Selecting a supply chain management consultant

A primer for high-volume CP, Industrial, or Healthcare businesses?

Many management consultants claim to be able to perform a supply chain digital transformation or help companies manage costs and services. This document reviews some of the crucial considerations and tests for making a good selection.

Step one when selecting a supply chain management consultant?

Before you do anything to choose a consultant for digital transformation or other supply chain enhancements, create an evaluation spreadsheet that everyone involved in the process uses.? Allow every participant to have input before a “final” version.??

Step two when selecting a supply chain management consultant.?

Ensure you clearly understand the problem you want to solve. (Where the money is being wasted or service levels are not met).?

Understand the causes of excess costs and service failures. P&G and other leading companies conduct a “loss analysis” that considers all the factors involved in delivering to a customer.?

A?supply chain loss analysis?is a process used to identify, evaluate, and mitigate losses within a supply chain. This analysis helps organizations understand where inefficiencies, disruptions, or risks occur and how these issues impact overall performance and profitability. Here are some key aspects of supply chain loss analysis:

1. Identification of Losses: This involves pinpointing areas where losses occur, such as delays, damaged goods, theft, or inefficiencies in production and transportation.
2. Quantification of Losses: Measuring the financial impact of these losses on the organization. This can include direct costs like lost sales and increased operational expenses, as well as indirect costs such as reputational damage.
3. Root analysis involves investigating the underlying causes of these losses. This might involve examining supplier reliability, transportation routes, inventory management practices, and other factors
4. Risk Assessment involves evaluating the likelihood and potential impact of various risks that could lead to losses. This helps prioritize which issues to address first.
5. Mitigation Strategies: Developing and implementing strategies to reduce or eliminate identified losses. This could involve process improvements, better supplier management, enhanced security measures, or investment in technology.
6. Continuous Monitoring: Regularly reviewing and updating the analysis to ensure that new risks are identified and managed effectively.

By conducting a thorough supply chain loss analysis, companies can prioritize where to focus efforts.

After analyzing losses, one large CPG company identified and prioritized bridging the gap between what planning recommends and what operations can efficiently execute.? In this case, high transportation costs result from the planning system producing widely different volumes from one date to the next. We saw one client try to ship three loads one day and 24 the next on the same replenishment lane. This generated significant additional costs, as low-cost intermodal carriers couldn’t handle the excess volume. ? The solution was an add-on.? Even so-called best-of-breed planning software couldn’t create a plan considering real-world operational constraints and costs.

Interviewing supply chain consultants using the spreadsheet

When interviewing supply chain consultants, make sure that you meet the people doing the project, not just the sales team.?

Here are a list of things that should, at a minimum, be on that spreadsheet:

1. Proven Track Record: Look for consultants with successful projects across various industries. This demonstrates their ability to adapt and deliver results in different contexts.
2. Customized Solutions: Avoid one-size-fits-all approaches. Choose consultants who tailor their strategies to meet your specific needs and challenges.
3. Technology Expertise: Ensure the consultant is proficient with modern tools like predictive analytics, AI, and other technologies that can give you a competitive edge
4. Communication Skills: Clear and consistent communication is essential for aligning the consultant's efforts with your business goals
5. Reputation and Reviews: Check testimonials and reviews to gauge the consultant's reliability and effectiveness
6. Understanding Your Business Needs: The consultant should take the time to understand your specific supply chain challenges and pain points.
7. Industry-Specific Knowledge: Experience in your sector can be a significant advantage, as it allows the consultant to provide more relevant and effective solutions
8. Cost and Value: While cost is an important factor, focus on the value the consultant brings. The cheapest option may not always be the best regarding quality and long-term benefits.
9. Cultural Fit: Ensure the consultant's working style complements your team’s approach. This can enhance collaboration and overall project success.? Simply put, do you like them?
10. Long-Term Support: Consider whether the consultant can support your growth trajectory and provide ongoing assistance as your business evolves

A supply chain consultant working in high-volume industries should have a comprehensive understanding of:

