Supply Chain Control Tower: The Next Frontier To Deliver AI And Digital Twins

Manoj Gujarathi, Head of Software Product Management at Dematic.

The supply chain is no longer a chain. The linearity in our traditional chain network has been upended by advanced technology and autonomous thinking. Businesses in all industries have realized that they must use this new technology to make the most of their data.

One approach to this new technology is the implementation of a supply chain control tower. This control tower can set the stage for supply chain efficiency and act as a competitive differentiator in the industry as a whole. With a control tower, businesses can harness better business analysis and make better decisions based on data from their own sources, as well as from third-party sources. A control tower can also help businesses reduce their dependency on constantly changing labor forces.

What Is A Supply Chain Control Tower?

A control tower can oversee a large spectrum of supply chain operations, from supplier management to last-mile delivery. It can provide insights on supplier and partner management, identify risks in your network and help leaders respond to disruptions and mitigate interruptions. Its machine-driven decisions and analyses can help alleviate decision fatigue.

The term "control tower" has been widely used, especially recently, due to its use of real-time visibility and data harmonization. That said, it means different things to different businesses. A control tower has two primary functions: It mines data, and then it takes action based on that data. In any given supply chain, the distribution center network link is closest to the customer. Thus, the control tower must function as the central nervous system of your supply chain. This is a role that is hard to fill.

The Next Frontier

A control tower's operational efficiencies, as well as its vision for autonomous planning, lies in logistics operations. These include intralogistics operations within the distribution center and around it.

Brining autonomous planning to intralogistics operations is one of the most difficult aspects of control tower operations. This is typically due to underlying data access. The automation data spectrum within the distribution center is accessible to a large extent by automation vendors. The data in the distribution center includes not only automation vendor-generated equipment and mechatronics data, but also all third-party software data. This data holds many secrets that can provide insights on the nature of operations, existing bottlenecks and areas ready for optimization and efficiency gain.

This data from distribution centers, inventory and order management systems can be mined to deliver AI models. AI models can greatly optimize your operations. For example, an AI model can forecast SKU demand for everyday operations based on fulfillment patterns and can further drive optimization in receiving or storage operations, increasing efficiency and reducing operational costs.

This data can also be leveraged to create a digital twin that simulates physical assets of your warehouse. It can also create a simulation of real objects, systems and processes within the warehouse. With a digital twin, you can evaluate what-if scenarios and create process flow visualizations. A digital twin can also help you validate layout changes before they are made—and ensure physical operations have no downtime.

All of this is to say, a control tower can act as the next frontier of supply chain operations by delivering AI models and digital twin opportunities.

What Challenges Do Control Towers Face?

One challenge the control tower may face is data access. This is particularly apparent when looking at internal logistics operations. Data within distribution centers is often accessible to automation vendors. This data includes both data generated by your equipment and data generated by third-party software. This data is incredibly valuable, as it holds many secret insights that, when accessed properly, can help alleviate bottlenecks. Making sure your control tower can access this data is paramount.

In light of this, you need to ask your automation vendor what their vision for a control tower is and how they plan to deliver it. One other point to look out for is their plan for data acquisition. How will they bring disparate data together, both internally and from third parties? Without a solid vision, your control tower can't deliver on its promise.

What To Look For In A Control Tower

When vetting possible suppliers, look for the following three phases in the supply chain control tower process. Your supplier should have a clear vision of all three of these before you sign on with them.

1. Operate: This phase focuses on distribution center operations. It should include real-time visibility of operations. This may come in the form of a digital twin of the warehouse that performs what-if analyses of material flows and other systems and processes.

2. Connect: This phase stitches all distribution centers in the network together. Now, all of these centers should be connected through a single plane, which should allow you to compare key performance indicators to see which centers are running efficiently and implement those practices that are effective across the network. In this phase, a digital twin at the distribution center network level can offer what-if analyses for distributed order management.

3. Collaborate: This phase connects the distribution centers across the enterprise to a digital command center that oversees the entire supply chain ecosystem, which includes partners and suppliers.

Conclusion

A supply chain control tower may look different for every business, depending on its focus. One business might be more focused on manufacturing and upstream activities, while another may need to optimize their supply chain planning or sourcing protocols. Make sure you adjust your control tower accordingly.

Your control tower may hold the key to optimizing your operations. By making sure your tower follows the tenets above, whether you build it internally or partner with a supplier, your operations can become more resilient.

As you plan for your control tower, think beyond traditional control tower offerings. The next frontier of this technology will provide AI- and digital-twin-enabled optimizations for your operations.

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