INFO~TECH RESEARCH GROUP

Harmonizing Complexity: Control Tower Integration

Providing manufacturers with real-time integrated supply chain views for quick decision-making.

Analyst Perspective

Control tower implementation and integration is highly complex.

In this era of Exponential IT, industries and businesses are undergoing unparalleled change. The manufacturing industry faces a formidable challenge in meeting customer demands characterized by increased technology adoption, shorter lead times, greater transparency requirements, and decreased tolerance.

The technology ecosystems that manufacturing businesses can adopt are drastically changing, and the new solutions that they are adopting call for significantly different skill sets.

The manufacturing industry has traditionally held onto legacy equipment as long as it continued to make money without being exposed to excessive risk. With the market shifting toward a cloud model and integration with legacy on-premises solutions becoming less viable, it is no longer practical to keep legacy equipment in place.

Because the supply chain and manufacturing environments are distinct, their implementations and integrations are extremely complex and involve many unknowns.

Kevin Tucker Principal Research & Advisory Director, Industry Manufacturing, Supply Chain, Logistics, and Transportation Info-Tech Research Group

Executive Summary

Your Challenge

Control towers require IT and OT collaborate, but many companies still run in silos and risk hampering their integration efforts with poor communications.

Ensuring interoperability across devices becomes more complex when data from multiple IIoT, supervisory control and data acquisition (SCADA), and control systems must be integrated across numerous communication protocols and formats.

Satisfying ever-increasing compliance and regulatory requirements is getting harder due to legacy systems and complicated industrial supply chain operations involving numerous suppliers, manufacturers, and distribution networks.

Common Obstacle

Achieving low-latency data processing and dependable communications can be difficult in industrial environments that require real-time data integration for monitoring and control.

Reliable connectivity and data transmission can be unpredictable in industrial environments due to their inherently complex and distributed network architectures.

Sourcing and Integrating dependable sensors, actuators, and other IIoT hardware can be challenging because of harsh and complex industrial conditions.

Skilled specialists are hard to find and retain.

Info-Tech’s Approach

Use a phased approach to implement your control tower integration that considers all potential data points, types, and security protocols.

Use Info-Tech’s tools to help evaluate your current- state situation and ensure that you’ve covered everything.

Adopt a unified supply chain approach that considers a holistically interconnected environment for end-to-end data capture and real-time decision-making.

Info-Tech works closely with its customers to provide strategic and tactical decision-making advisory services.

Info-Tech Insight

Supply chain control tower (SCCT) implementation starts here. Once you’ve selected the right SCCT for your business, use this report to implement and integrate it. Your control tower will handle the complexity, volatility, disruption, and elevated customer demands that necessitate real-time, data-driven decision-making.

Supply chain control tower defined

A control tower provides end-to-end information about product movements.

Data collection occurs across all supply chain stages through a centralized hub equipped with the necessary organizational tools, technological capabilities, and procedures to provide visibility and transparency throughout supply chain execution.

Data integration leads to better decision-making that supports strategic goals and guarantees end-to-end visibility.

Connectivity across people, process, and technology improves visibility with a 360-degree view of all supply chain decision touchpoints.

Enabling an integrated view of supply chain processes appears straightforward, but the endeavor is complicated by the potential mix of proprietary, legacy, and modern solutions.

The control tower market is growing

The control tower market is expected to see rapid and continuous growth over the next decade.

Ability to manage large volumes of data across modern and legacy systems produced by the value chain is leading to the growth of Control Towers

Ability to integrate massive data sets and derive in-depth insights is driving regional growth for Control Tower adoption in businesses, even though North America currently holds the largest share of the global Control Tower market.

Streamlined operations, ability to scale and improved productivity are key benefits driving the growth of Control Towers.

When you go from static to real-time data decision-making, integration is very challenging to accomplish but the benefits are enormous.

Compound Annual Growth Rate (CAGR)

17.5% 2022-2032 (Source: FMI, 2022)

Risk and resiliency should be front of mind

The need for control towers has accelerated due to supply chain risk:

Production delays and supply chain disruptions have created a perfect storm necessitating the significant improvement of risk management and resiliency throughout the entire supply chain.

High interest rates, inflationary pressures, erratic consumer demand, and supply chain disruptions define the current state of the transportation sector. As a result, businesses are continuously looking for methods to improve their efficiency, speed, and dependability across all aspects of their production and supply chain services.

Many businesses still carry out most of their operations manually, but control tower can automate decision-making and boost resilience.

