Supply Chain Control Towers: Providing End-to-End Visibility

During the pandemic, everyone experienced supply chain disruptions in some way: the lack of toilet paper on grocery store shelves, a shortage of N95 masks and medical equipment, a scarcity of lumber, or even the scramble to find an adoptable puppy. COVID-19 brought into sharp focus the vulnerabilities in today’s global supply chains. When you combine those vulnerabilities with the Amazon Effect, geopolitical challenges, and the move to reshoring and nearshoring, business leaders are more aware than ever of the potential for disruptions in the supply chain.

On top of all of that, companies are now also experiencing decreasing customer loyalty along with increasing pressure to deliver quality products, services, and customer experiences at competitive prices. This confluence of circumstances makes it hyper-important that supply chain teams know what’s happening in their supply chain right now, why it’s happening, and how to address it quickly – before small disruptions become big expensive problems. 

Supply chain control towers provide the visibility that is essential for organizations that need to navigate this complexity.

A 2018 Statista survey found that the “biggest challenge for global supply chain executives was visibility.” And that was pre-pandemic.

As we emerge from the chaos of COVID-19, the need for end-to-end supply chain visibility to manage complex, modern networks is more critical than ever.

What is a supply chain control tower?

A supply chain control tower is a cloud-based solution that leverages advanced technologies – such as artificial intelligence (AI), machine learning, and the Internet of Things (IoT) – to proactively manage supply chains. 

Supply chain control towers offer end-to-end, real-time visibility across an organization’s entire network, including suppliers, manufacturers, and business partners. They allow organizations to manage what they cannot see, plan for unlimited unknown variations, and mitigate disruptions and risk before they become issues. In a world where historical data can no longer accurately predict current and future demand, and disruptions range from extreme weather to trade wars to tankers blocking the Suez Canal, that visibility and instant access to up-to-date information is essential for supply chain agility and resilience

Data is the lifeblood of control towers. These systems collect large amounts of up-to-the-minute data from across the supply chain to provide an accessible, usable 360-degree view of what’s happening anywhere in your supply chain in real time. That data is used to:

As supply chain control towers have evolved, they’ve broken down functional silos to allow organizations to connect to their entire supply network – enabling greater supply chain visibility, collaboration, and optimization. 

Control towers – yesterday and today

Supply chain control towers are not new, but in initial iterations they were siloed and linear, only offering insights into a specific area of operations such as transportation, logistics, or warehousing. They were usually on-premise software solutions with limited capabilities.  

Types of control towers included:

Analytical control towers offered analysis but no prescriptive guidance for how to address problems, for example. And transportation control towers tracked transportation-related data but nothing beyond that. Most of these control towers only offered visibility to immediate trading partners. But as the speed and complexity of supply chains accelerated, it became harder to organize and solve problems across siloed, legacy systems and control towers.

The rise of the cloud with its computational power and ability to ingest and analyze large amounts of data – combined with artificial intelligence, machine learning, IoT, and predictive and prescriptive supply chain analytics – changed all of that. Today’s supply chain control towers provide end-to-end visibility and deep context into all supply chain operations. 

As they evolve to encompass the entire supply chain, control towers are in high demand. According to Grandview Research, the global control tower market size was valued at USD$2.58B in 2018 and is expected to grow to $17.24B by 2027.

Benefits of a supply chain control tower

By providing end-to-end visibility, decision support, and the ability to course correct quickly, a supply chain control tower makes an organization’s supply chain more resilient. And a resilient supply chain can avoid the impact of disruptions or rapidly bounce back from disruptions when they do occur. The core benefits of a supply chain control tower include:

See, decide, act: Preventing supply chain disruptions

Supply chain control towers allow supply chain executives to see, decide, and act in real time.

Diagram of how a supply chain control tower works
Supply chain control tower process
  1. See: Identify causes of exceptions, trace problems to their origin, and see across silos, including ERP systems, warehouse management, and order management. 
  2. Decide: Use scenario-based modeling and supply chain analytics to create reactive and predictive alerts, assess the impact of exception conditions, and understand and prioritize issues as they arise. 
  3. Act: Drive better and faster decision-making based on an all-encompassing view of the data combined with granular visibility, which optimizes the supply chain.   

How do supply chain control towers work?

Everything that happens within a supply chain control tower relies on data – inputting usable data, analyzing it accurately and efficiently, presenting it in an actionable way, and leveraging it to drive informed, optimized decision-making. The better and more comprehensive the data your supply chain control tower uses, the better your results will be. 

A supply chain control tower:

Real-world supply chain control tower examples

Discover how Schnellecke Logistics SE, which keeps automotive supply chains running around the world with logistics services and supplies, achieved real-time transparency with a digital control tower.

Learn how Orkla Food Ingredients – a distributor of bakery and ice cream ingredients and plant-based products to 22 European countries – makes proactive supply chain planning decisions with in-depth, accurate insights.

Explore SAP supply chain visibility software

Maximize visibility, agility, and resilience with SAP Supply Chain Control Tower, part of SAP Integrated Business Planning.