CGN Edge Blog

Control Tower 4.0: Transforming Reactive to Proactive Supply Chains

Feb 15, 2019 3:39:59 PM Posted by: Nandika Gogineni

By Nandika Gogineni & Sampath Chintagari

Proactive Supply Chain Design – Why it's a need in the 11th hour

"Acclimation to market dynamics will make any organization a dominant player in the market place."

Unfortunately, nearly 70% of companies are still operating in reactive/anticipatory environments centered around balancing supply & demand (Gartner Report, 2018). A reactive supply chain often fails to address uncertainty, complexity and market risks. Key challenges with reactive supply chains are as follows:

  • Lack of inventory visibility across the value chain
  • Inadequacy of horizontal integration
  • Inability to align supply and demand
  • Limited agility - unable to quickly react to demand shifts
  • Lack of visibility to capacity and proper allocation
  • Inefficient analytical capabilities - data capture to assess & act based on real time performance

As supply chains become longer, dynamic, and increasingly complex, organizations struggle to cope with market uncertainties and are compelled to build proactive & agile supply chains. These proactive models help organizations attain supply chain maturity through deeper collaboration and orchestration. Collaboration involves horizontal integration of suppliers and customers. Orchestration involves connection within the organization to act ahead of time. An essential step in this process, as part of the transformation to a proactive supply chain, is to evaluate the maturity of the existing supply chain.

Understanding Supply Chain Maturity

In proactive supply chains “organizations have the ability to derive better results through their processes across the product life cycle" (Kalinowski, 2014).  Typically, organizations tend to meet their strategic goals by establishing a clear agile "one-business" approach. To accomplish this, an elemental framework is shown as following:

  • Define Supply Chain Vision: Proactive & agile supply chain
  • Access Supply Chain Maturity: Understand maturity across plan / source / make / delivery / serve
  • Build Roadmap to Vision: Deployment strategy based on maturity to meet vision

The 4 stages of supply chain maturity that convert a supply chain from reactive to proactive, with corresponding market response time (MRT), are shown below (MIT forum for supply chain innovation):

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Attaining Supply Chain Maturity with Control Tower 4.0

Control Tower 4.0 (CT 4.0) is an intelligent digital control tower, which monitors, manages, enables decisions and execution across value chain to optimize the entire end-to-end (E2E) network. CT 4.0 is equipped with collaborative information sharing, self-correcting supply chains, and machine learning.

 Potential Keys to the Intelligent Control Tower:

  • Enhanced visibility to avoid disruption from unexpected events
  • Standards for functional excellence: Cross functional decision making - cognitive analytics
  • Spans vertical silos to horizontal processes
  • Value creation across all steps in supply chain

Supply chains with CT 4.0 offer a single version of truth across functional boundaries, suppliers, manufacturers, transportation carriers, and third-party logistics providers. This is attained through improved communication and collaboration; achieving the often coveted agile, resilient, and responsive supply chain.

CGN Solution and Key Capabilities

At CGN Global, we provide CT 4.0, a digital intelligent platform that connects informational & transaction-based data across various work-streams, providing a single user interface to exhibit E2E supply chain visibility. This provides stakeholders with the ability to view and act swiftly during market shifts and allow organizations to accelerate their economic metabolism. CGN's CT 4.0 model is shown below:

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For more analysis on technolgy, artificial intelligence, and how it is changing the shape of the modern supply chain check out our recent Crain's Chicago Business roundtable discussion here.