„Supply Chain Control Tower“ and new regulatory requirements have synergy potential

Modern supply chains with advanced ERP, transport, and warehouse management systems continuously generate valuable mass data along the E2E supply chain. This data can - and must - be utilized to optimize operational activities (from transport & warehouse to store availability), monitor risks and problems, enhance service levels and contribute to environmental, social and governance (ESG) reporting. A supply chain control tower aims for the "voluntary" optimization of the E2E supply chain, while new regulatory requirements mandate the systematic use of specific data. There is synergy potential here that should not be overlooked.

A supply chain control tower extracts data and presents it in a readily usable form for operational or tactical purposes within a business intelligence environment. The goal is to continuously optimize capacity utilization, costs and service and to identify risks and problems early to manage them effectively. Real-time and historical data is visually aggregated in dashboards with drill-down options (zooming in on details), allowing operational and tactical decision-makers to continuously monitor and control of transport and warehouse activities. These systems often lead to significant cost savings, improved service quality and enhanced utilization, enabling companies to defer investments. Control towers have therefore become an essential tool for performance improvement for an E2E and individual sites view, offering real-time information for managing problems and exceptional situations. A particular advantage is that control towers require minima effort can be implemented quickly.

However, many companies will also be obliged to implement the new regulatory requirements of the CSRD (Corporate Sustainability Reporting Directive) and the CSDDD (Corporate Sustainability Due Diligence Directive) in the foreseeable future. For the CSRD, from 2025 companies that meet two of the three criteria (>250 employees, >€25 million balance sheet total, >€50 million turnover) must prepare detailed reporting on environmental, social and governance development with specific key figures that can be verified by auditors as part of the annual financial statements and in the management report. The EU taxonomy provides a standardized framework for the assessment and disclosure of companies' environmental performance. And the CSDDD expands ("tightens") the supply chain monitoring already in force in Germany with regard to sustainability criteria and will gradually affect all companies with more than 1,000 employees and more than €450 million in turnover by 2029. The primary goal of CSRD and CSDD is compliance, however, both initiatives also allow companies to improve their public image: "do good and talk about it".

While regulatory requirements and the control tower approach have their own independent objectives and content, there is a significant overlap in terms of content and data sources. This presents an opportunity to combine what is necessary anyway (systems for implementing regulatory requirements) with what is useful (SC control tower).

The common main data sources for both requirements are the ERP, transportation and warehouse management systems as well as additional integrated systems such as facility management and third-party systems. Extracting this data into a common "data lake" can be carried out jointly for both purposes. Streaming this data via messaging systems also offers synergy potential for real-time views and makes it easier to achieve data consistency in the applications based on it. The subsequent data transformation and its preparation must be designed individually for each purpose, there are synergies in the use of the same software tools and infrastructure to facilitate continuous maintenance and further development.

Combining a "CSRD project" with a "control tower project" will not always be the best and quickest approach. But a brief examination of synergies and "secondary uses" of the necessary information makes a lot of sense, even if each topic on its own is already a success story on the agenda of all supply chain and logistics managers.

Control towers for the E2E view and individual locations are a "quick win" in the modern supply chain and logistics repertoire, the combination with the fulfillment of regulatory applications makes their use even more attractive.

Are you planning a control tower project or do you have questions or comments on this topic? Please do not hesitate to contact us!