Your market is changing, the pressure is mounting, so who do you turn to? Johanna Parsons on the rise of the consultants.
Some of those benefitting from the heightened pressures of today’s markets, are the people offering to make it all better. Consultants widely report being busier than ever, with a noticeable upswing in logistics and supply chain services.
The economy has been tough for a long time, but markets are also now undergoing massive change. We are in the midst of an explosion of new business channels, and new ways to interact with clients are putting increasing pressures on fulfilment and customer service operations.
With profits at stake, firms recognise that they can’t afford to fail, and that’s when they call in the consultants. “We have specific skills in logistics and supply chain that are in short supply. We can accelerate their objectives,” says Steve Wilson, Capgemini UK’s vice president and head of supply chain.
And of course, appealingly, “because of the nature of consultancy, we don’t become a part of a fixed cost”.
John Perry of SCALA says multi-channel retail, and economy enduced reorganisations and mergers are all big factors, “we’ve seen a huge uplift in the last 12 months, and a lot of that work is driven by the changing market place.”
And he maintains those changes are encouraging businesses to be more open minded. SCALA runs a best practice forum for retailers and manufacturers and Perry sees a growing willingness to share experiences and even to collaborate with competitors in the aim of “they say it’s the brands on the shelf that are in competition.”
Diligent clients
Across the board, consultants agree that as global economic pressures mount, clients are getting increasingly diligent in their approach.
“Clients are being much more careful about committing to a project and getting a result… clients are holding consultants to account, and if you’re just selling a report your life will be a lot more difficult these days,” says Andrew Shaw of BSG.
Les Brookes, chief executive of Oliver Wight EAME says clients are tending to be clearer about their requirements. “Clients tend to be quite specific about their needs now and there has been a general rise in requests for proposals and quotes that much better set out their expectations regarding approach, problem statements, deliverables etc.”
And Wilson explains just how particular they can be: “Clients are taking the time to select the right individuals in a consultancy team. They’ll interview much more deeply than five years or so ago, beyond the leaders. But we think that’s a good thing, because the chemistry is so important.”
He says that firms are very focused on the detail of their requirements, down to the number of pages a report should be, and often use social media like LinkedIn to research the consultancy team before they even meet, looking for personnel with the right background and experience.
Jolyon Austin of Accenture agrees that the background of each team member is a key concern. “Within our team I place a lot of emphasis on industry experience… Our clients expect more and more deep understanding.”
And they often bring their own understanding of consultancy to bear too, as so many consultants make the switch into industry. Shaw says: “I often find my client is an ex-consultant who already has ideas about what they want to do.”
In these cases he describes the role of the consultant as to confirm or add weight to an idea, to work out the details, to develop viable plans and to put them into action.
This level of scrutiny from clients is also a reflection of the pressures they are under. The process of hiring a consultant is taken more seriously than ever before, often having to gain approval at CFO level, and accountability, targets, and acceptable costs are all set in stone – often before the consultant is even called in. But this is all to the good for the consultants, some say.
Wilson reckons that diligent clients are much more reasonable and transparent to work with, and that there is less room for misaligned expectations. And, he says: “They’re much more focused on what they need to provide from their side to make the project work.”
“Buyers today are more savvy than ever before,” says Brookes. “They not only have a better understanding of their own business requirements – the business pains and possible solutions – but are better clued up on consultant selection and negotiations.
“However, there’s still a long way to go… You need to weigh up not just value for money on time the consultant spends to change things, but whether that change is going to be sustainable. Only then will you truly get your money’s worth.”
And however conscientious the consultant-facing team is, enacting change usually requires co-operation from everyone else too.
“Changing the culture of an organisation can take time, determination and commitment across the organisation,” says Brookes.
Crispin Mair, co-founder and director of Crimson & Co, says that for him, there is no better challenge than starting with a new client to the overtures of “not another set of consultants… no one can fix this…”
This attitude is far more common than many businesses realise, according to Hugh Williams, of Hughenden Consulting. “People don’t recognise that staff can be resistant to change, and not understand how to change.”
And it is a real challenge for consultants when firms are not so in-tune with the reality of their operations or staff. This gives rise to the tendency to understate problems. “This means that the remedial actions can be under-scoped and ultimately require much more support than is initially envisaged,” says Mair.
“If the consultants are doing their job well, then the client is happy to extend their support to make sure that changes are bedded down and the benefits continue to flow. The counter position to that is that clients become frustrated and disillusioned if their consultants are not able to demonstrate performance improvements within the allotted timescale, and part on bad terms.”
Out of touch
“We put a lot of sales effort into making sure the predicted outputs are defined well. But that doesn’t mean you don’t get unexpected outcomes,” says Alan Braithwaite of LCP Consulting.
He agrees that problems can arise when the client is out of touch with its own business, and says that LCP has been known to reject sales if the brief betrays this. It’s just not worth managing such unrealistic expectations.
Gwynne Richards of Apprise Consulting gives another example of how entrenched attitudes can be the root of the problem. “We recently quoted to become involved in an outsourcing project with a client where they had decided to move from their existing provider and find a new provider.
“The service levels were reasonable however relations were beginning to break down. At the time we felt that this was the wrong decision and that further discussion with the incumbent would be a better course of action. We decided not to pursue the business in the end as we felt it was the wrong decision to go ahead with the tender process.”
Outsourcing projects are a common reason for calling in the consultants. The retail landscape today involves multiple sales channels that puts huge pressure on fulfilment operations, and service expectations have gone through the roof.
