7 Things to Consider Before Selecting a Supply Chain Consulting Firm
There are hundreds of consulting firms out there, and each will claim that engaging them will significantly improve one or more aspects of your Supply Chain.
Like any other product or service, consulting firms come in all shapes and sizes, with a wide variance in ability, cost and quality. If you’ve decided that it makes sense to invest in outside expertise analyze your Supply Chain, how do you select the right partner?
You can begin by considering the following items:
Do they work across the entire Supply Chain?
Lots of consulting firms will claim to be Supply Chain experts, but far fewer work throughout the entire Supply Chain. This can be a crucial consideration because those firms that only work in or understand part of your Supply Chain are going to focus all of their solutions on their area of expertise leaving other crucial areas of your supply chain unaddressed.
How do they make their money?
Many consulting firms will price services very aggressively, because they have an ulterior motive – they are a reseller of equipment/software, or they have some sort of “exclusive relationship” with specific vendors that provide them a finder’s fee or other compensation for bringing business to their partners.
Clearly, firms that have these types of relationships will have a conflict of interest that can result in their recommended solutions including the products that benefit them, even when they may not be the best solution for you. For example, if a firm has an “exclusive partnership” with a conveyor vendor and they are designing your facility at a stunningly low price, you can bet that their design is going to include lots of conveyor. Similarly, a firm that is evaluating three software packages and is a reseller of one of them is going to steer their clients to the software that directly benefits them more often than not.
References and Experience
Has your prospective partner “been there and done that”? Have they worked in your industry? Have they done projects on the same scope as yours? Have they worked with the processes, equipment and technology involved in your project? Do they have the knowledge, experience and resource depth to meet your needs?
Ask your prospective partner to provide you with several examples of past engagements that are similar in size and scope to yours, then select the ones you would like to speak to or visit from that list.
Long-Term Customers with Multiple Projects
This is a great indicator of what kind of work a company does and what kind of relationships they have with their clients. A company that does excellent work and delivers value on every engagement will be called back for multiple projects at the same client.
Ask your prospective partner for examples of clients where they have been involved in multiple projects. When you speak to those clients during reference checks, ask what it was about the consulting firm that prompted the client to bring them back for multiple engagements.
If a consulting firm can’t provide you with a number of clients that they’ve been engaged with more than once, that should be a major “red flag”.
Project-Based or Staffing-Based
Does your prospective partner function as more of a “staff-augmentation” firm, or do they focus on managing projects that have a defined scope and an ending point? How does that line up with your requirements?
Typically, a firm with a focus on staff augmentation will have a lower hourly rate, but their resources are often dependent on the client to provide management and direction. A project-based firm will usually be more comfortable driving or leading a project, but will usually command a premium rate.
Employee Consultants or SubcontractorsMany consulting firms will speak vaguely and generically about their “resources”, without being very clear about what types of resources they have. It’s critical for you to understand whether those resources are full-time employees or independent contractors.
Firms who have employee consultants are typically going to be more stable with resources, meaning that your project is more likely to finish with the same team members that you started with. Firms that staff their projects with independents can sometimes be more competitive on rates, but often have difficulty maintaining staffing, as independents tend to be less loyal than full-time employees.
Is your company culture a match for your partners, or is there a possibility of a clash? What sizes of clients do they typically work with? How formal or informal are they? Will you have access to their Senior Leadership if/when you need?
Overall with all the options on the market today selecting the right Supply Chain Consulting Partner for your operation can be an arduous task. However, make sure to do your research and ultimately pick the partner you feel you can trust.