Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
Although "third party" has become industry shorthand for contract logistics service provider, LSPs are not the only third parties lurking in the underbrush of supply chain management. The weeds are also full of management consultants.
They're everywhere. They're at every conference, seminar, and convention. They're on the Internet with Web sites, e-newsletters, webinars, and spam. They're in all the trade publications—and that includes the authors of this piece.
Who are they? What do they do? Do they help—or hinder? Is there really a value proposition involved? In answer to that last question, we contend that management consulting at its best is a high calling and a noble endeavor, requiring enormous amounts of both talent and integrity, as well as strong senses of mission and urgency. At its worst, it is an embarrassment on a good day, and a scandal when all the results are in.
Big fish in the global pond
As for who they are, consultants come in all shapes, sizes, and flavors. But in general, a consultancy will take one of the following forms: mega-firms, other big (but not enormous) players, small/midsized houses, sole practitioners, and academics.
Let's start with the mega-operators. This category is made up of huge organizations with thousands of people. They may be partnerships; they may be corporations. They are increasingly multinational.
Many have their roots in the giant public accounting firms.Severalyearsago,eachof theso-called "Big Eight" U.S. CPA firms had enormous consulting divisions. They generally attempted to be all things to all clients and would undertake consulting in any channel that held the promise of growth and/or profit, including public sector operations. As they created multinational accounting conglomerates, their consultancies likewise added at least the appearance of international capability, which tended to be more promise than practice.
Today, as a result of mergers, acquisitions, and divestitures, those origins are not always obvious. Accenture spun off from Arthur Andersen, which itself disappeared, thanks to Enron. KPMG became BearingPoint. Ernst & Young, itself a merged operation, was folded into Cap Gemini to form CGE&Y, which later changed its name to Capgemini. PwC, another merger product, was acquired by IBM after an attempted purchase by HP, and disappeared as an entity. Deloitte Consulting, yet another merger/acquisition, retains its corporate identity but is legally a separate LLC entity.
The overall business model for the mega-firms is a hierarchical organization dependent on sales genera- tion by a relatively small number of rainmakers to provide billable hours for large numbers of analysts and managers. Thorough methodology and process development is supposed to allow relatively inexperi- enced consultants to tackle complex problems in consistent ways.
The model has been likened to bringing in busloads of bright kids who have been indoctrinated into the corporate culture and provided with workbooks full of process descriptions and solutions. They must then hope to come across a client who is asking the right questions. Sometimes they become confused and come to believe that the answers are more important than the questions.
(Full disclosure: Both authors are alumni of one of the mega-firms.)
The next tier
In the next tier down from the mega-firms are a handful of companies that might be described as big and important but perhaps not overwhelming in size. This category is populated by consultants that have all con- centrated on strategy but have taken differing direc- tions. Some (e.g., McKinsey) tried their hand at tactics and implementation to grow the business, but strug- gled to bridge the gap. They remain successful in oper- ational issues with strategic implications. Others, like Bain, have opted to take equity positions and manage cor- porate operations. Still others, like Boston Consulting Group, have stayed focused on strategy and related topics.
Several entities opted to concentrate on performance standards, productivity, and cost reduction. Alexander Proudfoot was a pioneer and the model for much of the productivity consulting segment. The practice survives today as a unit of Management Consulting Group PLC.
The business model for these companies is often based on the engagement of contractors, who are off the payroll as soon as their assignment is complete.
Small and midsized houses
The small and midsized consultancies tend to be built upon limited, but deep, functional experience. They come and go, and wax and wane while they are here, but some have demonstrated remarkable staying power. These players, which are too numerous to name here, can be local, nation- al, or global in coverage. They may be franchises, or they may be real companies. They may affiliate with "stringers" in several locations, handing out business cards to anyone with a suit and a laptop, or they may grow more organically. Some achieve greater functional breadth through working partnerships with other consultancies or broaden their geographic coverage with multinational alliances. They may follow the hierarchical organization model or they may be flatter partnerships, with more hands-on consult- ing involvement from senior partners.
The supply chain field has spawned quite a few of these operations, and many of them deliver cost-effective and sustainable results. Some are highly specialized, while others offer a broad range of supply chain strategy, planning, and execution services.
(More disclosure: One of the authors is a partner in a small/midsized supply chain consultancy.)
Hanging out a shingle
Next come the sole practitioners. The solos run the gamut from internationally renowned specialists to prematurely retired managers to those who set up shop after being shown the door by their previous employer. The subcategories are not mutually exclusive.
There are many excellent one-man (and one-woman) shops. For the right kind of problem, they can often offer an on-target solution at the right price. The best of them recognize their limitations and are brilliant at enlisting other specialists to work on solving the fundamental problems. The worst of them believe their own press clippings and hesitate to bring in people smarter than themselves to help deliver the right answers.
