Consultants: A Worthwhile Investment or a Waste of Money?

Consultants: A Worthwhile Investment or a Waste of Money?

Eduardo Schumann

October 2024

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The debate surrounding consultants is as old as the profession itself: Are they worth the cost? Do they deliver results? I've heard these questions far too many times over my three decades in the industry. After more than 200 projects successfully delivered, mostly improving efficiency and reducing costs in mining and manufacturing companies, I believe I may have learned a thing or two...

Let's be clear: Not all consultants are the same. There are those who truly understand the complexities of business and can deliver tangible results, and then there are those who are more interested in padding their pockets. Unfortunately, the latter has given the entire profession a very bad reputation.

I've witnessed the negative consequences of hiring the wrong consultant. I've seen companies waste millions on consultants who produced nothing more than fluff reports filled with incorrect assumptions and conclusions. I've also seen (more often than I would like) consultants who promised unrealistic results and failed to deliver.

Once I witnessed 2 consultants from a well-known company visiting a site where I was working. After a short visit of 3 days, without laying foot on the shop floor, wearing fancy shoes instead of safety boots, they produced a more than 300-page report. There were basically as many wrong assumptions and conclusions as pages in the report. Another time, a consulting company promised a company US$ 10 million in benefits improving meetings and increasing the capacity of the crushers (in the processing plant of a gold mine). I agree the meetings were far from adequate, however improving them would not grant better EBITDA by itself. The crushers were not the production bottleneck (improvements in other parts of the process that are?not the bottleneck result in no additional production, as stated in the theory of constraints). To make it even worse, there was actually overcapacity in the crushers. The problem was further down the line. But they based their “findings” solely on the data they gathered. I know, because I saw the very same data, but as understanding the process I went to the shop floor to follow the entire process. My observations didn’t match the data, so I challenged it. Among other issues, the data was presenting tonnage way above the conveyors capacity, something that could not happen. It turns out, nobody checked the accuracy of the data, leading to very wrong conclusions, misleading the client. Cases like those hurt consultants' image badly.

But it's important to remember that not all consultants are like this. There are many talented professionals who can add immense value to a business. People who will go the next mile to ensure the project targets will be met. The key is to find the right consultant for your specific needs.

Some good reasons to bring an external consultant:

• Consultants tend to bring a neutral viewpoint, often identifying issues or opportunities that internal teams might overlook due to familiarity or bias;
• Consultants are either experts in their fields, offering deep knowledge and experience that can be vital for specific projects or challenges, or they are generalists who can easily connect the dots and bring a solution;
• Consultants can speed up project timelines, as they bring tested methodologies and best practices. Not that an internal team cannot do it, but they tend to do it faster;
• Consultants can early identify and mitigate potential risks associated with a business and/or a project, increasing the chances of a successful outcome.

Engaging in a project requires a leap of faith, as results will take a while to appear and even more time to become sustainable. It also requires a willingness to change. Some people want miracles, a quick fix, so they can go back doing the same old things that led to the occurrence of the issues in the first place. So, there needs to be a clear reason for changing, something that will make the improvements stay, not a mere wish. With no commitment, hard decisions will not be taken when the?time comes, and independent of the abilities and knowledge of the external support, chances are the initiative will fall short on the possible outcomes.

I learned a few things over the years about delivering projects. One of my keys to having a very high success rate is to say NO to projects I don’t believe. Of course, some people will take the money, they don’t care much if the project will drive good results or not, that is how you start to differentiate good professionals. By far, most of the projects I do come from my network, based on past very successful business cases. Bad results damage reputations, so in my case, why risk it?

Another important point to consider?is that an engagement should be short and have very clear goals. A roadmap helps to visualize the path to success. To translate the goals, a metric should be put in place at the beginning of the project to transparently evaluate the progress. Once installed, project status and results should be reviewed weekly by the team members and at least once per month with the company executives to eliminate any eventual roadblocks as soon as possible. It is unlikely a project to go without some turbulence, so?be prepared for a possible bumpy ride. Keep in mind the objectives you want to achieve.

In our case, we work together with your teams, trying to share knowledge and best practices, coaching and training, and inspiring your people to reach higher. We believe people come to work to do a good job. Part of our work is to remove barriers that prevent them from achieving the best results. In the middle of the forest, sometimes we cannot see the trees. Similarly, sometimes people get so used to certain problems, that they don’t see them anymore. We bring a different look to your manufacturing environment, normally identifying improvement opportunities that can increase OEE and throughput, and/or reduce costs in a sustainable way.

Unlike some other operational consultancies, we try to learn about the issues as best as we can, understanding each company is unique. We assume there is already an effort to solve the company’s biggest challenges, but somehow, they require an external eye to complement the existing knowledge. We don’t come with come in with a one-size-fits-all solution, looking for a place to apply. Nor we will just produce a pretty report without explaining how to implement concepts and ideas. Our goal is to help you every step of the way, ensuring the project will have substantial and tangible benefits hitting your EBITDA line, and you can continue just with the internal resources after we leave.

If you're considering hiring a consultant, we encourage you to do your research and choose people who have a proven track record of delivering outstanding results. By working with the right consultant, you can unlock the full potential of your business.

Would you like to discuss your specific manufacturing needs and how we can help?

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For more information:

Eduardo Schumann

+31 6 13 662955

www.schumannconsulting.nl

[email protected]

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