Strengthening your supply chain one link at a time.
Deciding whether to use a consultant or bring supply chain network design in-house depends on several factors. This discussion often arises after the successful completion of a project, during which the client recognizes the significant value of supply chain network design, or when the client has identified this capability as a key priority but is uncertain about whether bringing it in-house is the most appropriate strategy.
The Case for using a consultant for a supply chain network design
Below are a list of reasons why a company would use a consultant to perform a network design project—or continuous network design projects.
Lack of internal expertise – If your team lacks experience in supply chain optimization projects, bringing in a consultant who specializes in this type of work can bridge this knowledge gap. Consultants offer specialized skills and insights that may be difficult to develop internally, especially if your team lacks the necessary expertise in supply chain management or optimization techniques.
A one-time or short-term optimization project – For organizations with a time-sensitive or project-specific need, hiring a consultant can be the most efficient solution. Consultants provide expertise without requiring long-term investments in training or software management.
Faster project results needed – Consultants come with extensive experience using network optimization software and managing supply chain projects. Their familiarity with the tools and processes enables quicker results compared to an internal team that may need additional time to build expertise.
You lack the resources to manage the software in-house – If your organization lacks the internal infrastructure or resources to manage optimization software, a consultant can handle the entire project. From data gathering to model building to presentation of results, this approach ensures the solution is determined efficiently without overwhelming your team.
Objective, Unbiased Perspective – External consultants provide an impartial analysis of the company’s supply chain, free from internal biases or constraints. This objectivity can lead to more effective, data-driven results with proposed solutions based purely on data and best practices rather than internal pressures or preconceived notions.
Testing the waters – If you’re unsure whether purchasing network optimization software is the right fit for your organization or how it will impact your supply chain, hiring a consultant to run a pilot project can be a great way to test the waters. This approach allows you to evaluate the software’s potential benefits and make an informed decision about whether to proceed with a full-scale implementation.
The Case for bringing supply chain network design capability in house
The alternative is to develop the network design capability in-house. However, this approach requires careful consideration. The key is to plan effectively to avoid significant investments in software and time without a well-implemented process. Below are reasons why a company might choose to build this capability internally rather than rely on consultants.
Your team has the necessary expertise – If your team possesses strong capabilities in data analytics, supply chain management, and optimization techniques, they can effectively leverage network optimization software and use it effectively. Expertise in transportation, warehousing, inventory management, and operations research is crucial for maximizing the software’s potential.
Long-term, ongoing optimization is needed – For companies that need continuous, long-term improvements to their supply chain network, developing in-house capabilities can be more cost-effective. This approach enables continuous improvements without relying on external consultants, enhancing flexibility and control.
You require high levels of customization – Organizations requiring software integration with ERP, TMS, WMS, or other systems may benefit from an in-house approach. This ensures customization to meet unique business needs and operational workflows, leading to more cohesive and efficient supply chain management.
You have the budget for the software and long-term training – Implementing network optimization software internally requires a significant upfront investment in licensing, training, and potentially hiring specialized talent. If your organization has the financial resources, an in-house approach can provide long-term advantages by fostering a sustainable, self-sufficient supply chain management system.
In some cases, a hybrid approach can be highly effective
For some companies, a hybrid strategy offers the best of both worlds. Organizations can leverage consultants for specific tasks while maintaining in-house capabilities for ongoing responsibilities.
Consultants for initial setup and training — You can bring in consultants to handle the initial setup of the Optimization software and provide training to your internal team. Once the system is up and running, your in-house team can take over the ongoing management and optimization.
Leveraging consultants for specialized tasks — Consultants can also be utilized for specialized tasks, such as running complex models, setting up specific constraints or scenarios, or offering expert insights on challenging problems. Meanwhile, your internal team can continue managing their core responsibilities, gaining hands-on experience with the models, assist in adjusting the models, and leveraging the results as needed. This approach allows you to balance external expertise with the benefits of in-house control.
Conclusion
In-house is ideal if you have the expertise, infrastructure, and long-term needs to continuously optimize your network. However, consultants are a better option if you’re looking for expertise, quick implementation, or have a one-off optimization project.
By carefully assessing your company’s needs, you can determine the best approach for implementing supply chain network optimization software and achieving long-term supply chain success.
—Tom Schaefges, St. Onge Company