(Still more disclosure: One of the authors is a sole practitioner, and the other not only has been but will be again.)
Tales out of school
There is one other important category of consultants to consider. Many respected academics practice consulting, on either an institutional or a private basis.
Often, their consulting contains a research component directed at a technical solution to a specific, knotty problem. Sometimes, they are able to assemble teams of students to observe and assess operational problems and practices. Other times, they might conduct and analyze industry surveys.
There are times when the right approach to a problem is to build a team with academic and consulting components, to develop an effective blend of esoteric and practical solutions.
One other category deserves mention—and caution. Many service providers—3PLs, motor carriers, parcel com- panies, real estate firms, and the like—offer consulting services. It is possible for a service provider to dispense honest, independent advice. The test—often difficult to evaluate in advance—is whether the "consultant" describes, and offers up, competitive alternatives to his own service.
Editor's note: Next month, we'll look at why companies use consultants, what services they can provide, and how to find and select a consultant.
A team from the University of Tennessee, Knoxville, walked away with top honors at this year’s event. It was the school’s first time competing in the scholarship competition, which was held during IANA’s Intermodal Expo in September.
The winning squad included students Jaren Bussell, Elizabeth Shuler, Brock Sooley, and Kathryn Whittaker and was coached by Dr. Donald Maier, associate professor of practice–supply chain. “It is exciting to see what the students can achieve in five hours. Each team reads, analyzes, and prepares a presentation with no faculty input,” Maier said in a release.
In addition to UT, participating schools included the California State Maritime Academy, College of Charleston, Georgia Southern University, and SUNY Maritime as well as the universities of Arkansas, Maryland, North Florida, North Texas, and Wisconsin at Superior.
IANA’s scholarship awards support curriculums designed to attract students to careers in freight and intermodal transportation. Since the program’s inception in 2007, IANA has awarded over $5.3 million in scholarships.
Family-owned business Cibao Meat Products, a producer of Hispanic-style sausages and deli meats, has long prided itself on staying true to the traditions and values the company was founded on in 1969—like a commitment to high-quality ingredients and a family workplace atmosphere. Less of a source of pride, however, was its continuing reliance on the same, mostly manual, processes and data management techniques used at its inception.
With the company now selling its meats to retail giants such as BJ’s, Sam’s Club, and Costco as well as 500 supermarkets and restaurants across the U.S., Cibao president Heinz Vieluf Jr. knew that it was time to take the company into the digital age. “As a third-generation leader of a multigenerational company, I put an emphasis on bringing our business into the digital future and utilizing technologies that will help propel success,” he said in a statement.
IN WITH THE NEW
In Cibao’s case, that would require modernizing its data-collection practices. Because the meat producer still relied on legacy processes, its company data and customer data were siloed, scattered throughout departments from sales to manufacturing to accounting. Teams were manually gathering information and creating reports on a weekly or biweekly basis. As a result, company leaders had no real-time visibility into business-critical operations. On top of that, creating those reports ate up hours of team members’ time each week.
For help bringing all of its organizational data into one central location, Cibao turned to the Slingshot work management platform from software company Infragistics. In October 2023, the company began working with Slingshot to compile data from multiple sources into a centralized hub that would be accessible to every employee.
Today, with the new platform in place, Cibao is benefiting from enhanced data transparency across the company and from accelerated data-reporting capabilities. Employees can now create reports within minutes, eliminating the biweekly reports in favor of daily assessments and unlocking insights needed to make critical decisions 10 times faster than before—saving 120 hours a month, the company says. For example, now that it has real-time access to its customer payment data, Cibao’s accounts receivable team has been able to detect any discrepancies in real time. This has allowed the team to check in with customers as soon as they notice a potential issue, which has increased the company’s cash flow by $40,000 a week on average, or up to 65%.
STRENGTHENING THE BOTTOM LINE
With teams saving hours each week on reporting, Cibao employees can now concentrate on higher-value tasks. For instance, they have more time to connect one-on-one with clients and develop relationships, instead of getting held up on the back end. They can also focus on new marketing efforts and promotions, not only boosting customer satisfaction but also helping to grow existing customer relationships and develop new ones.
“We created Slingshot to bring together data that has traditionally been spread across departments into one completely accessible space so that companies can better drive productivity, insights, and ultimately business results,” said Dean Guida, founder of Slingshot, in the statement. “By bringing its data into a central location, Cibao Meat Products has unlocked insights that have allowed [it] to move strategically and at a faster pace, strengthening the company’s bottom line.”
As autonomous systems take on a bigger role in logistics and industrial production applications, the race is on to make the equipment smarter, more efficient, and safer. To accelerate work in this area, the German lift truck and logistics technology vendor Kion Group is partnering with a local university to support expanded studies on artificial intelligence (AI) and autonomous systems.
