The Control Tower and disaster mitigation
Last January, during the weeklong Chinese holiday called Spring festival, troubling reports of a mysterious virus outbreak in the Chinese city of Wuhan emerged. As the outbreak worsened, the Chinese government instituted a complete lockdown of both China’s society and economy. With profound consequences, one of the most affected industries was the international logistics sector. Amidst the uncertainty stood the Sino-Dutch company KLG-ITM, a joint venture between KLG Europe and Intermax. Founded in 2013, KLG-ITM provides Reliable and customizable logistics solutions within China. With the lockdown in effect, the logistics nightmare had begun. Fortunately, KLG-ITM had a secret weapon: their Control Tower initiative.
The KLG-ITM Control Tower
In 2019, KLG-ITM implemented a sophisticated IT solution, granting both the client and the logistics provider complete insight in the logistics process. Within logistics and supply chain management, problems such as unchanneled (mis)communication, high levels of redundant manual work, and unexpected cost due to lack of oversight are often present. KLG-ITM aimed to solve these problems once and for all by developing the IT solution called the ‘Control Tower’. The idea is simple: centralised coordination creates transparency in the supply chain, which allows the implementation of what’s known as management by exception.
Well before the start of the COVID-19 pandemic, the Control Tower functioned as intended, at first, in smaller pilot projects, consisting of just a few manufacturers and a single client. Following the successful pilot, the system was implemented for multiple, large-scale projects, involving multiple nations, borders, manufacturers and languages. The Control Tower centralised the communication and information of multiple parties via a restricted online IT portal, which replaced separate and overlapping multiple-party communications with a single comprehensive dashboard feature. Regardless of the extent of the supply chain, the consistent result was the simplification, streamlining and structuring of procedural and information flow.
The start of a pandemic
The Chinese people were facing the start of a pandemic. The implemented lockdown consisted of an attempt to prevent the disease to inflict more damage and both society and economy were shutdown. Manufacturers could not produce, trucks were not allowed to pass administrative borders, and outbound transport modalities such as air, ocean or rail were severely hindered. As the engine of the world economy, as China is often known as, came to a sudden stop, so did the international supply chains and the many economic connection that depended on it.
As a logistics provider or supply chain manager, this is truly a nightmarish scenario. The core of the logistic business, the movement of cargo, became almost impossible. Within the lockdown, communication with manufacturers became increasingly difficult, as their offices remained closed. Meanwhile, your clients need to be informed about the situation even when you, as a regular logistics provider, have only limited knowledge about the situation. With increasing pressure, much work is needed to provide a simple answer to basic questions. Everyone involved in the logistics process suffered as communication and information channels were disrupted, if not completely severed. Yet, this was not the case for KLG-ITM.
The Control Tower during an epidemic
The panic, long workdays and longer waiting times resulted in substantial costs, all to salvage as much as possible. KLG-ITM managed to prevent such a situation as the Control Tower solution was robustly designed, meaning that it could operate regardless of circumstance. Its purpose, to streamline and structure both communication and information in the supply chain, remained functioning as it consists of a full online feature. When the epidemic hit, the Control Tower absorbed the blow and operated as usual. The only noticeable change, was a sudden change in data, from the status ‘ready’, to ‘delayed’.
The benefit of the Control Tower is best exemplified by one of the largest supply chains under KLG-ITM’s management. In such scenarios, two features are always key: communication and information. In this case, communication consisted of hundreds of different manufacturers, all delivering to a single European client via the KLG-ITM supply chain services. During the outbreak, the manufacturers changed their input data from home in the online dashboard. The KLG-ITM team learned of the situation, the delays and the solutions. Within a couple of days, the entire situation was communicated to the client with complete oversight.
The Control Tower weathered the storm and the streamlining of information and communication resulted in real-time reports which showed delays, halt or cancellations. Based on this information, KLG-ITM was able to provide daily updates and overviews, much to the delight of the client, who could anticipate based on the received information. In the following months, China slowly awaked but the logistics sector still had to manage a two-month delay. Daily updates therefore continued, and KLG maintained a close connection with the client, who could plan, asses and act decisively based on the information derived from the Control Tower.
IT solution and improved resilience
The crucial role of the KLG-ITM Control Tower in managing and resolving disastrous situations such as the corona outbreak (or COVID-19 as it later became known) cannot be understated. The situation showed how our interconnected global network is fragile and easily disturbed. Ordinary supply chains are gravely vulnerable to disturbing events. IT solutions like the KLG-ITM Control Tower, are essential in managing and handling difficult situations, as it turns information and communication in a valuable resource and not a burden.
In the global business world, competition is key. In order to sustain and grow a business, the efficiency and costs of your logistic operations are crucial. The Control Tower greatly improves resilience and reliability by streamlining the process and turning information and communication into a resource. The grave impact of this global pandemic, is increasingly becoming clear, as it touches the corners of our world. For logistics, the lesson is that IT solutions should be welcomed to change and improve the industry, to mitigate and improve supply chains to the benefit of everyone, something KLG-ITM clearly understands.