Control Tower Tale from the 1970s
Many of Perficient’s Supply Chain consultants work long hours talking with executives about how their companies handle information, including procurement and information flow between their companies and suppliers. When a consultant needs the inspiration to continue putting in the hours, all they have to think of is the business school case study of Famous Amos.
Wally Amos was a talent agent in the 1970s and sent celebrities his home-baked chocolate chip cookies in an attempt to entice them to meet and perhaps sign a deal with his agency. In 1975, Mr. Amos opened a cookie shop in Hollywood called “Famous Amos” and sold over $300,000 worth of cookies. In its second year, the store had sales of more than $1 million. Thus, a chain of stores began to grow.
The product – a zero-preservative, craft-made cookie – was unique, and in an era of mass production, Amos was selling his cookies in Macy’s and Bloomingdales, and promoting them via appearances in the Macy’s Thanksgiving Day Parade from 1977 through 1981. By 1982, the company’s revenue exceeded $12 million, and Famous Amos cookies started to be sold in supermarkets.
The management of Famous Amos and the supply chain control tower they had established struggled to keep up with the brand’s rapid growth. Famous Amos stores often ran out of ingredients to make new batches of cookies. Regional preferences were not accounted for, so ingredients of cookies that were popular on the West Coast were sent automatically to stores in the South, but not ingredients for cookies popular in the South. This led to food spoilage, lost sales, and frustrated franchise owners. By 1985, Famous Amos reported a $300,000 loss as sales slumped to $10 million. “He wasn’t a businessman. He was an amazing marketer and had great promotional instincts. But he made a lot of bad decisions,” his son said after the fact.
Wally Amos wound up losing his home, and he sold his business to Bass Brothers Enterprises for $1.1 million. Two years after the sale, as losses mounted to $2.5 million due to an inability to get the right ingredients to the right stores and keep them in stock, Wally Amos left the company.
Modern Control Towers
As companies continue to focus on digitizing their supply chains and integrating new technology to capture and provide real-time data, Control Towers are increasingly in demand to manage and utilize that data and bring an integrated capability to their Supply Chain management functions. Supply Chain control towers are a key component used by companies to stay ahead of competition, as well as to drive internal operational efficiency.
At its core, a supply chain control tower combines people, processes, data, technology, and organization to provide visibility across the enterprise. Many companies tend to have at least one type of control tower if not several.
5 Types of Supply Chain Control Towers:
1. Logistics and Transportation Control Towers
Logistics and transportation control towers provide near-real-time visibility into both inbound and outbound logistics. Shipping notifications, delivery dates, and track and trace information are all monitored. Financial information through the Supply Chain can also be monitored. Transportation Control Towers are further enabled for success when combined with a TMS system.
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2. Fulfillment Control Towers
Fulfillment control towers focus on reducing cost-to-serve by monitoring shipment packaging requirements and expediting orders.
3. Inventory Control Towers
Inventory control towers are meant to monitor inventory levels to avoid shortages or outages with real-time insight into inventory management.
4. Supply Assurance Control Towers
Supply assurance control towers monitor and evaluate for appropriate levels of supply available and ensure the right volume of supplies planned for delivery.
5. End-to-End (E2E) Control Towers
E2E control towers provide complete visibility across a business’s systems and processes, including internal, external, and interdepartmental systems.
Supply Chain Control Towers are capable of more than just simple information sharing. They can help a company achieve the following outcomes:
- Continuous intelligence
- End-to-end visibility
- Advanced analytics
- Scenario modeling
- Impact analysis
- Cross-ecosystem collaboration
- Artificial Intelligence/Automation
Challenges of beginning a control tower initiative:
- Definition and clarity on the span of control
- Breaking down functional control siloes to increase end-to-end visibility and control
- Questions regarding data ownership, clearance, and who evaluates and benchmarks data
- Required talent to work in/manage a control tower environment
- Build versus buy decision
- Not identifying the right technology requirements
- Evaluating the different technology platforms to find the one that best suites a company’s needs
- Making the investment decision to implement a control tower
As shown in the Famous Amos example, even the best products, when not supported by a robust Control Tower, can doom a company to financial losses and failure. The challenge for supply chain executives looking to introduce or enhance an existing Control Tower is in managing the development of the new technologies and capabilities of the Tower while keeping existing clients and other stakeholders satisfied. Many existing supply chain clients of Perficient find it challenging to find the investment, expertise, and time to upgrade their current system(s).
This is why so many supply chain executives have come to Perficient. We have industry experience and best practices knowledge for designing and building upgraded Control Tower capabilities. If you would like to speak with us to discuss your supply chain needs, contact our Supply Chain team here.
About the Authors:
Carl Aridas has been a member of Perficient’s Digital Assets Team since 2021. Supporting mostly large financial services firms, he is certified in the Scaled Agile Framework (SAFe), is a Scrum Master, and is a Six Sigma Green Belt project manager.
Lin Eshleman has been a member of Perficient’s Supply Chain team since 2021. Supporting large, cross-industry Supply Chain firms, he has a PMP certification and is a Six Sigma Green Belt project manager.