have been
planning systems able to successfully reap the benefits,
giving them more control over their
2. Track landed costs along the market reach.
chain reduce total landed costs
by tracking product, freight and
insurance costs as well as
integrating trade compliance
information such as duties, tax,
VAT and other governmental
charges

3. Manage trading partners with


scorecards use a repository of
supply chain data and develop
scorecards to manage supplier
compliance, or transportation
booking performance etc. to
continuously improve global
operations

4. Achieve organizational buy-in


gain the CFO and finance
organizations support by
extending the visibility solution to
include financial settlement and
financing triggers

5. Devise a risk management


framework configure visibility
Understanding
Control Towers
Control Towers are cross-divisional provide supply chain partners with a
organizations with system integrated high level of product visibility along
information hubs that provide the entire supply chain. This enables
Supply Chain Visibility. These hubs three levels of management control:
are used for gathering and distributing
information, and allow people trained  Strategic provides control over
to use these visibility capabilities to the design of the overall supply chain
detect and act on risks or network
opportunities more quickly. Control Tactical enables proactive
Towers are typically set-up to planning of procurement, operations
monitor, measure and manage and distribution according to market
transport and inventory movements demand
across the supply chain. Operational encompasses
various real time functionality
As shown in figure 2, Control towers including transportation management,
combine organizations (people), inventory tracking and exception
systems and processes in order to management

People
Provides expertise for planning,
execution and optimization of
product movements Le
s ve
es ra
roc ge
p te
n ch
ru no
d
an lo
gi
n es
s ig
De

Technology
Process
Incorporated and driven
by technology
Harmonized processes for managing Information repository with data analytics
control tower functions and decision support functionalities

Figure 2: Three Pillars of Control Towers


Getting the technology aspect right is order to final delivery is captured,
fundamental to the overall success of organized and stored in the tower.
the control tower concept. As shown In-transit inventory at the part/SKU
in figure 3, while setting up a Control level can also be captured by the
Tower, different systems are Control Tower.
integrated with each other with the This way a rich store of valuable
help of common middleware software supply chain information is created,
and all information is gathered at a enabling end-to-end control of a
centralized location. This information customer driven supply chain.
is then used for auditing, monitoring
and taking effective decisions. Figure 4 shows some of the additional
functionality that Control Towers
Every product ordered from a provide. Control Towers provide
supplier; every shipment shipped to a unprecedented supply chain flexibility
customer; every document created; for dynamic planning and routing.
every cost accrued; and every event Control Towers allow the generation
generated in the flow of product from of reports that shows the total landed

Organization
for monitoring
and decision
making

Set up of a
Virtual Network

r Centralized Co
owe information
nn
ec
Process l t ted
ro gathering and
Collaboration o nt to
Co
C monitoring ntr
and System d to ol
Integration cte tow
nne er
Co

Individual Set up a Middleware software/ system integration platform


System

ERP/TMS/WMS ERP/MES ERP/TMS/WMS

Individual Manufacturing Outbound


Inbound
Processes process process
process

Figure 3: Control tower Technology Approach


cost of every product ordered, roles at different levels in the
including a breakdown by cost, organization which work together
category and also showing how these towards capturing and monitoring the
costs have fluctuated over time. This process flows at each stage and
data can be used to make predictions standardizing operational practices.
at the daily operational level and to A Control Tower can be customized
predict supply chain costs. Control according to the specific organizations
Towers can also accurately predict needs in terms of their geographic
ETAs (Expected time of arrivals) reach, scope, functions, processes and
based on what is actually happening industry type.
in areas of the supply chain that are
not always so easy to see. In order to successfully implement a
Control Tower, however,
In order to provide this functionality organizations need to carefully think
Control Towers often utilize virtual through a few vital decisions when
network organizations. Consequently, setting-up their Control Tower. These
the establishment of a Control Tower decisions include:
usually results in the creation of new

