As people and businesses struggle with increasing costs, the quick answer for companies is not a good answer. Product managers who choose to pass along costs increase the risk of customer loyalty and miss an opportunity to improve customer relationships. So, what are the options?
Taking a longer-term view of customer relationships and investing time and resources into improving supply chain sources and efficiency is a better path than simply increasing prices. Better supply chain management not only helps during downturns but can help companies maximize profits in the long term.
Challenge of Supply Chain Experience
It is easy to say “cut cost” and “become more efficient,” but the reality is that if a supply change manager knows how to do it, it would already be done. Most supply chain managers are adept at managing the current process. Perhaps negotiating some value from current vendors can happen. However, the major supply chain transformations needed to modernize and leverage the available technologies and partnerships are beyond most managers. The very focus that makes them good supply change managers nearly prohibits them from being revolutionary in their mindset. Consistency and dependability are what companies look for in supplier relationships.
When Supply Chain Improvement Consultants are Worthwhile
Many companies shy away from using consultants. While there are many reasons, they mostly fall into a few categories.
My Company is too unique for consultants
There is a saying that there is nothing new anymore, simply different versions of the same things. While this may not be strictly true, it is true for the vast majority of companies. The reality is that the core operational structures for any company are not just familiar to, but deeply studied by professional consultants, including those in supply chain management. A company may call a function by a different name, but the functions themselves are the same. Before allowing the corporate ego too much sway, it is best to interview a couple of supply chain consultants and see if they catch on more quickly than your team thought possible.
We don’t have the bandwidth to execute a consultant’s plan
The days of consultants just handing clients reports are gone (unless the client asks for only a report.) Most good consultants develop plans, work with clients to execute the plan, and have training available for clients to handle the ongoing management. This paradigm shift is great for clients in several ways.
- First, the plans are no longer pie-in-the-sky, outrageous numbers. There was a time when consults could claim to be able to save clients crazy amounts of money with their plans and say it wasn’t realized because the client didn’t execute. Today, plans are more reasonable because they have to be attainable by the clients AND the consultants who help develop them.
- Second, as the plans are implemented, the architects of the plan, the consultants, are present to see what adjustments need to be made. Since any plan likely needs amending as it is executed, having the consultants present allows them to “own” that part of the process.
- Third, people with supply chain transformation experience are riding the train alongside the client’s team. They know what to expect when things are getting out of alignment and how to take corrective action. Without the experience, things can get far enough out of hand as to be unsalvageable.
Hiring a Supply Chain Consultant
Interview consultants and their past customers. Every consulting firm will have a solid portfolio to show you success. However, a consulting relationship is not only about the results but also about how the results are achieved. Are the cultures of your firms compatible? Will they provide the level of communication you will require? Are they accountable for their results? The specific questions you ask are derived from your industry, objectives, and expectations. Just ask as many questions as you need to feel comfortable.
Beware the industry specialist. Some consulting firms will claim an especially deep knowledge and experience in your industry. On the surface, this may seem great. But, the narrow focus also means a narrow experience. Cross-sector learning can provide valuable insights into operational improvements. Look for firms that have a broad range of success.
