How to assess and improve your SC Control Tower / 4PL performance
Shippers are using SC Control Towers to orchestrate and improve their supply chain. Such a SC Control Tower (SCCT) can be operated by the SC organisation of the shipper or can be outsourced to a Logistic Service Provider (4PL) and will have a big impact on the SC performance in general. How to measure, assess and improve the SC performance when a SCCT solution is operated by your SC organisation or 4PL being used?
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 include the operational services/processes that are relevant and might also include design topics or business case elements. 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 to include in this set-up are KPIs to measure the performance of a SCCT or 4PL.
Measure and analyse SC performance KPI’s
During the design of the SCCT solution, the SC KPI’s have been defined, dashboards have been designed to measure and analyse these KPI’s and an organisation and meeting structure to manage improvement actions was implemented.
When this set-up doesn’t result in the performance levels 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.
Analyse main issues and improvement opportunities
When actions to close the performance gaps are not obvious, an additional analysis is needed regarding underlying root causes. Areas to investigate are way of working, availability and quality of data, use of systems and tools, capabilities of staff and SC partners and/or collaboration with internal and external stakeholders.
Root causes can also to be found at a deeper level when the SCCT solution is not fully implemented, the business case is not realistic anymore and/or transformation capabilities are lacking.
Preparation and execution of an action plan
Actions needed to improve the performance are captured in an action plan. Three types of actions need to be included:
Containment: prompt actions to limit a concrete problem’s extent (e.g. customer impact) and establish normal operations
Corrective: retrospective actions to remove the root cause and prevent a concrete problem from ever happening again (e.g. solutions for operational issues)
Preventive: proactive solutions to improve processes and services and prevent similar potential problems from ever happening again (e.g. changes in design of the SCCT)
More information The assess & improve section of this knowledge platform provides more info on the performance improvement of SC Control Tower solutions.