“Our customers are interested in value-driven supply chain solutions which are often rooted in how we can help them better manage risk and strengthen resilience.” (Jason Findlan, Managing Partner, CHAINWISE)

Leverage your technical debt for transformation

Technical debt is a tool that must be used to break through technological entanglement and create the Agility to form an integrated control tower:

Technical debt can be used for Agility. Businesses must be willing to take on short-term technical debt to implement and improve digital systems to accelerate onboarding and integrations that will increase efficiency and transparency.

Software AG found that 88% of organizations have become more aware of their technical debt since the pandemic (2022). It caused an acceleration of digital transformation that has continued well after COVID-19 into an increasingly normal state of business for the broader markets. Completed transformations reduce technical debt for the long haul.

Although technical debt connotes a negative business position, the Agility it may provide has the potential for a high return on investment.

“Our industry commonly has a lot of technical debt – even progressive and influential business stakeholders have challenges breaking through entanglement of current technologies and meeting project hurdle thresholds on payback timing.” (Jamie Hornstein, NA CIO, Werner Co.)

Control towers produce tangible benefits

Results of a supply chain control tower pilot project.

Demand-planning results

• 30% Reduction in days in inventory
• 5% Increase in top-selling product availability

Distribution results

• 9% Increase in top-selling product availability
• 90% Reduction in emergency orders
• 30% Reduction in delivery time

(Source: Bain & Company, 2019)

How do you know if you need an integrated control tower?

Perform an inward assessment. Do you relate to the following statements?

• You are experiencing blind spots such as network bottlenecks across the supply chain.
• You suffer recurring supply chain shortages and doesn’t have root cause analysis capabilities or data from all touchpoints.
• Real-time data is lacking due to disparate systems, and you can’t respond to disruptions as they happen.
• Your supply chain can’t respond to changes in customer preferences.

Not every integration point of a control tower must be completed at once; rather, correct execution calls for a methodical, phased approach.

Integrated supply chain control towers produce five key benefits for stakeholders

Only when all factors are considered do end-to-end benefits arise.

Benefits

1. Collaboration

   Collaboration dismantles information silos and facilitates real-time information sharing among partners throughout the supply chain’s entirety.

2. Strategic Planning

   Strategic planning promotes risk management and overall supply chain effectiveness.

3. Agility

   Quick coordination makes Agile responses possible, enabling supply chain participants to respond swiftly to disruptions.

4. Optimized Inventory

   Stock levels, cost-benefit ratios, and service levels can be adjusted by identifying waste and excess inventory throughout the network.

5. Forecasting

   Forecasting gives businesses end-to-end visibility for predictive analytics and optimization that informs decision-making.

Evaluate your supply chain challenges and corrective actions

Challenges

• Labor Shortages

  The ongoing labor shortage in logistics and transportation, which was brought on by the pandemic and persists today, is a concern for supply chain executives. Companies are struggling to find and retain qualified workers because many of them are quitting their jobs early, going on strike, or choosing to work remotely.

• Rising Costs

  Rate pressures, fuel and energy costs, and increased transparency and regulations contribute to rising costs.

• Economic Instability

  While most nations have seen inflation slow, some are seeing bankruptcy increase. The IMF anticipates that most nations won't reach their target inflation rate until 2025. There is serious concern for the global economy due to the declining confidence in Chinese economic investment (2023).

• Lack of Visibility

  During disruptions, businesses can’t react quickly because they can’t see beyond their Tier 1 suppliers or access the disruption’s root cause data.

Corrective Actions

• Invest in Technology and Automation

  With all the recent market upheavals, technology has taken center stage once again, and thanks to Exponential IT, it is now more visible than ever. By utilizing cutting-edge capabilities like AI and machine learning (ML), technology helps businesses reduce labor costs while increasing productivity and smart decision-making.

• Emphasize Data-Driven Decision-Making

  Organization-wide data integrations must be implemented by businesses looking to revamp their supply chain decision-making processes. The data must be cleaned before it can be considered reliable.

• Build Strong Partnerships

  Establishing robust alliances with trading partners facilitates the development of Agile and dependable business relationships.

• Focus on Customer Centricity

  To effectively respond to customers and maintain their satisfaction, customer-centric companies must obtain visibility into and an understanding of the products within their supply chains.

Vertical integration solves multiple problems

Walmart and Proctor & Gamble’s partnership is a good example of how tight vertical integration with suppliers offers adaptability and decreases waste.

Supply

• Order Changes

  Changes to customer behavior and market shifts create issues for retailers and producers. The increase in omnichannel services has made these issues more complex.

