close
Share with your friends

Up until very recent times, supply chain control towers were used to gather specific functional Key Performance Indicator (KPI) data. This data provided the operator with operational performance visibility and insights to share with the organisation’s immediate trading partners. These supply chain control towers were designed to look at the supply chain in isolation – with the sole purpose of optimising supply chain processes against pre-determined KPIs. What was missing was the ability to generate insights that enabled supply chain managers to evaluate the strategic fitness of those KPIs to ensure alignment with metrics and business priorities informed by other divisions of the organisation.

In reality, a supply chain control tower does nothing to work through the challenges that an organisation is faced with when using separate systems for planning and execution. When a control tower provides an alert relating to an issue identified somewhere in the chain, an operator is still required to monitor and evaluate the alert, translate the impact on the strategic, operating and executional plans, and then determine an appropriate response.

However, with the development of multi-party, consumer-driven networks, technology investments are now being made to embrace more advanced forms of digital control towers – cognitive decision centres (CDCs). These new technologies provide real-time visibility, facilitate multi-party collaboration and use more powerful self-correcting capabilities to support decision-making and autonomous control through AI and machine-learning.

Unlike traditional supply chain control towers, CDCs take a cross-functional view of the supply chain, from sales and marketing through to finance and procurement. CDCs enhance the analytical capabilities and responsiveness of an organisation as it moves beyond providing basic functionality and limited insights.

Cognitive decision centres (CDCs)

However, with the development of multi-party, consumer-driven networks, technology investments are now being made to embrace more advanced forms of digital control towers – cognitive decision centres (CDCs). These new technologies provide real-time visibility, facilitate multi-party collaboration and use more powerful self-correcting capabilities to support decision-making and autonomous control through AI and machine-learning.

Unlike traditional supply chain control towers, CDCs take a cross-functional view of the supply chain, from sales and marketing through to finance and procurement. CDCs enhance the analytical capabilities and responsiveness of an organisation as it moves beyond providing basic functionality and limited insights.

As leading supply chain practices mature and become more sophisticated through the adoption of digital enablers – supply chain control towers have not coped with greater and more varied data inputs. This proliferation of accessible external data can overwhelm the current analytical platforms.

CDCs provide the capability to rapidly enhance the analytical performance of supply chains and leverage cross-functional data (sourced internally and externally) to provide visibility of performance across the entire chain. By merging an integrated set of data analytics from multiple sources across the supply chain, CDCs facilitate collaboration across functional boundaries – the analytics does the heavy lifting while operational experts provide the expertise to make better decisions.

CDCs of the future

In the future CDCs will use artificial intelligence to capture and interpret cross-functional data. This will allow decision-makers across an organisation to recognise points of conflict and simulate different trade-offs in the search for a best-case scenario. Put simply, CDCs are about optimising enterprise-wide performance, not the performance of the specific business units.

Above all, CDCs are simulation tools. They will provide decision-makers with a test bed for business strategy. While dashboards, control towers and stand-alone analytic platforms are focused on streamlining supply chain processes to hit predetermined targets, tomorrow’s CDCs will help organisations understand the enterprise-wide impacts of different responses to the market and different strategic ambitions. This will allow successful organisations to continuously make informed decisions about their functional priorities.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal

Further insights