basictraining
we’re consultants,
and we’ve come to help …
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. Several years ago, each of the so-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 generation 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 inexperienced 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 concentrated on strategy but have taken differing directions. Some (e.g., McKinsey) tried their hand at tactics
and implementation to grow the business, but struggled to bridge the gap. They remain successful in operational issues with strategic implications. Others, like
