A New Consulting Model: Eliminate Waste
The elimination of waste in consulting is a contentious subject but one we are very passionate about. I am sure that executives find it odd that supply chain consultants are paid to eliminate waste from Asia to Ohio while at the same time operating in largely a business model that has not changed in 30 years. Absent off-shoring of software development activities, consulting is far behind the innovation used in the industries it advises. The services education and procurement aspect of the consulting model is ‘black box’, slow, and expensive. This brief will unpack weaknesses in this process and discuss opportunities and methods for waste reduction.
Historically, consulting has been an “account relationship” business where a few large full service firms maintain relationships with customer senior executives and are pulled in to solve problems based on that relationship. The firms offer a “one stop” solution for most business challenges regardless of industry, channel, process or technology. Marketing functions of these firms spend millions of dollars to keenly position solutions, marque names, pedigreed personnel, and broad success stories to apply to customer needs.
The weakness in this approach is that fit can easily be obscured. Today’s supply chain challenges require a unique mix of industry, channel, process, and technology expertise to deliver the highest value solution. The old model does not define the challenge this way from the beginning and relies on luck, time, or expense to choose the best solution. Our extensive experience implementing hundred’s of supply chain improvement projects has taught us that electronic component work content is different than apparel even though they both might be processed through the same WMS platform. Conversely, the order profiles, throughput, and volume characteristics for a 70 oz hydration pack flowing through a retail channel is be very different from an online channel. It is especially important for dependent supply chain networks to have the challenge defined with at least these four attributes to maximize business results and reduce risk.
The second major weakness is the selection process. The old model selects a professional services provider using three primary options: 1.) leverage the existing relationship with a large firm; 2.) use a third party to execute a selection process; or 3.) use internal resources to select a provider. As discussed earlier, the current status of supply chain’s make solutions an expert only business. Moreover, the specialization developed over the past decade in response to extended supply chains has produced a large pool of specialty firms and independent specialist. The first old model option is constrained to a single firm vs. selecting the best fit from the entire pool of specialists. The other old model options consume time and cash to select the best fit consulting solution. The model is flawed because it is not structured to systemically provide a fast, fact based selection of the best fit consulting solution matched to the specific supply chain environment.
A new model is emerging following trends in other industries like consumer goods where companies can make side-by-side comparisons of consulting solutions that are best fit to their supply chain challenges.
Click here to learn more about how we facilitate this new model and the benefits it can provide your company.