Function of
Control Tower

Planning and Auditing and Event Decision


Forecasting
Routing Reporting Management making

Provides Helps in Auditing Make predictions Provides event Provides a one


unprecedented all the stages in at the daily management at all stop-shop solution
supply chain detail within the operational level, stages within the with centralized
flexibility for supply chain about ETAs supply chain accountability and
dynamic planning movement responsibility for
and routing Forecast Supply Provides cost, quality and
Generate a report chain cost and Warehouse Mgt, performance by
Provides GPS that shows the total demand Transport Mgt, Yard creating decision
tracking, Freight landed cost of every Mgt, Container Mgt making platform
Forwarding and product with the and billing and
inventory control breakdown invoicing

Figure 4: Function of Control Tower


Deciding on the goals and Deciding whether to outsource
objectives of Supply Chain the Control Tower operation or
Visibility manage it in-house
Identifying the list of functions,
processes or departments to be While some of these decisions may
monitored be complex, if done correctly, the
Determining the new resulting Control Tower will yield
organizational design important cross-functional benefits
Identifying which functions or that ultimately also benefit end
processes can be run customers and provide the
collaboratively or outsourced organization with a long-term
Deciding the technology solution competitive advantage. A
to be implemented and comprehensive list of these benefits
potentially selecting a is shown in the list below:
solution provider to build the
Control Tower

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t3FEVDFEOFUXPSLGBJMVSFT JODSFBTFEOFUXPSLWJTJCJMJUZBOESFTQPOTJWFOFTT
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t4ZOFSHJFTJOQSPDVSFNFOUUSBOTQPSUDBSSJFSTMFBEJOHUPSFEVDUJPOJO5SBOTQPSUBUJPO&YQFOTF
Inbound t3FEVDUJPOJOUPUBMMBOEFEDPTUTJODSFBTF0O5JNF*O'VMMEFMJWFSJFT
t)FMQTUPDIBOHFTPVSDJOHTUSBUFHJFT TIJGUTVQQMJFSBMMPDBUJPOT NPEJGZDPNNFSDJBMUFSNT 
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JOWFOUPSZMFWFMTBOEUJNFMZBOEDPNQMFUFNBOBHFNFOUJOGPSNBUJPO

t*NQSPWFEMPBEFDJFODZJO0VUCPVOE
Outbound t*NQSPWFUSBOTQPSUFDJFODZVTJOHCFTUJODMBTTDBSSJFSTBOESFEFTJHOJOHUSBOTQPSUTPMVUJPOT
t"CJMJUZUPQSFEJDUSJHIU&5"GPSDVTUPNFST
Setting up a Control
Tower
In order to successfully set-up a setting-up the Control Tower. This
Control Tower and ultimately achieve stage usually lasts for 8 to 12 weeks.
the desired visibility, companies need
to follow a proven approach. A two Implementation stage
stage methodology to set-up an end-to-
end Control Tower solution that can During the Implementation stage, the
be tailored to an organizations specific high level Control Tower architecture
scope, functions, processes, industries is designed. The most suitable
and geographic needs, such as middleware software solution to be
Capgeminis Control Tower approach implemented is identified which
(as shown in figure 5), has proven very considers the current system set-up
useful in effectively setting up Control and visibility need. The selected
Towers. Such an approach usually solution should also help the
consists of two distinct stages a organization to integrate all its
(1) Strategic stage and an processes and capture the information
(2) Implementation stage. centrally. Following approval of the
selected solution, end-to-end system
Strategic stage integration proceeds on a phase by
phase basis. Once the systems are
The Strategic stage, generally entails completely integrated, testing is done
assessing the As-Is business, capturing and a Business Continuity Plan to
the Supply Chain Visibility needs and support any system failure is
evaluating the benefits (including developed.
financial) which a control tower could Once the Control Tower network is
provide. Areas for collaboration with validated, different roles in the virtual
subcontractors, vendors and partners Control Tower organization are created
within the value chain are identified. and developed. Training in how to
Once the scope of the Control Tower generate and interpret different kinds
set-up is finalized, it is important to of reports and track the movements
understand existing internal systems within the supply chain is conducted
and the systems of identified and Control Tower managers are
collaboration partners. After gaining a coached in how to conduct process
thorough understanding of the level auditing, planning and
requirements, a high-level To-Be predictions based on the available
concept for the organization, processes, information. Finally a regular
in/outsourcing and systems is monitoring mechanism at each stage
designed. The plan is then shared and within the supply chain flow of the
signed off with the key stakeholders, organization is established. This stage
along with the detailed roadmap for takes 6 to 12 months.
.
Stage 1 Stage 2: Implementation
8 to 12 weeks 6 to 12 weeks

