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Federal solutions: Build a control tower for supply chain traffic

Improved Visibility, Capabilities Lead to Functional Excellence and Financial Benefit

Overview

As organizations have become more sophisticated in controlling the cost of their supply chain through strategic sourcing, cutting the proliferation of product/service variations, improving their forecasting or other measures, one unifying strategy can maximize not just cost improvements but performance: establishing a “control tower” to coordinate the elements that make up the supply chain.

Just as the military has different branches of service, each with its own mission and responsibilities that must collaborate effectively to maximize results, so can an agency structure the components of its supply chain to coordinate and reinforce each part. It is a difficult undertaking, but one that can produce maximum efficiency, resulting in far more effective management of the supply chain—a centralized service and dashboard that proactively identifies looming bottlenecks or problems and helps find a way to minimize or even prevent them.

Background

Even with large-scale enterprise resource planning and supply chain systems in place providing unprecedented productivity and information, supply chains still suffer from the same woes that have always plagued them:

  • Limited visibility: Detailed knowledge of operations is maintained locally, while officials high up in the agency are unaware of the variability of day-to-day operations. This makes it difficult to identify the root causes of problems, particularly early enough in the process to make effective changes.

  • Limited reaction: Silos, whether organizational, functional or cultural, prevent effective collaboration among the parts of the supply chain, increasing the likelihood of problems emerging very late and limiting options for response. Agencies tend to limit responses to these short-term problems rather than incorporating long-term measures to prevent other related, but different, problems from arising.

  • Excess cost: Expediting a solution, by definition, costs more than preventing the problem from occurring. Customer service is trapped into fire-fighting, rather than delivering great service on a daily basis, and employees are taken away from more valuable work.

Analysis

The first step in creating a supply chain control tower is to evaluate the “base case” and possible areas to introduce a small localized control tower. This will allow for a thorough evaluation by assessing and prioritizing the parts of the supply chain; identifying the needs and requirements for each step and the final state; creating a road map to reach that final state; gathering and comparing historical data; and monitoring the activities of the current process.

This initial program, typically confined to one geographical area of one part of the agency, will bring together a subset of key stakeholders to identify shared goals, outcomes specific to their part of the operation, and how to align to them. Even this small improvement can produce significant savings.

It does not remain a pilot program forever, but serves as the starting point for slowly rolling it out across additional parts of the supply chain, bringing in stakeholders who continually help refine the goals, the metrics and the processes that create success. Using this initial subset as a basis for organic growth, additional stakeholders can be added. Additional coordination will be required, metrics will change and the alignment of goals will become more intricate.

Recommendations

Historically, dashboards have tracked one specific area, such as risk or spend, identifying issues for one centralized division or group. However, the control tower is monitored by a unified cross-functional team that makes decisions in the best interests of all parties and the agency as a whole.

Accenture offers both deep and broad expertise in supply chain management, identifying and designing the right analytics to drive metrics that produce tangible results. Our experience in creating and supporting a supply chain control tower provides the basis for helping agencies identify and create the processes, align the stakeholder teams and realize the results of a more coordinated and efficient supply chain.