Supply Chain Control Towers
How to assess and improve your SC Control Tower / 4PL performance?
Assess and improve the performance of a running SC Control Tower
Define scope and approach
When there is a need to assess and improve the performance of a SCCT/4PL, the first step will be to define the scope of this assessment based on the main performance gaps/objectives.
The scope definition will first of all include the operational services/processes that are relevant and might also include design topics (when these might be causing the operational issues too) or business case elements when timing and magnitude of benefits and costs might also be relevant.
Next, the activities and organisation to assess the current performance and identify and implement improvement opportunities need to be agreed upon
Identify relevant SC performance KPI’s
To assess the SC performance, KPI’s can be used in the areas SC reliability, responsiveness, agility, costs, asset management and/or environmental impact. The SCOR model defines performance attributes in these areas at 3 different levels to establish realistic targets (level 1) and identify the root causes of performance gaps (level 2 and 3).
At level 3 the KPI’s need to be split based on the responsibility of the various stakeholders in the supply chain. An important element is to include KPIs to measure the performance of a SCCT or 4PL e.g. forecast/budget accuracy, cut-off time adherence and query response times.
Measure and analyse SC performance KPI’s
During the design of the SCCT set-up, the SC KPI’s have been defined, dashboards designed to measure and analyse these KPI’s and an organisation and meeting structure to manage improvement actions was implemented.
When the SCCT potentially run by a 4PL is operational, this set-up is used to initiate continuous improvement actions initiated. These actions often relate to a specific area of the supply chain like specific flows, performance of individual vendors or subcontractors or poor performance regarding one of the SCCT/4PL processes or systems.
When these actions don’t result in the performance improvement needed, the performance data available will be used to quantify the performance gaps and perform an analysis of potential root causes. When needed additional data will be collected and analysed to complete the analysis.
Analyse main issues and improvement opportunities
During the design of the SCCT set-up, the SC KPI’s have been defined, dashboards designed to measure and analyse these KPI’s and an organisation and meeting structure to manage improvement actions was implemented.
When the SCCT potentially run by a 4PL is operational, this set-up is used to initiate continuous improvement actions. These actions often relate to a specific area of the supply chain like a subset of flows, performance of individual vendors or subcontractors or poor performance regarding one of the SCCT/4PL processes or systems.
When these actions don’t result in the performance improvement needed, the performance data available will be used to quantify the performance gaps and perform an analysis of potential root causes in more detail. When needed additional data will be collected and analysed to complete the analysis.
Prepare and execute action plan
Actions needed to improve the performance are captured in an action plan. Three types of actions will be included:
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Containment: prompt actions to limit a concrete problem’s extent (e.g. customer impact) and establish normal operations
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Corrective: retrospective actions to remove the root cause and prevent a concrete problem from ever happening again (e.g. solutions for operational issues)
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Preventive: proactive solutions to improve processes and services and prevent similar potential problems from ever happening (e.g. changes in design of processes, systems, governance and organisation)
