Firstly, let me introduce the concept of supply chain consultancy and its value.
The common objective of engaging a supply chain consultant’s support is in order to access industry leading skills that may not be available within your team, or because the skilled members of your team are capacity constrained. Usually a consultant will be engaged to address a specific issue and consequently will be expected to provide a detailed proposal on how that issue will be addressed.
Supply Chain Consultants
There are broadly 3 different types of consultants and consulting firms. There are strategy consultants, change management consultants and operational consultants. Supply chain and logistics consultancy usually falls within the latter i.e. consultants are engaged to address specific operational issues.
I have been a supply chain consultant for more than 5 years, with 16 years’ experience in the field. In this time, the most common questions that I hear companies ask are:
- How do we reduce our inventory?
- Are my logistics costs too high?
- How do we improve forecasting?
- Is there a better solution for our logistics network?
These are all operational questions, often requiring a tactical as opposed to a strategic change. As a result, it is relatively uncommon to have a large consulting team working on the same project, unless the change requirements are extensive. For example, managing tenders for outsourcing logistics, or undertaking an inventory management review, needs only a single consultant deployed. Consequently, for these types of projects, companies often engage a skilled independent supply chain consultant.
Regardless of whether you engage an independent consultant, or a supply chain consultancy team, the engagement process should be the same and will broadly follow 6 steps:
Step 1 – Project Definition
Normally the scope and objectives will be defined in an initial meeting/s, prior to a consulting proposal being prepared, and consequently prior to any consulting charge. The project definition phase will establish the scope of the requirement and the objective. The consulting proposal should cover the following:
- Terms of Reference
- Execution Strategy
- Technical/Project Approach
- Project Deliverables
- Time and Resources
- Consulting Costs
The proposal should be specific on the number of consulting days assigned and the daily rate applied. This allows you to ensure there is the correct correlation between the deliverables promised and the effort being deployed.
It is also good practice for the supply chain consultant or consultancy to offer the total cost as a fixed charge to ensure you are able to properly budget for the project. As any consultant you engage is likely to have addressed similar issues in the past, it is easier for them to define the exact number of days required and therefore provide a fixed consulting charge.
Step 2 – Data Collection and Validation
Once the consulting proposal has been provided and agreed, the next step for the consultant is data collection and validation. This may involve time on site and/or time working with your team to ensure that any data to support analysis in the next stages accurately reflects your business.
Step 3 – Framework Options
With many supply chain consulting projects there are likely to be several potential solutions, each with their own strengths and weaknesses. It is the role of the supply chain consultant at this stage to present to you the options they believe offer the most viable solution.
Step 4 – Detailed Assessment
The next step, following on from the detailed presentation of the available options, is for the consultant to start work on designing the preferred option/s. This step will normally represent the bulk of the consulting time assigned, and often requires detailed analysis, modelling and costing of the potential supply chain solutions.
Step 5 – Assessment Conclusion
At this stage, the supply chain consultant will provide a fully detailed report giving the ‘story’ of the project. This will include: what data was collected; what options were considered; how they were analysed and what the consultant’s final recommendation is based on that analysis.
Step 6 – Implementation
Depending on the length of the implementation, you may not choose the consultant to deliver the final recommendations, but rather resource for implementation management in-house, or use an interim supply chain professional. However, regardless of who you intend to implement the changes, it is common practice for the consultant to provide you with a detailed implementation plan. The plan will usually provide the proposed tasks, timing, resourcing, stake-holder engagement, risk management and possibly a cost estimate where appropriate.