According to Kion, Peitz’s work will focus on the development of autonomous systems that operate intelligently and safely for all parties involved, with a particular focus on autonomous mobile robots, forklift trucks, and AI-based systems that are used in logistics and production environments.
The objective of the endowed professorship is to advance the field of research at the highest international level, Kion said in a statement. In close collaboration with research networks and other partners both within and outside TU Dortmund University, such as the Fraunhofer Institute for Material Flow and Logistics IML and the Kion Group itself, the professorship will form a “hub” for digital and intelligent logistics, the company added.
American skin-care company ET Browne—best known for its Palmer’s Cocoa Butter—has trimmed costs, boosted revenue, and increased profits thanks to a recent IT upgrade from its longtime technology partner Syspro, a global enterprise resource planning (ERP) software provider that specializes in serving manufacturing and distribution businesses. ET Browne has run on Syspro software for 25 years and racked up some of its biggest year-over-year improvements following a 2023 upgrade to the latest version of Syspro ERP—an enhancement that allowed it to leverage the platform’s material requirements and planning (MRP) capabilities to build a just-in-time inventory system.
The net result? A smoother-running supply chain.
“We’ve successfully relied on [Syspro] for more than a quarter century while both growing and aligning our business to take advantage of the [platform’s] enhancements,” Pieter Goes, ET Browne’s vice president of IT & BI (business intelligence), said in a statement describing the project. “After bringing in [Syspro] to do native demand forecasts, we were able to better evaluate key markets and key customers, enabling our forecasting and capacity planning to be much more accurate. As a result, we can achieve a fill rate of greater than 95% and are able to process our purchase orders much sooner, resulting in better supply.”
NEW CAPABILITIES, BETTER OUTCOMES
Syspro’s MRP capabilities allow companies to balance supply and demand for materials and components so they can accelerate manufacturing production. With the system upgrade, ET Browne was able to take advantage of those capabilities to gain better visibility and control over inventory and the supply chain. As the companies explain, this allowed ET Browne to predict demand, understand how filling the projected sales pipeline would affect production schedules, and anticipate the peaks in demand it would need to buffer.
Leveraging those demand forecasting and supply chain management capabilities, ET Browne created a just-in-time inventory system that has dramatically reduced the amount of raw material and product it keeps on hand—a move that is translating into increased profits: Since implementing the upgrade, ET Browne has reduced inventory by 22% and increased profits 113% on 7% revenue growth.
ET Browne’s leaders say they intend to leverage Syspro to manage emerging challenges as well. Those include meeting growing consumer, distributor, and government demands to use recycled materials in packaging, while also making sure the company first uses up the materials it already has on hand. That transition will increase complexity within the company’s bill of materials, something Syspro’s management capabilities can help it navigate.
“[Syspro] ERP provides much more than just financial management,” Brian Rainboth, CEO of Syspro Americas, said in the statement. “Our platform empowers mid-market manufacturers to create accurate demand forecasts [and] project exactly how much raw material they’ll need to order and how much product they need to make to meet demand. We’re proud to celebrate 25 years with ET Browne and look forward to enabling future growth and profitability as the company deploys additional capabilities with [our] platform.”
Keep ReadingShow less
Illustration courtesy of Clean Energy Fuels Corporation
For consumers, the car-buying process generally includes a test drive so they can see if the vehicle lives up to its hype before they plunk down any money. But the process can be a little more difficult for commercial fleet managers.
The 2025 Peterbilt 579 day cab tractor, branded in Clean Energy’s signature green, will be available for fleets to test on their normal routes for up to two weeks. And if you don’t happen to have an RNG fueling station in your own yard, that’s no problem: The fleets testing the demo truck will be able to use Clean Energy’s fueling infrastructure, which consists of over 600 stations across North America, 200 of which have public tractor-trailer access.
First in line to try the new rig—which can haul heavy loads for an 800-mile range—is transportation and logistics giant J.B. Hunt Transport Inc. After Hunt completes its trial, the truck will make its way through large and medium-sized heavy-duty trucking companies in California, Arizona, Texas, Oklahoma, Ohio, Michigan, Pennsylvania, and Florida. Clean Energy says it expects to run the X15N demo truck program at least through 2025.
“Vehicles powered by renewable natural gas produce significantly less carbon emissions throughout their lifecycle and are more compatible with today’s available infrastructure than most competing emissions-reduction technologies,” Greer Woodruff, executive vice president of safety, sustainability, and maintenance at J.B. Hunt, said in a release. “The new technology and supporting fuel network in this pilot have the potential to be a viable, cost-effective solution for customers wanting to decrease their carbon footprint in the near term.”