The Supply Chain Control Tower

Fixing age-old issues with modern tools and techniques

The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

The world today is more connected than What does that mean for supply chain The DSN embeds digital functionality
ever before. Indeed, the Digital Revolution executives responsible for solving a throughout the supply chain, from
brings with it innovative and disruptive multitude of challenges that may arise on development to delivery, to allow the
technologies that have the potential to any given day? Many are managing within physical world and digital world to
change the way business is done—and the the constraints of a traditional supply chain communicate and collaborate. By translating
way the world interacts. Yet despite the model that moves information along with physical events into digital information,
promise of digital to positively transform raw materials and semi-finished goods companies generate data. Actionable
economies, business, and society, the reality from one end of the production system to insights from visualizing and analyzing these
is that most organizations are far from the other. Deloitte is helping organizations data are used to transform the physical
harnessing this potential. In fact, just 20.7 to incrementally begin taking advantage world. These actions, in turn, yield benefits
percent of manufacturing organizations of the benefits digital offers with a flexible, in terms of increased efficiency, quality,
surveyed rated themselves as “highly interconnected supply chain solution called customer experience, and revenue growth
prepared” to address the emerging business digital supply networks (DSNs). (figure 1).
models the Fourth Industrial Revolution
brings.1

Figure 1. Evolving the supply chain to a digital supply network

Traditional supply chain Digital supply networks

Cognitive planning
Synchronized
planning
Quality sensing Connected
“Why do Dynamic customer and
I have fulfillment aftermarket
“Where so much “When is my
is my “Will my order be fulfilled?” inventory of product being
shipment?” this SKU?” delivered?”

Digital
core

Develop Plan Source Make Deliver Support

“What
happened Digital Smart factory
“Am I using my supplies “What is the condition of
to this
effectively?” the product at delivery?” development
batch after
the quality
hold?” Intelligent
3-D printing supply

Sensor-driven replenishment

1. “Distinctive traits of digital frontrunners in manufacturing: Embracing the fourth industrial revolution,” Deloitte Insights, 2018,
https://www2.deloitte.com/insights/us/en/focus/industry-4-0/digital-leaders-in-manufacturing-fourth-industrial-revolution.html. 1
The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

Enter the
DSN Control Tower

Control Tower is a set of tools and

techniques that allow executives to
proactively manage their end-to-end
supply chains in real time and achieve new The 2018 Deloitte Industry 4.0
efficiencies through connected visibility,
proactive exception management, and investment survey found that when
predictive insights. This targeted approach
offers a way to recognize the extraordinary
executives were asked, “what functions
cases and identify the right triage and are you prioritizing for future [digital]
solutions to drive the maximum value
without a large-scale implementation. investment?” the supply chain emerged
Control Tower also allows supply chain
executives to narrow their scope and
as the top overall answer, with 62%
focus on the few areas that are causing overall responding―ahead of planning,
the majority of issues, while the rest of the
supply chain can continue functioning, product design, and substantially ahead
business as usual.
of smart factories.2
Traditional supply chain teams use software
and processes to review every single But despite the clear desire to prioritize
transaction, which can be time consuming
and, in the end, not effective. Instead,
the digital supply chain, only 6% of
Control Tower collects and analyzes supply chain leaders feel that they have
multiple sources of data and provides teams
with visibility, root cause identification, the visibility they need.3
prediction and alerts, response agility and
performance management (figure 2).

Figure 2. Legacy solutions vs. Control Tower

Off-the-shelf Cognitive technologies

technology that target a specific
packages business problem

Creativity to rapidly
Highly optimized
deal with unique cases
(lean six sigma)
and the unexpected

Structured to
Cross-functional
deal with
in nature
repetitive cases

2. “The supply chain paradox: High priority, low stakeholder engagement,” Deloitte Insights, 2018,
https://www2.deloitte.com/insights/us/en/focus/industry-4-0/challenges-on-path-to-digital-
transformation/supply-chain-paradox.html.

3. “Embracing a digital future: How manufacturers can unlock the transformative benefits for digital supply
networks,” MAPI and Deloitte Insights, 2018, https://www2.deloitte.com/content/dam/insights/us/
articles/4181_embracing-a-digital-future/embracing-a-digital-future.pdf. 2
The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

Three critical inputs are needed to Control Tower

establish a well-functioning Control Tower:
data, analytics and visualization, and
user-based insights.

The first input is data—there’s no doubt

that a plethora of data exists. Despite the
collective understanding of the value of
data, and the desire to use it, there can be
a lack of understanding of how to use it to
extract meaningful insights. Control Tower
can leverage an organization’s existing data
and merge it with new insights from internal
systems, sensors, Internet of Things (IoT),
connected devices, partner and supplier
data―even external data, such as weather,
geopolitical risk sensing, and more.
Data Analytics and visualization
Once data sources have been identified, An insights and decision-support Advanced analytics provide a holistic view of supply
the next input is analytics and visualization. platform that monitors transactional chain information through data consolidation and
Data have no real value without the right data from internal and external sources help identify risks; high risks identified are then
techniques and analysis to generate insights. and automatically separates issues analyzed in detail using case level reports to uncover
Traditional supply chain professionals often from the mass specific issues
waste time reviewing every piece of data
looking for a needle in a haystack. Instead,
Control Tower uses exception-based
handling to analytically detect anomalies
and extraordinary cases that require action,
allowing teams to focus on solving tangible
business challenges. By using machine
learning and unique algorithms to sift
through data, Control Tower can quickly spot
issues, identify the root cause, and route
alerts to business leaders to solve issues
quickly and effectively.

