What Is Supply Chain Consulting? A Guide to Outsourcing Logistics Management Services
Do you feel like you need a fresh set of eyes on your supply chain?
Maybe you understand challenges your supply chain is facing but you are struggling to generate effective solutions. Or maybe you only see the symptoms of inefficiency — elevated costs, poor performance — and you’re unable to identify the causes.
Supply chain consulting might be the answer you’re looking for.
According to our original research study on supply chain outsourcing, 63% of shippers have worked with supply chain consultants, and 82% of those shippers found that experience valuable.
Consultants can add value to your internal logistics team and improve efficiency across your supply chain in several ways. Learn what these specialists do and how they might benefit your business.
All About Supply Chain Consulting
What Are Supply Chain Consultants?
A good way to think about supply chain consultants is as experienced professionals who apply their insights to help you understand your supply chain — and how to improve it — better than you do on your own.
They may or may not actually have the title of supply chain consultant — some other roles you may come across who perform these functions are supply chain engineer, supply chain analyst, supply chain specialist or supply chain manager.
Whatever the name, some characteristics you should look for in a supply chain consultant are:
- Data-driven. Are their findings and recommendations backed by thoughtful analysis data, both yours and from the broader logistics industry?
- Forward-looking. Do they go beyond fixes for short-term problems and think about ways to set you up for ongoing success?
- Big-picture thinker. Do they understand how the different links in your supply chain work together to form an effective whole?
- Industry experience. Did they come to supply chain consulting from other logistics roles rather than a more general business or analytics background?
Where Do You Find Good Supply Chain Consultants?
The key part of the term “supply chain consultant” is “supply chain,” not “consultant.”
When you think about consulting, you probably picture of one of a small handful of big-name companies who offer professional services across a wide spectrum of industries.
While you can engage these companies to work with your supply chain, you’re more likely to pay a premium to do so and less likely to wind up working with a real, deeply experienced logistics professional than you would at a third-party logistics provider (3PL).
The supply chain consultants you’ll find at 3PL providers have often spent the early parts of their careers in sales or operations roles, on the front lines of the day-to-day decisions and tactics that keep supply chains moving. This experience helps them understand both broadly and granularly how the many moving parts of a supply chain work together and equips them to truly appreciate the impact management decisions can have on a logistics team.
What Are Some Signs You Should Talk to a Supply Chain Consultant?
It can be difficult to know when to look outside your own organization for help. And it’s even trickier when you’re not outsourcing for a specific task — say procurement or special project support.
There are some warning signs you can look out for, though, that indicate you might be ready to consult with a supply chain expert.
Trouble staying within your logistics budget.
Transportation costs that frequently exceed your targets or projections are a clear sign that you’re not operating as efficiently as possible. There could be a number reasons for elevated costs — unfavorable rates, inefficient routing, unreliable primary carriers — and a supply chain consultant can help you analyze your data to determine the true root cause.
Inability to meet your key performance indicator (KPI) targets.
If your performance is suffering for your key metrics — especially ones related to on-time delivery and pick-up — you’ll be faced with the additional headache of unsatisfied customers. Consultants can help you set realistic targets, communicate them clearly with providers and customers, and find solutions to specific issues.
Overworked or frustrated employees.
If the people who handle the day-to-day operations of your transportation or warehousing network are showing signs of low morale, it’s probably time to check in on their structures and support. Supply chain consultants can help you streamline processes to protect your team’s time and sanity.
Rapid business growth.
You don’t only need consultants when you’re struggling — sometimes it’s because everything is going great. If your business is taking off and your supply network is getting stretched beyond the volumes it was originally designed for, a consultant who has lived through this kind of growth can prepare you for what’s next and guide smart decisions.
How Can Supply Chain Consulting Help Your Business?
You can bring outside logistics expertise to a wide range of challenges that your internal team may be facing. Here are some of the most common ways shippers engage supply chain consultants.
Network Optimization
This term is almost as broad as “supply chain consulting” — it doesn’t really refer to one specific thing, but rather to modeling your current network and examining multiple ways to make your supply chain more efficient.
When you work with supply chain consultants for network optimization, you might ask them to focus on any of the following areas of your supply chain:
- Facility location recommendations.
- Route optimization.
- Product flows.
- Freight consolidation.
- Private or dedicated fleet management.
Across each of these categories, consultants can digest your current performance data, compare it to your targets and to benchmarks from industry-wide data, and advise you in the creation of actionable plans for improvement.
Volatility Profiling
Consultants can help you understand how cyclical or acute conditions in the wider economy impact your supply chain.
Volatility profiling is a great service for you if:
- You are in an industry with seasonal demand patterns and identifiable surge periods (holiday retail surges, for example).
- You are in an industry with regional and seasonal supply surges (fresh produce, for example).
- Your transportation network includes regions subject to extreme weather events.
- You ship in lanes that are subject to seasonal surges even if they don’t necessarily impact your own business.
High volatility in your supply chain makes it more difficult for you to run accurate bids — if the rates you agree to aren’t competitive during surge periods, you’re probably going to see declining tender acceptance rates.
By working with supply chain consultants, you can strategize your procurement to account for volatility or even optimize your facility locations to make your lanes less subject to factors that can jeopardize capacity.
Fleet Optimization
If you have a private or dedicated fleet, supply chain consultants can help you utilize it as efficiently as possible while keeping its operational costs down.
If you bring in third party experts to take a look at your fleet, you can ask them to help you:
- Optimize routes to conserve fuel and minimize empty miles.
- Understand the best size for your fleet and whether you should add or sell equipment.
- Balance your network regionally to keep your trucks moving.
- Set up and manage a for-hire backhaul program that can generate incremental revenue.
If your consultants work alongside a brokerage at a 3PL, they can even put you in touch with carrier sales reps who can help you find and book backhaul freight.
RFP Management
Our supply chain outsourcing research revealed that 72% of shippers outsource some or all of their procurement to a third party.
Why do they do it? To save their internal team’s time over the length of the procurement event and to give their bid a greater chance of having a successful outcome.
Supply chain consultants can help you:
- Identify new carriers to add to the mix with your incumbents.
- Understand the current rate environment and set realistic targets.
- Make informed award decisions once all the bids are in.
And if you work with a 3PL for transportation procurement consulting, they can also take over some of the day-to-day work of managing the event — communicating with carriers, collecting bids digitally and more.
Carrier Scorecarding
If there’s one thing good supply chain consultants understand, it’s how to rate performance and identify potential areas for improvement.
Carrier scorecarding taps into just this skill set by evaluating the providers in your network on a regular basis about whether they’re meeting quantitative performance targets and providing actionable steps for improvement.
You can get assistance setting KPIs, tracking carrier performance against them and strategizing how to communicate when improvements need to be made. The right help can prepare you to approach these important check-ins fully informed and in a spirit of collaboration.
Our Consultants Can Strengthen Your Supply Chain — Just Ask Them
If your logistics costs or performance aren’t where you think they need to be, we’re here to talk about what you’re experiencing and how you’d like to improve.
Our supply chain consulting team is made up of experienced logistics professionals who are just as skilled with building successful relationships in this dynamic industry as they are with a spreadsheet or a transportation management system (TMS).
Fill out the form below with a description of your current supply chain challenges and we’ll respond promptly to get the conversation started.