The Control Tower concept in Logistics

For the last 20 years, if not longer, the logistics and shipping industries have been driven by ever changing catch phrases, as different players try to differentiate essentially the same services with little value added by them. The first I can remember was the ‘glass pipeline’ which several forwarders spoke of, but am sure there were ones before this.

The control tower, at first glance, appears the same thing, if not exactly the same concept, but I believe this time, there is something more behind it, and it represents the first major shift in the fundamentals of international trade, which most will agree has been coming for a while now.

Why? Well, it represents simultaneously a merging of the various modes of transport and cargo tracing, while moving away from manual input into a fully integrated, automated logistics chain. A Realtime supply chain, that will allow more flexibility of procurement with as close to total visibility as we can get.

Perhaps that is the reason it is still being talked about in whispers and not trumpeted, it is the way forward, but it will change the industry forever, and finally confirm transport as a commodity with little profit margins and all focused-on value added services.

Unfortunately, too many companies are not ready for this, they still plan their logistics at the end of their supply chain, not integrating the 2, and focus on supply chain up to warehouse and then on logistics once out of facility. They are going to have to run very hard to catch up, or be left behind and unable to compete.

What exactly is a control tower?

At present there are several, not always similar, definitions, revolving around the control and tracking of all cargos. They do all however have several features in common: they are all focused on visibility, and based on a complex computer program. They are all focused on an intermodal ‘end-to-end’ product, though the start and end points may be defined differently. More and more they are based on real-time tracking.

A traditional control tower provides visibility to immediate trading partners only. The control tower rolling out now is a hub for visibility, decision-making, and action, based on real-time analytics which monitor, manage, and control decisions and execution across functions and across companies to optimize the entire network. I believe this is a large step towards a fully AI self-contained automated autonomous supply chain controlled by an equally intelligent and complex control tower. Lets face it, the vast majority of errors on the supply chain, from over estimating to wrong documents to a truck accident, as the result of human frailty or error, and the more autonomous this becomes, the less challenges will occur.

Some of the most common flaws of supply chain control towers…:

Currently the so called “end-to-end” visibility is primary benefit they are supposed to provide. However, the truth is that control towers offer a very limited form of visibility, emphasizing visibility of transition from one part of the chain into another, at the expense of an overall clear view. At best, this means visibility across some of the internal departments and some immediate trading partners.

That’s because many of the current control towers create visibility by crudely stitching together multiple applications together with one-off connections between trading partners that aren’t reusable, a time- and resource-intensive process.

Control towers also require a lot of manual processes and large teams of people to operate—meaning that at best the response time between detecting a discrepancy and taking corrective action will be as long as a full week, and more likely several weeks or a month.

This is because the control tower does nothing to change the fact that your enterprise is still using separate systems for planning and execution. So even when a control tower provides an alert about an issue somewhere else in the chain, a human planner is still needed to evaluate the alert, translate its effect on the strategic, operating and execution plans, and determine the optimal response.

How does it differ from the old freight forwarding model?

Although many large projects and even several large online stores are going for a physical centrally based control tower, or set of regional ones, the control tower concept does not require a physical or hierarchically linked set up, and can very much be a virtual entity. The main tenant would appear to be that it is an event management system, structured to provide the management team, and the greater group of stakeholders with status information in a structured way that can inform decision making and optimise work and logistics flows.

This should include order planning and preparedness, receive usage analysis as well as the actual status of orders, products in stock and in shipment as well as plan for probable change  or exception management events.

It is by its nature at the very least a low level of AI in this regard, taking information available and using statistics and probabilities to anticipate and monitor movements and orders. More and more this anticipation and tracking is taking place in real time. That means measuring milestones across the supply chain and alerting when certain orders change from expected timelines, meaning come ahead of as well as fall behind.

By comparison traditional logistics could just as easily be called ‘paper logistics’. In fact, paper or virtual pages generally run through all processes, from product documentation to sales document, to booking and to confirmation of logistics operations, including these related documents, such as booking notes, mates receipts, letters of credit and bills of lading. This means it is information compiling per page without being inactive pages. One could also argue that within modern international trade, many of these are updated, and there are already initiatives in place to update, or do away with many of these. To a large degree, many of the logistics processes still relys on scanning or converting to pdf these documents, if not filling them out in a pdf writer on a set format, with information being transcribed into different IT systems several times, all time consuming and allowing room for error.

freight forwarding traditionally focuses solely on the transportation, storage and distribution part of the process, without really linking them. This typically includes track and trace that is based on pick-up and delivery scheduling rather than real-time movement or movement anticipation and planning.

Finally, many traditional freight forwarders today still rely on physical communication, the telephone with stakeholders communicating extensively by phone or social media voice communication of one form or another both to book and negotiate cargo, but also to follow up and track cargos.

Next week, we will take a step into what types of control panels there are and what roles they can and should fullfill.