Logistics Control Tower

Since 1992, Allyn International has provided best in class logistics control tower services to a number of global clients. Below you will find a summary of how the Allyn control tower functions when it should be used, and what one can expect from it.

Logistics Control Tower

As global supply chains become increasingly complex it is vital that processes be put in place. This is to help control costs, maintain compliance and ensure that operational standards are met. The logistics (or supply chain) control tower is one way to effectively manage the movement of goods throughout a supply chain. Starting in the 90s these were sometimes referred to as fourth party logistics (4PL) providers. But while the term 4PL is ambiguous and a bit confusing, the term control tower perfectly describes the service. Think of an airport’s control tower, managing arrivals and departures through one centralized location, making sure all planes and passengers arrive timely and safely. In a similar fashion, the logistics control tower provides a centralized approach to routing, managing, tracking, and measuring performance with the goal of seeing that all goods arrive timely and undamaged.

Companies That Should Consider Using the Logistics Control Tower

Global companies with complex supply chains can benefit the most from the control tower setup. Companies that have been traditionally set up with independent acting regions and not operating under a global standard are a great fit, as the control tower will align their processes. Similarly, the logistics control tower model has proven wildly successful for companies who have grown through mergers and acquisitions. Additionally, companies that have strict requirements on shipping modes and service levels, as well as those that rely solely on a limited amount of providers, would greatly benefit from a control tower solution. A control tower brings additional options forward to drive competition and decrease cost and lead times, without sacrificing performance.

This tactical approach allows companies to focus on strategy and tactics while the control tower focuses on the day-to-day shipments. In a control tower environment, routing decisions will be standardized and freight will be awarded to least cost carriers and those who can meet the transit time requirements. The focus on least cost transport and performance will drive savings and on time delivery. Companies not focused on cost often tender to the carrier who they feel is easiest to work with rather than the one who is cost competitive. When the aforementioned happens there are minimal controls in place, and while the process may seem easy, the cost and performance aren’t where they need to be.

Benefits of the Logistics Control Tower

Some benefits of a logistics Control Tower are Visibility, Performance Improvement, Savings, Metrics, and Technology.

          Visibility: A control tower provides global visibility to all users. Not only does this include a shipment’s location and ETA, but also the data concerning freight, performance, and costs of the shipment. The visibility to this data allows for strategic planning of upcoming shipments, improved performance and analysis of shipments.

          Performance Improvement:  Using a control tower will push a standard global process. Working with each global region to follow a customary procedure will bring about greater supervision while also lowering lead times and costs. And, while many times the regions will push back against the implementation of a control tower, the expertise, processes, and event management the control tower brings will lead to improved performance.

          Savings: A standard global process with sufficient providers and carriers for each pole will drive down costs. The control tower will use contract rates when possible, and if no contract rate is available at least three spot quotes will be solicited before booking a shipment.

          The control tower will look for opportunities to shift transport modes, change service level and consolidate freight. The focus will be on driving savings while maintaining the highest level of performance of the carriers.

          Metrics & Analytics: Perhaps the most important factor in managing a successful supply chain is being able to measure it. At Allyn, our control tower model makes the following metrics available to the client on a regularly scheduled and ad hoc basis:

               1. Volume by mode, service level and lane
               2. Carrier Performance: on-time pickup and delivery
               3. Cost: Per milt/kg, mile/km
               4. Lead time by lane

          Technology:  The technological aspect of the control tower solution is top priority at Allyn International. Our homegrown Allyn Logistics Application, or ALA, is a superior solution that offers all the advantages of a top dollar TMS system. What’s unique about ALA is that it also offers many features that most expensive TMS systems do not. This includes flexibility, multileg shipments, equipment type, auto tender, rating engine, automated premium approvals and a smartphone application. The technology involved allows for the freight to be managed more efficiently resulting in lower costs. 

Operations Handled by the Logistics Control Tower

A logistics control tower is capable of providing the following services:

• Sourcing carriers
• Negotiating rates
• Routing shipments via TMS
• Managing contract rates and lanes
• Requesting spot quotes if contract lanes are unavailable
• Troubleshooting critical and delayed shipments
• Track and trace of all shipments
• Delivery confirmation
• Freight claims management
• Freight invoice audit
• Data capture, analysis, and metrics

While some companies will want all of the above services to be included, others will want to pick and choose specific tasks to be handled by the control tower.

Should Your Control Tower be Managed by a Traditional 3PL?

While a 3PL provider may demonstrate a few of the top requirements one looks for in a control tower -- industry knowledge, access, global presence and process familiarity -- there are also many reasons as to why a 3PL is not preferred. For example, while a 3PL may have unparalleled operations experience, they fall greatly behind a traditional 4PL in the areas of strategy, value-add, IT developments, customer focus and customer service.

Another reason would be neutrality, as a traditional 3PL will always exhibit a conflict of interest. One of the key elements of the control tower is the use of least-cost carrier, however, a 3PL provider might be inclined to forego the least cost and award freight to their company. Additionally, if contract rates are on file, you would be allowing the 3PL access to the rates of their competitors.

Finally, one last reason that a traditional 4PL is the right choice is that providing the control tower service is their core competency. A 3PL would always prefer to move the freight, while a 4PL was set up to provide service based on the 4PL model, and with that comes the hard work, customer service, and dedication that each client is searching for.

Results

In late 2015 Allyn International implemented a Logistics Control Tower for an oil and gas company with a decentralized shipping process. With multiple locations, regions, and personnel involved, the company was having difficulty getting everyone working in a common direction. After a speedy (30 day) implementation of Allyn’s process and ALA, the results began to show immediately. In 2016 with the new Allyn logistics control tower in place the company experienced: 

1. Over 16 percent cost out (of total transport spend)
2. Over 97 percent on-time pickups
3. Over 92 percent on-time delivery
4. Transit Time reduction of 20 percent year over year

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About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe, and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China and Prague, Czech Republic. For more information, log on to www.allynintl.com.

How Allyn Provides Value:

• A single point of contact
• Open-book management, full transparency
• Industry best practices and benchmarking
• Data ownership and visibility
• Material flow optimization
• Substantial logistics cost out
• Productivity gains
• Global sourcing strategies

If you would like any additional information on the logistics control tower concept, or if you have any questions, please contact sales@allynintl.com.