Effectively managing supply chains has never been an easy task. Unfortunately, it’s becoming even more challenging. Higher customer expectations are fragmenting supply chains and shortening cycle times, while high commodity volatility, supply chain vulnerabilities and changes in the regulatory and fiscal environment are putting the margins of logistics companies under pressure.
The key for manufacturers and logistics businesses to respond to the current challenges in supply chain management is to stop focusing on supply chain efficiency and start working on supply chain adaptivity and flexibility. While fully-integrated supply chains can provide great advantages, they may not be the most suitable approach to respond to the current challenges.
Big Data Analytics lift supply-chains but not every business is ready for it
As new data technologies and applications develop, more and more companies realise big data can really help increasing supply-chain resiliency. Indeed, supply chains generate huge amounts of data, which can be transformed into meaningful strategic and operational insights. Especially in the case of predictive analytics, big data allows companies in logistics to upgrade their forecasting capabilities and embrace innovative approaches such as high-definition demand responsiveness, smart deployment, and planned resilience.
Unsurprisingly, 97% of US executives states that big data analytics could benefit their supply chain. However, only 17% report having already implemented analytics in one or more supply chain functions. Security, privacy issues and the large initial investments required to embed big data analytics in supply chain operations worry many investors. Further, most companies today face a critical digital skills gap and lack of the necessary structured processes, which in turn prevents them from exploring, evaluating and capturing big data opportunities in their supply chains.
However, companies looking to embrace big data and unlock the power predictive analytics shouldn’t let those difficulties scare them. Hiring a team of data scientists can bring substantial competitive advantages that will totally pay back the cost of the investment. However, it’s true that data scientists are required to be very skilled and educated professionals, and these profiles are tough to identify and expensive to hire. Luckily, there is a simpler solution firms should explore: supply chain consulting.
What is supply chain consulting?
As companies lack the necessary skills, processes and know-how to transform their supply chains, supply chain consulting is emerging as a potential solution to the current challenges in supply chain management.
Supply chain consultants offer a combination of strategy and technology consulting services and often collaborate with third-party logistics service providers. Their aim is to help clients smoothly transition from a traditional supply chain approach, towards a more flexible framework that can create new opportunities and respond to digital disruption. Supply networks are a good example of a flexible supply chain approach. Often, this is achieved by launching the digital transformation of the supply chain and integrating new technologies within the client’s pre-existing assets and processes.
But what are the advantages of investing in supply chain consulting? By increasing supply chain flexibility and resiliency, consultants help seize new market share; gain greater control over procurement, consumption and production issues; and minimize the negative impacts of technological and market disruptions on revenues, costs and customers. Further, great supply chain consulting firms will usually also help optimizing global operations and developing the skills and capabilities of the supply chain workforce.
As such, supply chain consultants help logistics companies and supply-chain managers to address critical business issues, such as:
- - Enabling growth and increasing resiliency by:
- + Tackling supply chain vulnerabilities
- + Configuring the Supply Network based on current and future business needs
- + Accelerating supply chain velocity (time-to-market and lead time)
- + Gaining end-to-end visibility
- + Managing short term volatility
- + Educating workers on sourcing and supply chain optimization best practices
- - Driving competitiveness by:
- + Reducing supply chain complexity and improving information, financial, product and material flow
- + Optimizing inventory and storage
- + Reducing costs and improving quality, e.g. by building Design For Manufacturing (DFM) and Design For Assembly (DFA) supplier partnering relationships
- + Leveraging digital technologies to generate competitive advantage
- + Leveraging suppliers’ core competencies and develop long-term supply agreements to create competitive advantage.
- + Identifying, qualifying, and selecting optimal suppliers.
Big data is the key to success, supply chain consultants are the key to supply chain analytics
Overall, the biggest advantage offered by supply chain consulting firms is they help companies manage the delicate transition towards flexible, data-driven supply chains.
Today’s big data analytics technology is strong enough to completely revolutionize the way logistics and supply chain managers take their decisions. If you still have doubts regarding this statement, I warmly recommend you to check this article by McKinsey Consulting (it’s a very insightful piece of content even for those without any doubt). While it is definitely possible to internally develop the right skills, knowledge and approach to big data, embracing data analytics is a big challenge itself and consultants help businesses take a safer, cheaper and more gradual approach to supply chain analytics.
There is a long list of consulting firms that have specialized on supply chain consulting. Obviously, all major consulting superpowers, such as BCG, Accenture, Deloitte, PWC or Capgemini, offer supply chain consulting services. In 2018, the Dutch business journal Management Team classified supply chain consulting firms based on customer focus, product leadership and operational excellence. According to their survey, the top 5 ‘consultancy firms for supply chain management and logistics’ are the Dutch TNO Research Institute, Deloitte, IT service provider Atos, EY and KPMG.
When choosing your consulting partner, make sure you understand the different characteristics each firm has in terms of experience, methodologies and global reach and focus on your needs and objectives.