Beyond supply chain expertise, consultants bring an outside perspective and lack internal biases about what can or can’t be done. They have more freedom to ask probing questions, drive conversations toward new ideas, and challenge the status quo. Consultants may also have a more direct line to senior executives and can more easily sell their strategic vision to key decision makers.
Collectively, these consultant capabilities and credibility factors help companies avoid the politics, risk aversive behaviors, and resource shortages that can quickly marginalize supply chain initiatives.
Step 2 – Who to Hire
One of the biggest misconceptions about consultants is the cost. Reading about expensive engagements and the $7.1 billion spent in the United States on management consultants in 2016 is enough to make a company avoid consultants like the plague. However, beneficial outcomes more than outweigh project costs—if the right consultant is hired and appropriate project parameters are set.
One option is to hire a well-known global consulting firm like Accenture or Deloitte. These highly regarded organizations bring vast experience to supply chain engagements, assign an integrated team of well-trained individuals to a client, and leverage an arsenal of technology resources. The downside of working with these giants is their large, enterprise-wide project focus and expense. Many produce company projects are smaller scale undertakings and do not present a large enough payback to warrant the cost of a major consultancy.
Another option is to seek out an affordable boutique consulting firm that offers a narrower set of capabilities. While these smaller organizations may not cover the full spectrum of supply chain activities, they have deep capabilities in a few areas. This can be of great benefit when a company understands its needs and takes the time to align with a capable consultant. One challenge of hiring a smaller firm may be availability. A well respected organization may be quite busy and lack the capacity to take on new clients.
Produce companies can also look beyond the ranks of pure consultancies. Logistics service providers, equipment companies, and technology firms often provide some level of consulting services. These complimentary or low-cost offerings can be beneficial, but the solutions may be biased toward a specific set of services, solutions, or technology tools. University research centers can also provide supply chain advisory services via faculty or graduate students. They are priced competitively, though their project bandwidth may be constrained at certain times of the year.
The choice ultimately boils down to fit and availability. There must be a match between the project focus, timeline, and budget with the consultant’s capabilities, capacity, and cost structure.
Read Part II
Supply Chain Consulting – Part 2
Asking key questions to achieve results
Every January, the performance scoreboard is reset and hope springs eternal for a stellar year. Fresh produce companies vow to grow more, ship more, and sell more product at better margins. Growing strategies are ready for implementation. Supply chain goals are locked in. Technology investment plans have been vetted and approved.
Despite these positive preparations, 2018 may be a difficult year to achieve key goals in the fresh produce industry. Shrinking unemployment suggests future farm labor availability and cost challenges. An acute shortage of qualified truck drivers threatens the steady, low cost movement of product from field to shelf. And, Amazon is quickly becoming a bigger factor in produce retailing with its ownership of Whole Foods.
Keeping your supply chain goals on track in this challenging environment may require an infusion of external expertise. Short of hiring a full-time strategist, the best option is to hire a supply chain consultant. A qualified consultant can effectively analyze your operations, recommend improvements, and drive implementation plans.
Finding the right consultant and targeting the right issues are the keys to developing optimal solutions to your supply chain challenges. They are also a major undertaking—which is why two Supply Chain Solutions articles will be devoted to this topic. This article focuses on important questions to facilitate consulting project planning, the second installment in April will address questions about focal areas for project execution.
Step 1 – Why Hire a Consultant?
Supply chain professionals take pride in developing effective and efficient fulfillment processes. Their expertise is tweaking those processes and making timely adjustments to prevailing conditions so product flows remain steady. Under fairly predictable conditions and stable demand, such efforts generate continuous performance improvement.
Unfortunately, produce supply chains are not as simple and stable as they once were. Volatile demand and greater customer requirements may impair the current supply chain and permanently impact performance. Business change—in the form of a new CEO, a merger, or a new line of business—may render an existing supply chain obsolete. In these situations, a supply chain transformation is needed to remain competitive in this hyper-fast, consumer-driven environment.
Undertaking a transformation with existing resources is difficult. The current supply chain team is neck-deep in maintaining product flows and lacks the time to properly overhaul processes. They also may have limited experience with managing major projects, updating technology, or driving change. External support is essential.
One source of external support is consultants. As project specialists, they have the capacity and focus to guide a variety of supply chain initiatives. Veteran consultants have the expertise and broader marketplace perspective to support supply chain transformation. They are often called upon to fix major problems, design new supply chains, and integrate operations.
Beyond supply chain expertise, consultants bring an outside perspective and lack internal biases about what can or can’t be done. They have more freedom to ask probing questions, drive conversations toward new ideas, and challenge the status quo. Consultants may also have a more direct line to senior executives and can more easily sell their strategic vision to key decision makers.
Collectively, these consultant capabilities and credibility factors help companies avoid the politics, risk aversive behaviors, and resource shortages that can quickly marginalize supply chain initiatives.
Step 2 – Who to Hire
One of the biggest misconceptions about consultants is the cost. Reading about expensive engagements and the $7.1 billion spent in the United States on management consultants in 2016 is enough to make a company avoid consultants like the plague. However, beneficial outcomes more than outweigh project costs—if the right consultant is hired and appropriate project parameters are set.
One option is to hire a well-known global consulting firm like Accenture or Deloitte. These highly regarded organizations bring vast experience to supply chain engagements, assign an integrated team of well-trained individuals to a client, and leverage an arsenal of technology resources. The downside of working with these giants is their large, enterprise-wide project focus and expense. Many produce company projects are smaller scale undertakings and do not present a large enough payback to warrant the cost of a major consultancy.
