Whilst outsourcing has always been prevalent in the logistics and supply chain sectors, there has been a marked increase in the requirements of businesses in all sectors, for independent specialist consultants.
This is not just due to economic slowdown or uncertainty, making companies more cautious in employing permanent resource, but mainly due to the diversity, unique requirements and expectations of the modern supply chain.
Never has so much attention been focused on taking cost out of all aspects of the supply chain as well as reducing the effects on the environment, whilst of course achieving higher levels of customer satisfaction – a tall order for any business.
With so many different aspects of the increasingly complex supply chain to consider, the number of specialist project requirements increase and it is not possible for one person within an organisation, (whether a permanent employee or an interim contractor), to have the skills and expertise to successfully optimise all of them. As the supply chain is broken down into smaller identifiable elements, there is a greater need for more specialist expertise to ensure best practice.
It has also become more evident that a number of businesses have reduced resource in some areas to such an extent, in an effort to minimise costs, that they are now finding they are unable to operate to maximum efficiency and potential as the remaining staff are being asked to “multi-task” (often in areas outside of their core competence), therefore losing focus on their key roles and functions. This in most cases is a short term cost saving solution, but unfortunately has the medium to long term adverse effect on the business as both the specialist projects and the key business objectives are diluted; reducing their effectiveness and worth, preventing the business from achieving continuous improvement and growth.
Simple economics and common sense dictates that rather than employing a permanent team of staff to work on a few short to medium term projects, more and more businesses are opting for the more flexible and cost effective approach of using sector specialist independent consultancies.
Logic dictates that using an independent consultancy specialising in a particular area or discipline will be more effective, (cost and operationally), than using someone who has to learn about the area of expertise during the course of the working day.
The days of the general “Management Consultants” who claim to be able to improve any aspect of your business by writing lengthy (and largely theoretical) strategy reports, too “all encompassing” to practically implement are, thankfully, behind us. They still exist, but are not really in touch with the requirements of the modern streamlined business culture, and contradict the proven and sound logic behind using sector specific resource through experienced independent consultancy firms.
The modern specialist consultancy business should therefore be focused on the key project objectives, use proven industry experience and methodology from their own expertise, and focus not only on developing a strategic solution but also on the implementation of it and the handover to the client of strategy ownership as soon as it is feasible. This minimises cost to the client and ensures that the improvements to their business, and that the return on investment into specialist resource, can be realised as soon as possible.
For example a key area of unnecessary and wasted cost within the supply chain across all sectors is often within Returnable Transit Packaging (RTP)and Materials Handling equipment fleets, whether they are owned and managed internally or rented from and managed by a third party. The client therefore needs to choose specialist independent Materials Handling Consultants with expertise in RTP management and pooling implementation, with the ability to design, develop and implement equipment pooling processes, facilitating improved equipment control, user accountability, optimal logistics and supply-chain infrastructure, repair & maintenance operations and overall RTP fleet cost control. This should have the result of a fully developed and implementable solution providing significant savings to RTP fleet operations, reducing losses and damage, as well as reducing fleet sizes through improved process, reducing dwell times and therefore increasing trips per RTP unit. RTP fleet management is also a key area which can have positive environmental impact as a by-product of the original strategy objective of minimising costs. Everyone is a winner (including the planet), thanks to the specific RTP expertise of the specialist independent consultancy.
During good economic growth, as we have experienced over the last few years, businesses can prosper and grow financially focusing on sales and revenue, without perhaps the operational focus to ensure that best supply chain practice is implemented as the business grows. It is only when the growth slows and the business is analysed in more detail that one realises that they supply chain has become fractured, cumbersome and expensive. This is a potentially very damaging situation for smaller businesses that have grown quickly without any true understanding of the impact of their supply chain operation on to their costs. Often in these cases a simple analysis and implementable strategy recommendation by a Supply Chain specialist will enable the client to identify where savings can be made and the supply chain streamlined to suit their business, whilst it remains flexible for economic boom or recession. The answer is often in reducing handling and transport requirements, and centralising more functions but with the introduction and adherence to standard operating procedures (SOPs) and measuring the continued performance of the business through simple Key performance indicators (KPI’s).
Thanks to the expertise of Specialist Independent Consultancy businesses, the needs of the client and the environment can continue to be satisfied.