“Customers want more for less,” says Shaw, who says clients are using their own consumer experiences as benchmarks. “Suppliers no longer compare themselves to each other, they look outside the sector.
“Online service in any industry is now expected to rival the likes of Amazon. You pick the best consumer experience out there and aim for that.”
That’s a huge pressure, and it’s no wonder that firms for whom logistics is not a core function are seeking expert help, from consultants to 3PLs.
The buying power that even large retailers and FMCG firms have for logistics equipment is dwarfed by the massive 3PL sector. The economies of scale available to specialist logistics firms are a tempting prospect.
Specific skills
This transition requires careful management, and Richards says it’s another instance where clients demand a consultancy team with a very specific skill set and experience.
“Managing an outsourcing tender is a good example where companies value the involvement of consultants who have either worked for 3PLs or have been involved in outsourcing in the past.”
Jonathan Gibson, head of logistics at Crimson and Co, says that one understandable side effect is that businesses lose their in house logistics skill, as the jobs become redundant and staff are TUPEd over to the 3PL.
“The third party comes in and takes over, and the customer loses contact with the real costs, and the real activity.” Crimson offers an activity management service in response to this, to work out what the real costs of an operation should be, and then work towards achieving that.
As with everything else, the expectations are for more and more sophistication. More than just taking advantage of new technology and equipment, consultants are now looked to for in depth transformations to keep pace with rapidly evolving markets.
As firms face the strain of rising fuel and labour costs, and social media and new sales channels revolutionise the services businesses are expected to provide, it’s no surprise that consultants are doing a brisk trade.
Strategy- Hallmarks of dynamic operations
Jolyon Austin of Accenture says that as volatility and the pace of innovation increases, supply chains have got to be responsive. So dynamic operations will be the winners of the future.
“It’s about being more sophisticated about potential scenarios for the future, and how to optimise reactions.”
The economy is putting pressure on businesses to take a joined up approach, and increasingly firms are more self aware, and amenable to change. Putting it into practice is the challenge.
“We help companies work out how to use information in a meaningful way… but some clients can now do that for themselves.”
He shares his four hallmarks of successful dynamic supply chains.
1. They will have implemented an adaptable structure.
2. They will have agile execution mechanisms in place.
3. They will have developed the ability to innovate and react with flexibility to changes and disruption.
4. They are able to turn insight into action. They understand how best to read what is going on, but also how address this.
End-to-end renewal for Mölnlycke
Mölnlycke Health Care took on LCP consulting to support its transition to a new end-to-end supply chain operation from concept, through design and implementation, to outcome analysis.
According to Mölnlycke’s global logistics director, Lars Syberg: “We wanted to create a scaleable, customer-centric supply chain, but didn’t have all the skills internally.”
Mölnlycke had to address supply chain management issues caused by cultural differences and localised operations.
“LCP were really aware of the cultural challenges and barriers in the company,” states Syberg. “They became heavily involved in stakeholder management and communication during the re-modelling and got to know the company intimately.”
John Lockton, LCP’s senior advisor on the Mölnlycke programme, said the greatest challenge was a common one: “Divisions or departments often have different perceptions of how change should be undertaken in the business generally and supply chain in particular.
“People often underestimate the value of needing to get both the technical solution and the change process accurate and right.”
But the end result was a success, and Syberg said: “This is, without doubt, the toughest journey I’ve ever been part of in my career, but it had a fantastic outcome. LCP gave birth to the first idea and helped us implement it. We could never have done it without them.”
Case study- Appliance of science
PJH Group, the bathroom, kitchen and appliances supplier, enlisted Davies & Robson for a review of its warehouse systems and processes.
PJH recognised that its warehouse management system and processes required improvements to complement its physical changes to its Cannock distribution centre.
Davies & Robson’s consultants then recommended a programme of process improvements and system enhancements, including a real-time put away algorithm, a pick-face replenishment prioritisation algorithm and a pick-face replenishment optimisation routine as well as modifications to the data displayed on the RF guns during picking routines to improve operator decision making. PJH is now implementing Davies & Robson’s three-phase project plan to deliver these improvements, which is expected to result in substantial operational savings.
Richard George, marketing and IT director at PJH, said: “We already knew broadly where improvements were needed and brought in Davies & Robson to help us pinpoint specific opportunities and what actions were needed to exploit these.”
Case study- Absolut training programme
The Pernod Ricard Group is a global wines and spirits company with affiliates in 70 countries, over 19,000 employees, and brands such as Jameson whiskey, Beefeater gin and Absolut vodka.
It has a centralised education programme for middle and senior managers, but needed training resources for supply chain managers coming from different business segments.
Supply chain planning director Rémi Ameline, said: “Pernod Ricard is a very differentiated group, having acquired and merged with many companies over the years and therefore we had a large range of skill levels throughout the staff.”
The main aim was to reach one standard way of thinking about supply chain management for the group and to upgrade people’s skills and understanding of what supply chain planning is.
“We needed a partner who could supply an education session that included a mix of theoretical and practical skills, which could be easily transferred to the various affiliates, as the skills would need to be applied in the attendees’ home countries,” said Ameline.
They chose to work with Hughenden Consulting, which offered courses run in English, by two people, and support materials and documents on its web site.
Ameline says a key benefit has been the emergence of a supply chain community within the group, with people interacting to share best practice around the company.
“The project has been an ongoing one and not just related to quick wins,” he said.
“Hughenden Consulting are now globally in the loop and we are able to approach them for advice about other areas of the business… their knowledge of our business and of our employees has reached a level where we see them as a partner, not just a supplier.”