Lastly, a crucial component that unlocks

the incremental value is user-based
insights. When issues are identified, those
alerts and insights must be delivered in
the right context to the right individuals
to drive improved business outcomes.
From the start of implementation, a user
experience (UX) design team is engaged to
develop the right form factor to meet the
needs of the unique persona that requires
specific insights at that point in time. Every
insight, alert, and message is delivered
through persona-based design, enabling User-based insights focused on
personalized visualizations, insights, and solving real business issues
views for specific functions and roles. Business insights can be leveraged to unlock value
across the organization and develop data-driven
business models

3
The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

Getting started Reaping the benefits: In an increasingly connected, digital world,

with Control Tower Clear visibility ahead it is easier than ever before to implement
stand-alone tools and systems intended to
Developing and enabling a Control Tower Control Tower is scalable and adaptable. It
enhance the supply chain. Control Tower
capability can take different forms, can be used to address many issues within
enables organizations to distinguish the
depending on the organization and inherent the supply chain to deliver tangible benefits:
critical issues from business-as-usual
business issues. It is an iterative process increased revenue, better margins, asset
through an insights and decision-
that begins with the identification of a efficiency, enhanced risk mitigation, and
support platform to significantly impact
problem that needs to be solved and the increased responsiveness. Additionally,
performance. Instead of just talking about
business outcomes desired. There are some developing a Control Tower can offer many
digitalization or embarking on large-scale
clear signals that can indicate potential indirect benefits that help improve the
transformation, organizations can take
benefits of a Control Tower: efficacy of a supply chain organization—
action today by developing a Control Tower
helping organizations understand their
•• Lack of visibility in the supply chain capability, harnessing the power of data to
data sources and shining a light on potential
gain clear visibility and, in the process, drive
•• Highly complex system/data landscape process improvements.
real business results.
•• Frustration about next-gen capabilities

•• “Firefighting” in the organization

•• High amount of errors in processes

•• Customer sentiment not matching

internal metrics

•• Lack of end-to-end orchestration

•• Difficulty to generate insights

from data sets

•• Heavily relying on external partners

Focus on the exceptions in

Control Tower framework the bulk of all transactions
Real-time connectivity, no
data-dumps or lagging
indicators and 24/7 always-on

Continuously track the signals of a

specific business issue from its symptom
to its root cause
Delivering data-driven
actionable insights that
are new and can only be
achieved using analytics

Based on a Use Case with

data, analytical solutions,
and processes tailored to that

4
The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

Control Tower in action

Automotive
The business challenge
An automotive company was experiencing an increasing number
of quality, warranty, and safety issues. In addition, more than 10
systems were used to store and analyze data and run the business.
The company relied on “firefighting” and reactive identification to
manage the issues.

The solution
A Control Tower solution was deployed, using “fault codes” from
sensors on vehicles to predict component failures. The solution
applied natural language processing, machine learning, and statistics
to identify issues from unstructured data.

The impact
•• Enabled rapid detection and prioritization of vehicle safety issues

•• Saved $200 million in annual recall-related costs

•• Provided more accurate scoping of recalls, which could lead to

significant cost savings

Aerospace
The business challenge
A global airline suffered from poor service levels for critical parts
and had an excessive amount of inventory supply. Processes were
not efficient and parts were slow to move across the network.
In addition, they had low to no visibility into external vendor and
supplier performance.

The solution
Control Tower was implemented to help right-size the inventory and
improve the service for critical parts. The solution provided real-time
insights into operations, actionable root-causing capabilities, and
informed decision making for everyone from executive leadership to
shop floor employees.

The impact
•• Reduced instances of out-of-service aircraft

•• Increased part movement velocity

Supplier Warehousing Inventory AOG

Procurement Maintenance
performance & logistics planning management

Repair vendor data Financial data Part movement data On-hand inventory data
Procurement Warehouse Parts usage data AOG
data productivity data resolution data
5
The Supply Chain Control Tower | Fixing age-old issues with modern tools and techniques

Manufacturing
The business challenge
An industrial equipment manufacturer faced incoming material
quality issues, which were causing costly assembly line shutdowns.
This manufacturer, which had thousands of commodities, suppliers,
and plants, had siloed views about quality and safety. As such,
quality and safety personnel were in a never-ending cycle, trying to
address the issues.

The solution
Control Tower was implemented with a focus on improving process
efficiency.

The impact
•• Fewer assembly line disruptions

•• Increased issue resolution

•• Decreased warranty and repair costs

Let’s talk
Peter Heron Tom Walsh Brian Umbenhauer
Principal Principal Principal
Deloitte Consulting LLP Deloitte Consulting LLP Industrial Products &
[email protected] [email protected] Construction Consulting Lead
Deloitte Consulting LLP
[email protected]

Contributors
Neil Kulkarni Scott Pobiner Michael Tong Maddie Wasser
Manager Specialist Leader Manager Senior Consultant
Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP Deloitte Consulting LLP
[email protected] [email protected] [email protected] [email protected]

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