Supply chain consultants – how can they impact our bottom line?

Profitability is impacted at every stage in the supply chain where processes are running at a less-than-optimum level. Lack of visibility due to poor or limited information is a key contributor. Paying inflated prices, escalating labor rates, high inventory holding costs, too many product lines, poor transportation choices, the list goes on. Supply chain consultants are here to help you.

What keeps supply chain executives awake at night?

Data and information are vital to an efficient supply chain. A major concern is the lack of critical supply chain process visibility. Often this is due to no enterprise-wide information system and a low level of automation in areas such as forecasting, logistics and inventory management.

Focusing too narrowly on cost savings rather than reducing Total Cost of Ownership (TCO), not working on improving supplier relationships and ignoring sourcing risks, result in less than expected savings from the sourcing process.

How does a supply chain consultancy provide answers?

• Strategy and Redesign. Consultancies look for ways to streamline and rationalize the supply chain to impact the bottom line through increasing speed of operations and service, reducing complexity and increasing flexibility using technology.

• Sourcing and Procure to Pay process. Savings of up to 40% on purchased goods can be realized through streamlining the procurement process. Sourcing direct materials from low-cost countries helps companies to improve their competitiveness.

• Process Optimization. You can optimize the flow of goods and services by getting help to redesign key elements of the order-to-delivery process. Improvements are achieved by consultants using expert tools such as Six Sigma and Lean manufacturing techniques.

• Inventory Management. Inventory costs are impacted by redundant and slow-moving stock, poor demand planning and erratic production. Attention to formalizing demand planning, fine-tuning the number of stock items and managing wastage will impact the bottom line.

• Organization Restructure. As companies become more global, new capabilities and a broader knowledge of industry markets are required. Decisions need to be made on how to deal with opportunities and how to stay competitive in an inflationary environment.

Measuring success of a consulting project

Typical projects have a bottom line impact which consultancies will project as their deliverables. Some of these could be

• Up to 20% cost savings in procurement of specified commodities
• 1% to 5% of improvement in revenue through customer interfaces
• Inventory reductions reducing warehousing costs by up to 30%

Supply chain consulting can provide bottom line savings.

Consultancies vary in size, capability and price. They also vary in their range of services and level of expertise. Do research your options and take note of others’ experiences before committing time and money.

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