Another option is to seek out an affordable boutique consulting firm that offers a narrower set of capabilities. While these smaller organizations may not cover the full spectrum of supply chain activities, they have deep capabilities in a few areas. This can be of great benefit when a company understands its needs and takes the time to align with a capable consultant. One challenge of hiring a smaller firm may be availability. A well respected organization may be quite busy and lack the capacity to take on new clients.
Produce companies can also look beyond the ranks of pure consultancies. Logistics service providers, equipment companies, and technology firms often provide some level of consulting services. These complimentary or low-cost offerings can be beneficial, but the solutions may be biased toward a specific set of services, solutions, or technology tools. University research centers can also provide supply chain advisory services via faculty or graduate students. They are priced competitively, though their project bandwidth may be constrained at certain times of the year.
The choice ultimately boils down to fit and availability. There must be a match between the project focus, timeline, and budget with the consultant’s capabilities, capacity, and cost structure.
Step 3 – How to Begin
After determining the general purpose of the project and hiring a capable consultant, a logical first step is to conduct a supply chain assessment. This helps the consultant appraise and evaluate the client’s current supply chain strategy, organization, processes, technology, and metrics. The goal is to identify strengths and performance gaps so the consultant and produce company can work toward cost-effective solutions that drive competitive advantage.
A typical assessment will begin with a series of site visits and interviews with stakeholders from across departments and levels of responsibility. Next, relevant data is collected, measured, and analyzed to identify effective practices and lagging capabilities. Then, a set of recommendations and a project roadmap can be developed to prioritize improvement needs.
The strategy assessment determines if the company has a clear supply chain strategy aligned with its overall business strategy and goals. This big picture overview highlights the current supply chain design and its ability to profitably serve the market. Issues related to customer service, strategic risks, and operating flexibility should be investigated.
Having the right talent is another essential element of success. This assessment investigates the supply chain’s organizational structure, individual roles, and capabilities of current team members. The goal is to determine if qualified people are in place and given appropriate authority to support operations.
The process analysis examines the plan-source-make-deliver operations of a fresh produce supply chain. This detailed activity explanation and evaluation provide valuable information for benchmarking purposes. Process modification opportunities can also be pinpointed by the consultant during this assessment phase.
A supply chain information infrastructure assessment determines if technology is performing as needed. Tools should be in place to enhance supply chain visibility and decision making. The consultant’s role is to determine where technology resources are lagging or outdated so future upgrades can be investigated.
It is important that the assessment also include a review of performance indicators and tools. The consultant needs to understand what is regularly measured and how the results are deployed. If results are not being used to drive satisfaction, profitability, and return on investment, then changes must be added to the project docket.
A detailed and factual assessment will highlight the strengths and weaknesses of a supply chain’s strategies and operations. The assessment will also benchmark internal capabilities against best-in-class practices. And, it helps the company and consultant prioritize needs in the project planning roadmap.
Step 4 – Keys to Success
The success or failure of a supply chain consulting project largely results from the actions and attitude of the supply chain team. They must be actively engaged in the process, open to innovative ideas, and willing to trust the process. Shared project ownership with the consultants will avoid the “not invented here” syndrome and a loss of momentum after the engagement ends.
An essential element of a consulting project is candid communication. Con-sultants are not mind readers and cannot evaluate every nuance of a supply chain during the assessment phase. Teams must openly share their data, identify known problems, and specify desired outcomes. A nondisclosure agreement is an effective tool to ensure confidentiality of these conversations and sensitive data.
Gaining executive buy-in for a consulting project is a fundamental requirement. With the decision-making authority to approve projects and related spending, executives can also provide the political clout to remove obstacles that impede project progress. Additionally, their knowledge of corporate strategy and future organizational direction ensures the supply chain project is aligned with business needs.
Although the project will primarily reside within the supply chain function, broad engagement of other stakeholders is necessary. The finance group is the repository of pertinent data for the project. The marketing and sales team has the ear of the customer. Suppliers and retailers should be encouraged to voice their perspectives when a supply chain transformation project will affect their operations. Involving these groups will highlight their priorities, identify opportunities for differentiation, and promote buy-in to project outcomes.
Finally, there must be a willingness to act on project findings. A consulting project is just a costly and time consuming mental exercise until action is taken. To gain full value from the initiative, it is necessary to modify processes, adopt new technologies, and/or realign roles. In other words, think in terms of outcome, versus a report sitting on a shelf, to truly achieve success.
Wrap Up
Consulting projects present the opportunity to assess the current state of a supply chain and pursue substantial improvement in a rapidly changing industry. Success, however, is never guaranteed.
Before jumping into a rapid-fire series of supply chain modifications, it is necessary to step back and do some planning: think about the situation, resources, and requirements; clearly articulate why the support of a consultant is needed; evaluate options and select a consultant with appropriate expertise. Then begin with a supply chain assessment to clarify the true opportunities and avoid the obvious pitfalls to promote success.
A patient and deliberate approach will ensure an organization is ready to take on substantive consulting projects in its procurement, transportation, distribution, and technology processes. Key questions about supply chain project opportunities in these important areas will be answered in April’s Supply Chain Solutions column.
Read Part II
Supply Chain Consulting – Part 2
Asking key questions to achieve results