• On-Time Delivery

  A late delivery is an expensive problem that can be disastrous if the customer doesn’t accept it.

• Conflicting Supplier Obligations

  Members of the supply chain want to process as many orders as possible while maintaining high levels of customer satisfaction. Integration provides end-to-end visibility that prevents miscommunication and overlapping supplier obligations.

• Substantive and Authentic Relationships

  Tight relationships across the supplier and customer ecosystem build trust and remove the potential for secrecy and opposition. In unintegrated supply chains, adversarial relationships are common due to their transactional nature and lack of rich information sharing.

Production

• Worker Availability

  Labor issues are a fact of life in production. Large manufacturing and logistics facilities may have higher levels of turnover for unexpected reasons including illnesses, strikes, and departures. Integration is more critical in automated environments because their fewer workers are highly skilled and difficult to replace at the last minute.

• Production Facility Problems

  Whether it’s a single facility or several facilities that encounter problems, an integrated supply chain shares information transparently across their vertical network. If your business uses Lean manufacturing principles, information sharing becomes vitally important to avoid losses due to obsolescence, stockouts, and overstocking.

• Synchronization of Prototyping and Production

  Prototyping and production operations are often run in the same facility using the same equipment. Whether it’s the fabrication, kitting, assembly, or finished goods inventory processes, an integrated supply chain solution enables visibility and traceability from production to customer.

Supply chain control tower functional integration

Technology and processes will vary, but all businesses will need to capture and manage their data efficiently.

Control tower integration services drive overall capabilities

Info-Tech Insight

Integration services fuel the decision-making power of the supply chain control tower.

The control tower integrated information flow

Use virtual twin technology for new designs and to validate the first run of production.

Conduct a control tower functional analysis

Consider where there are risks to a successful control tower implementation.

A supply chain control tower is adaptive

A control tower captures and manages data for any process no matter how slow or fast.

The control tower provides real-time status visibility at all points within these process flows, thus ensuring on-time processing and delivery.

Create an integration team charter

1-3 hours

Input: Feedback from across the business, Support from all stakeholders

Output: An Integration Committee Charter that lays the ground rules for the team.

Materials: Supply Chain Control Tower Integration Team Charter, Optional: Build Your Enterprise Application Implementation Playbook

Participants: Control tower integration leadership, Key control tower integration subject matter experts

Use Info-Tech’s Supply Chain Control Tower Integration Team Charter to create a thorough plan for conducting the initiative.

Instructions:

1. Document the key goals, objectives, and benefits of implementing control tower integration.
2. Define the applicable assumptions and constraints of the initiative.
3. Base the structure of the initiative on what’s in and out of scope, key milestones, risks and contingencies, and interdependencies.
4. Define the team structure and any necessary sign-offs.

Tip: The team members may not agree on everything, but they must all support the final decision and ensure everything is clearly communicated to stakeholders.

Download the Supply Chain Control Tower Integration Team Charter

Download the Build Your Enterprise Application Implementation Playbook

Plan for a phased implementation

1. Phase 1: Solution Selection
2. Phase 2: Formation and Planning
3. Phase 3: Training and Implementation
4. Phase 4: Pilot Testing and Going Live
5. Phase 5: Continuous Improvement

Download the Build Your Enterprise Application Implementation Playbook

High-level implementation stages

Some activities may be run in parallel as you progress through the stages.

1. Solution Selection

   • Capture requirements
   • Conduct needs assessment
   • Conduct technology assessment
   • Review vendors
   • Select vendor
   • Allocate budget
   • Allocate resources

2. Formation & Planning

   • Develop project charter
   • Assemble diverse team
   • Develop integration plan
   • Create data management strategy
   • Initiate documentation
   • Conduct risk assessment

3. Training & Implementation

   • Train the team
   • Deploy technology
   • Conduct data integration
   • Maintain configuration management
   • Conduct customizations
   • Perform operational training
   • Perform unit testing and risk management

4. Testing & Going Live

   • Perform conference room pilot testing
   • Manage resources and scaling
   • Document the process
   • Define success metrics
   • Validate sustainability process
   • Communicate with stakeholders

5. Continuous Improvement

   • Monitor implementation
   • Perform change management
   • Review feedback and improve
   • Upscale
   • Provide technical support
   • Provide operational support

Control tower implementation and integration involves a wide range of complex activities that vary slightly for every business and touchpoint within the supply chain network. It’s crucial to get the formation and planning right from the start.