Expert Insight: Sorting it Out
By Cliff Holste
Date: Oct. 23, 2008

Logistics Perspective: In Tough Economic Times Does it Make Sense to Hire a Material Handling Consultant?

Right Choice Can Make or Break a Project or a Career; Make the Selection Wisely

When the economy turns sour, Warehousing and Distribution executives often look to material handling consultants to help boost productivity and efficiency.  If you’re thinking about taking advantage of professional help, Distribution Digest offers the following advice on choosing the right consultant, avoiding some common pitfalls, and achieving your goals.

Be Sure that you are Ready to Hire a Consultant

At the right time and for the right reasons, a consultant’s contributions are invaluable.  But too often consultants are brought in at the wrong time for the wrong reasons.  By considering the following three basic questions you can determine if you’re ready.

  • Do you know where you’re business is headed?  It’s OK to bring consultants in to help figure out where you need to go relative to operational improvements.  It’s not OK to have them take you there before you have figured out just where “there” is.
  • Should your own staff be doing the job?  Consultants often get asked to do things clients are perfectly capable of doing on their own.  It makes no sense to hire a consultant to advise on potential improvements that in-house personnel have already uncovered.  They’ve done their homework (often working on their own initiative), pinpointed the issues, identified solutions, calculated cost and benefits, and mapped out implementation issues.  But for whatever reasons management has ignored them.
  • Did consultants fail on the last several projects you brought them in on?  Consultants will only be as good as your organization will allow them to be.  If it just never seems to quite work out with consultants, it might be that the root causes are a little closer to home.  Best to try and figure those out and make necessary changes before taking the plunge again.


Moving Forward

While some companies automatically turn to consultants with whom they’ve had success in the past, others go through a formal evaluation and selection process.

There is a plethora of material handling consultants to choose from, but their capabilities, scope, and experiences vary widely.  They include former warehousing and distribution operations executives and academics, industrial engineers and MH industry experts, and system integrators whose operations range from one-man shops to very large firms with hundreds of employees, and everything in between.

Sole practitioners and large firms both have value.  The best type of consultant to use depends on the scope of the particular project.  If you’re trying to put in place an integrate network of highly automated DCs, you’re probably better off going with a large firm that has the necessary models, experience, and resources.  Many small to medium size organizations don’t have the time or technology resources required to do logistics engineering, network analysis, and all the number crunching that goes into modeling.

On the other hand, if you want somebody to quickly survey your existing operation looking for productivity, throughput, and/or efficiency improvements, or travel around the country and in a few weeks time analyze and evaluate several distribution complexes, your best bet may be a sole practitioner or small firm.  There aren’t many large firms that can be that flexible and react as quickly.  In addition, a one-man show can be much more efficient and cost-effective especially in specialized fields like WMS, order fulfillment, cross docking, and automated sortation.  On the downside, when working with a sole practitioner, you may not get the objectivity and diversity of thought and input that you can get from a large firm.

Be Specific About Goals

When evaluating potential consultants, be very specific about your goals and objectives, then find out what they have done for similar companies, and what results they’ve gotten.  Beware of consultants who tell you they can deliver the work you want done, then don’t really have the capability of doing so.

When you interview consultants face to face, pay close attention to what they say.  Is it clear that they have learned about your business and products – analyzed your web site, learned about your customers and competition, spoken with experts in your industry/market place, and visited places where you sell your products?  If they have, you know they are prepared, and are actively interested in understanding your business model and its associated challenges.

Also, it’s equally important to pay attention to how well the consultants listen to what you say.  For sure they will want to impress you with how clever they are, but they should listen carefully to your explanations of your problems before giving you the benefit of their wisdom.

Note: Given the impact a consultant can make on your business (not to mention your career) you must dig much deeper than reviewing their sale brochures and bound proposal to get a true picture of a potential consultant’s character and capabilities.


Set Expectations and Avoid Scope Creep

It’s crucial to clearly set expectations from the get-go.  Clarity and narrowing the scope down from the beginning are absolutely necessary.  Even so, it’s almost guaranteed that, unless you make a concerted effort not to let it, the scope of the project will creep.  The bad news; a few years ago, I saw a project that was well defined and suppose to take only a few weeks to complete expand into a two year engagement.  The good news; the end result was, never-the-less a successful project.

If you still have reasons to be concerned, you might want to consider negotiating a not-to-exceed or fixed price agreement.  While this approach will ensure that you stay within the approved budget, the downside is that if all goes well, in the end it may cost you more that a pay-as-you-go agreement.

Secrets of Success

For greatest success when working with Logistics and Material Handling Consultants, review the follow guidelines extracted from Logistics Resources International, Inc.:

  • Insist on solid, experienced, and well-qualified consultants: Get a high degree of commitment from the consulting firm on the level of consultants to be used in the project.  Otherwise a senior partner can come in and sell the deal, then you get MBAs fresh out of school who barely know what a forklift is. Once you know who you will work with, make sure there’s good chemistry between the consultants and your team.  Look for individuals who fill in any gaps that your team may have.
  • Don’t look for a clone of yourself: Look for consultants that think differently than you do.  Try to find consultants who will bring up potential solution that you would not normally consider and by doing so contribute to a much stronger result.
  • Establish an open atmosphere: To successfully work with consultants, establish a strong relationship and set an environment and tone where not only are you free to challenge, but where you are expected to challenge each other.  There has to be a real open environment of sharing and feeling that you’re in this together.
  • Keep the executive staff informed: It’s critical that information flow back and forth between the planning team and the executives.  This will help to promote ownership and buy-in and greatly reduce the chances of getting off track and consequently presenting a project that they will not support.
Finally, You Must Set the Ground Rules

In its booklet “Your Secret Weapon”, Deloitte Consulting suggest making this speech to your new consultant on Day One (just prior to signing the agreement):

  • I want ultimate candor.  This means that we are on the same team.  We will act that way and share information.  There is no problem you can bring to me that will get you fired.If we have a problem, and you believe that I am the source of that problem, you will and must tell me.  Not my team.  Not my boss.  Me.
  • In the event that we have a problem and you go over my head without bringing it to my attention and telling me that you feel I am not responding, I will fire you.  Period.

Agree or disgree with our expert's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld

Send an Email
profile About the Author
Cliff Holste is Supply Chain Digest's Materials Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.
Visit SCDigest's New Distribution Digest web page for the best in distribution management and materials handling news and insight

Holste Says:

If you still have reasons to be concerned, you might want to consider negotiating a not-to-exceed or fixed price agreement.  While this approach will ensure that you stay within the approved budget, the downside is that if all goes well, in the end it may cost you more that a pay-as-you-go agreement. 

What Do You Say?
Click Here to Send Us Your Comments
profile Related Blogs
Sorting It Out: Shippers Looking To Increase System Capacity Are Surprised To Find It May Already Exist!

Sorting It Out: For Shippers - Benefits Of Real-Time Control In The DC Are Huge!

Sorting It Out: Shippers Looking to Improve Operations Choose Customer Centric Approach

Sorting It Out: Productivity is a Crucial Factor in Measuring Production Performance

Sorting It Out: Packaging Construction Impacts on Logistics Operations

Sorting It Out: System Providers Offering More Modular & Scalable Solutions

Sorting It Out: Business Metrics Drive Technology Adoption

Sorting It Out: Supervising in the DC - Timeless Leadership Skills and Tools First-Line Supervisors Need to be Successful

Sorting It Out: Good Business Security is All About Paying Attention to Details

Sorting It Out: Is Automation Right for Your Business

<< Previous | Next >>

See all posts