Stage Strategy Design Implement Run

Assess As-Is current Design of organization, Implement organization, Run and/or optimize
supply chain visibility, processes, systems to processes, systems to organization, processes,
Objective improvement areas improve SC visibility improve SC visibility systems to improve
and way forward SC visibility

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Figure 5: Capgeminis methodology to set-up a Control Tower


Case study: Samsung achieves improved visibility through
Control Tower implementation
Samsung, with a presence in 24 locations and with more than 11,000 staff in Europe,
has outsourced warehouse and distribution activities to multiple logistic service
providers. The fragmented landscape of these LSPs added complexity to the supply
chain optimization effort. Capgemini helped Samsung to develop end-to-end supply
chain control mechanisms to improve efficiency and reduce costs by using best-in-class
carriers and reduce dependence on their LSPs. Moreover, Capgemini developed
Samsungs capabilities to manage activities on the tactical level (e.g. carrier
management, high level planning, contracting) by deploying a Control Tower solution.

An integrated organization was implemented for planning and controlling the IT


product flow from Port-to-Customer. A buying function for procurement and
contract management of logistics and warehousing services was developed. A new
administrative organization was designed in such a way that all required cost data
is captured automatically and can be reported without manual intervention and
delays. Additionally, carrier (selection, evaluation, invoicing) and inbound
(terminal planning, customs status) integration was achieved.

Visibility tool

Control Tower
Management

Order control/CS Transport planning Control Development Operations inbound Cost control
Team leader Team leader Team leader Team leader team leader

Region1 Region1 Warehouse Quality Inbound


Control

Logistic
Region2 Region2 POD
Engineering

Region3 Region3 Claims L2support

Carrier
Management

Control Tower Organization

The solution deployed by Capgemini is helping Samsung to build an efficient and


integrated organization to increase load efficiency, improve tracking and customer
service and enhance transport efficiency using best-in-class carriers and
redesigned transport solutions.
About Capgemini Consulting and Capgemini

Capgemini Consulting Capgemini, one of the worlds foremost


is the Global Strategy and providers of consulting, technology and
Transformation Consulting brand of outsourcing services, enables its clients
the Capgemini Group, specializing in to transform and perform through
advising and supporting organizations technologies. Capgemini provides its
in transforming their business, clients with insights and capabilities that
from the development of innovative boost their freedom to achieve superior
strategy through to execution, with a results through a unique way of
consistent focus on sustainable results. working, the Collaborative Business
Capgemini Consulting proposes to ExperienceTM. The Group relies on its
leading companies and governments a global delivery model called
fresh approach which uses innovative Rightshore, which aims to get the right
methods, technology and the talents of balance of the best talent from multiple
over 3,600 consultants worldwide. locations, working as one team to create
and deliver the optimum solution for
For more information: clients. Present in 40 countries,
www.capgemini.com/consulting Capgemini reported 2010 global
revenues of EUR 8.7 billion and employs
over 112,000 people worldwide.

More information is available at


Rightshore is a trademark belonging to
www.capgemini.com.
Capgemini
Rob van Doesburg
Global Lead Logistics and Fulfillment GTM
Tel.: +31 30 689 8514
Mob.: +31 6 22 667 910
Email: rob.van.doesburg@capgemini.com
www.capgeminiconsulting.nl
Capgemini Consulting - May 2011

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The information contained in this document is proprietary. Copyright 2011 Capgemini. All rights reserved.