Supply Chain Control Towers Are Coming Of Age

For the second time this year, I have seen a supply chain control tower solution I really, really like. The latest occasion was at LLamasoft’s LLamaCon user conference last week in Chicago. LLamasoft is a leading provider of supply chain design and demand management solutions.

Currently they are not calling the solution a control tower, they are struggling to come up with a name for the solution that they like. They view the term control tower as implying a solution that provides alerts on real time and near-term problems. This is a much more holistic solution. The solution sucks in a company’s demand and supply plans and projects forward to find future time periods, when based on current events, it will be difficult to meet customer demand. I am going to call it a control tower because that is what it looks like to me (if interested, see the article What is a Supply Chain Control Tower for my view on this). The LLamasoft control tower allows a planner to drill down and see what the problem is and work on plan remediation.

In some cases, remediation will be based on making a factory work overtime or asking a customer if they can receive a shipment a few days later. But one thing this solution does a really nice job on is uncovering policies that contribute to a supply-demand mismatch. An example of a policy is that if Customer A orders components for their Houston factory, that order will be fulfilled out the company’s Memphis distribution center. Instead of making a factory work overtime, this solution can easily surface a potential solution – for example, fulfilling the order from the Las Vegas warehouse – based on changing the policy.

The solution demos beautifully, Google map views, slick analytics, nice drill downs. But what really excited me was being able to peer under the covers, into the engine at the heart of the control tower. In big companies, supply chain data comes from all sorts of different systems. The LLamasoft control tower is built on top of their Data Guru solution. Data Guru is a desktop data transformation application that enables data analysts to access, manage and transform enterprise data without extensive training or IT intervention. On top of Data Guru, they have a layer they call SCID (supply chain intelligence database). This is pronounced skid, like what a car does in the rain.

SCID is a supply chain system of record that contains not just a map of the supply chain, but also the supply chain policies! A company can have hundreds of policies around where goods are sourced from, which factories will make which products, inventory carrying policies, transportation modes, and how goods will flow to customers from designated warehouses. SCID documents these policies and makes them visible.

In his keynote, LLamasoft’s CEO, Razat Gaurav referred to the SCOR model, a supply chain reference model well known in the industry. From Mr. Gaurav’s perspective, SCOR contributes to supply silos and conflicting KPIs. That is because while the SCOR model provides a way to model supply chain processes like source, make, move, etc., and has KPIs for each process, the KPIs in one process area can conflict with those in another area. What SCOR is missing, and what the SCID reference model has, are policies.

LLamasoft is also working to develop a modeling tool around policies. This tool will present a way of insuring that a policy put in place for one supply chain process contributes to the overall goals of the company. They showed a prototype of this product to a packed room, but stressed they were still a long way from having a policy design product ready for market. What I saw was a really good first effort, but I think they have more work to do to ensure strategic goals are reflected in policy design.

Right now, LLamasoft has a control tower proof of concept with a leading retailer. So, there is no track history yet. But when I saw SCID, I got excited. Once I peeked under the hood, it became clear to me this could be a very robust solution.