Practical Use Cases
What Do Supply Chain Optimization Consultants Do?
Supply chain optimization consultants analyze a supply chain and offer recommendations on how to boost performance, lower costs, and increase profitability. They bring deep supply chain optimization insights across the entire supply value chain, including sourcing, manufacturing, storage, transportation, and end-customer fulfillment. They work closely with companies to uncover how to harness factors like technological advancements and strategic partnerships to accelerate supply chain performance.
While in the past, companies considered their supply chain as just another cost center, a supply chain optimization specialist can help transform this liability into a strategic asset. By creating data-driven what-if scenarios, they can demonstrate the impact supply chain optimization can have on a companyβs bottom line. From this optimization process, a company can better focus on its core strengths, harnesses technology to its advantage, and build a more responsive and sustainable supply chain.
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Why Hire Supply Chain Optimization Consultants?
Supply chain optimization specialists play a crucial role in helping a business remain competitive in a rapidly transforming business landscape. As technology disrupts traditional supply chain models, companies can tap into supply chain consulting assets to better align people, processes, and technology for better performance. With a high performing supply chain in place, a business is better placed to respond to competitors, disruptive trends like social commerce, and changing customer needs like the “Amazon Effect.” By working with a supply chain optimization consultant, a company can actively innovate its supply chain processes by integrating inventory analytics, social listening tools, and real-time 3PL data sharing.
Further, supply chain optimization consultants offer crucial insights and support in the following areas:
Supply Chain Design
Supply chain optimization specialists design optimization processes such as where to locate manufacturing and warehousing facilities and how inventory will flow between these facilities. They also map these designs onto a company’s strategic goals, such as demand forecasting, supplies establishment, and manufacturing and transportation operations. Through the supply chain design process, a company can understand how to better align inventory control, order fulfillment, demand planning, customer service and decision making with identified business KPIs and realize more sustainable performance results.
Supply Chain Planning
In the supply chain planning phase, the supply chain specialist develops an optimization deployment plan. Within the plan, they address factors like inventory planning, asset coordination for better delivery, just-in-time manufacturing, and customer satisfaction metrics. The primary outcome of the planning phase will be an action plan that balances supply and demand in a way that creates cost efficiencies and bolsters profitability. Companies that rely heavily on their supply chain also benefit from supply chain specialists assisting them in creating a leaner and more decentralized supply chain that offers improved resilience and adaptability.
Supply Chain Execution
At the execution phase, supply chain specialists play a pivotal role in maximizing value capture from an optimization plan. Here, they deploy the plan across manufacturing, warehousing, inventory management, transport, trade partnerships, and other supply chain assets. Some of the considerations they bring to bear include warehouse and inventory management, transportation and logistics management, local and global trade management, and order management systems. Through a well-executed supply chain optimization plan, supply chain optimization consultants help a company significantly improve metrics like freight cost per unit, freight bill accuracy, and inventory turnover ratios (ITR).
Tips on How to Hire Supply Chain Optimization Consultants
Supply chain optimization specialists bridge a mission-critical gap within a company’s supply chain ecosystem. They bring a fresh perspective into an often rigid and outdated process. While companies tend to have functional supply chains, working with a supply chain specialist can radically transform supply chain outcomes. As an outsider looking in, supply chain specialists see efficiency gaps, information silos, unnecessary overheads, bloated inventory, and misalignment with customer trends. By bringing in a specialist, a company can refocus its resources and pursue a leaner and more competitive supply chain approach.
Identifying the right supply chain optimization specialist for your project requires a keen understanding of how your project needs match their technical capabilities.
During the selection process, we recommend evaluating your picks based on the following capabilities:
Strategic Optimization
The best supply chain optimization specialist for your project will be able to align the supply chain optimization process to strategic company goals. This means aligning manufacturing, warehousing, and distribution optimization goals with high-level objectives like customer needs and profitability benchmarks. By working closely with management, the specialist will recommend supply chain changes and the investments required to realize such changes. Further, they will have the capacity to cascade the optimization goals to different functions within the supply chain network. From this strategic focus, the specialist will help a company not only optimize its supply chain but explore wider-reaching changes at a higher corporate level.
Tactical Optimization
The best supply chain optimization experts create one to two-year tactical plans to support an overall long-term optimization strategy. The plan will cover factors like resource allocation, workforce refitting, facility locations, and supplier relationships. Using a timed-step format, the consultant will help the company know when to implement which phase of the plan, as well as what KPIs to use to measure progress. Further, the expert will provide a tactical plan with provisions for bringing in third parties like 3PL providers and technology vendors to additionally support the supply chain optimization push.
Operational Optimization
The best supply chain optimization pick for your project will be able to translate high-level strategic and mid-level tactical plans into daily activities like programs, policies, and work plans. Operationalizing the supply chain optimization plan will unlock resources and performance metrics that feed into an optimization feedback loop. By creating an operational optimization plan, the specialist will translate a tentative plan into practical, tangible activities and results. The specialist will generate and schedule daily, weekly, or monthly optimization activities that mesh into your current supply chain operations.
Contingency Optimization
Every supply chain optimization plan must consider worst-case scenarios. These are instances when a key supplier is lost, a transport channel gets disrupted, or a global crisis ensues. The best supply chain optimization specialists will develop an optimization contingency plan that can absorb such shocks while cushioning the core business. Using computer modeling, they will run alternative scenarios and compare costs, profitability, and potential disruption to other parts of the company. They will also factor in issues like customer service, cost-to-serve, cash flow implications, and overall effectiveness. By creating a detailed contingency plan, they provide a baseline upon which to build future optimization efforts.
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