Developer JDA Software Group Inc. has come to market with a "control tower" software tool it says will allow businesses to react quickly to unexpected supply chain disruptions without forcing them to compromise their long-term strategic objectives.
Control tower software allows a business to draft a playbook of appropriate reactions to a potential supply chain crisis. The software diagnoses the cause of the disruption and allows the company to simulate the effects of a range of preselected choices, measure their impact across the entire chain, and choose the best option.
Scottsdale, Ariz.-based JDA is not the only supplier of control tower software. However, it offers the best combination of flexibility and prepackaged resolution levers, said Dr. Adeel Najmi, chief science officer and senior fellow at JDA. The company launched the tool because customers complained they often had to choose between speed and strategy when managing supply chain disruptions, he said.
"Some other providers have taken the approach to practically give up on optimized planning and focus entirely on fast response," Najmi said. The JDA software "goes far beyond such 'guess and check' approaches to deliver the power of optimization algorithms with the full flexibility of subjective decision making of an experienced planner," he said.
Control tower software has been used mostly by large automotive and aerospace manufacturers and mega retailers like Wal-Mart Stores Inc. and Target Corp. However, as all companies struggle to manage volatile demand cycles in an era of omnichannel distribution, they need more control over the entire supply chain to compete with newer retail masters like Amazon.com.
Control tower software is designed to help companies manage the end-to-end value chain from the procurement of raw materials to the production of finished goods and delivery into customers' hands, and do it through any manufacturing and distribution channel. That capability can spell the difference between just surviving the next port slowdown and taking market share from slower-footed competitors, said James Cooke, a principal analyst at Nucleus Research.
Cooke said retailers need all the weapons at their disposal to compete with Amazon, which has emerged as an across-the-board category killer. "If a retailer is not running control tower software within five years, they're going to get rolled by Amazon," he said.
Cooke said that many 3PLs offer access to control tower software, but only to manage the flow of outbound distribution. "If you really want to have control over your supply chain, you have to go end-to-end and marry up the inbound and outbound sides so you can marshal the flow to meet demand," he said.