1. End-to-End Supply Chain: Knowledge of the entire supply chain process, from sourcing raw materials to manufacturing, warehousing, distribution, and retail.? This includes understanding the journey a product takes from creation to consumption.
2. Consumer Behavior and Market Trends: It is crucial to gain insight into consumer preferences and market dynamics. This can help identify new opportunities, streamline product lines, and optimize marketing strategies.
3. Technology Integration: Proficiency with modern tools and technologies such as predictive analytics, AI, and IoT, which can enhance supply chain efficiency and responsiveness
4. Sustainability Practices: Awareness of environmental concerns and the ability to implement sustainable practices within the supply chain. This includes reducing waste, improving energy efficiency, and sourcing eco-friendly materials.
5. Regulatory Compliance: Understanding the regulatory landscape, including safety standards, labeling requirements, and environmental regulations that impact the CPG industry
6. Cost Management: Strategies for managing costs effectively while maintaining quality and meeting consumer demands
7. Risk Management: Identifying potential risks in the supply chain and developing strategies to mitigate them, such as diversifying suppliers and improving supply chain visibility
8. Collaboration and Communication: Strong communication skills to work effectively with various stakeholders, including suppliers, manufacturers, and retailers

Common Mistakes to Avoid

When selecting a supply chain management consultant, companies should avoid several common pitfalls to ensure they choose the right partner for their needs:

1. Choosing Solely on Cost: Opting for the cheapest option can compromise quality. It's essential to consider the consultant's value and expertise rather than just the price.
2. Skipping References: Always check references and case studies to confirm the consultant's expertise and past successes. This helps ensure they have a proven track record.
3. Ignoring Cultural Fit: The consultant's working style should complement your team’s approach. A good cultural fit can enhance collaboration and project success.
4. Overlooking Long-Term Needs: Ensure the consultant can support your growth trajectory and provide ongoing assistance as your business evolves.
5. Not Defining Requirements: Clearly define your requirements and objectives before selecting a consultant. This will help you find a consultant who can meet your specific needs.
6. Neglecting Technology Expertise: In today's digital age, the consultant must be proficient with modern tools and technologies to enhance supply chain efficiency.
7. Not selecting a firm that “teaches.” One of the most essential roles of a consultant is to leave behind a team that understands and can continue the work.? No consultant should ever be asked or need to do the same job twice.

To a hammer, everything is a nail.

Many supply chain consultants make most of their billings when installing software.? They have a big incentive to change existing software.? To avoid the need for frequently replacing supply chain software, consider the following strategies:

1. Thorough Needs Assessment: Conduct a comprehensive assessment of your current and future needs before selecting software. This helps ensure the chosen solution can scale and adapt as your business grows.
2. Consider enhancing rather than replacing. Can add-ons provide the needed functionality? Companies like AutoScheduler.Ai can significantly improve any WMS’s performance, increasing warehouse productivity by 15%
3. Vendor Selection: Choose a reputable vendor with a proven track record and strong support services. This can help ensure the software stays up to date and continues to meet your needs.
4. Customization and Flexibility: Opt for software that offers customization options and flexibility to adapt to changing business requirements
5. Regular Updates and Maintenance: Keep the software updated with the latest patches (especially security updates) and upgrades. Regular maintenance can prevent issues that might necessitate a complete replacement.
6. Training and Support: Invest in training for your team to ensure they can fully utilize the software's capabilities. Good vendor support can also help resolve issues quickly.
7. Integration Capabilities: Ensure the software can integrate seamlessly with other systems you use. This reduces the risk of incompatibility issues that might force you to switch software.
8. Scalability: Choose software that can grow with your business. Scalable solutions can handle increased demand without needing a complete overhaul.

Ask the question, “is there an add-on that can make my current software better?” and ask the same question to consultants that you interview.

Software isn’t as important as the implementation of digital transformation.

A McKinsey survey shows that planning software selection is less important than the implementation process. Thus, selecting the right partner for a digital transformation is very important.

Improving operations doesn’t have to be a complete digital transformation. An incremental approach can have more impact and faster ROI.?

www.provisionai.com