The Last Mile: Acting on Bad Advice

"Most consulting is bought to support a decision that has already been made." The consultant who said that then explained the dangers of navigating the corporate political jungle to determine what decision the consultant is there to support. So, if you sue your consultant over bad advice, isn't that an indictment of your company's leadership?

Nearly a decade after retaining PricewaterhouseCoopers (PwC, www.pwc.com) to advise it on a strategic review of its Courage subsidiary's supply chain, Scottish & Newcastle (Edinburgh, www.scottishnewcastle.com) has taken the matter before the High Court in London, alleging deficiencies in the consulting work that led to cost increases, not the millions in savings PwC suggested.

As might be expected of litigants, the parties are mum, preferring to save their arguments for the courtroom. While the lawyers do battle and possibly establish a precedent for future supply chain cases, there are lessons that emerge from the events that led Britain's top brewer to litigation.

Time and again, we hear that strategic undertakings must have a clearly stated goal in mind or they won't work. Improving efficiency, reducing inventory and raising customer service levels are some frequently cited goals. Note that cost cutting per se is not among these, though it is a consequence or outcome of any or all three. With top management support for a review of logistics and supply chain operations to effect changes that improve in all of these areas, it's time to start getting tactical.

What are present customer service levels, and what does the market require that would establish an attainable goal? How much improvement is needed, how will it be measured? What benefit will it yield? How do the customer requirements translate into action? Are customers looking for firm delivery appointments, plus or minus 15 minutes? Or is it sufficient to meet a morning delivery or afternoon delivery criterion? What will it take to accomplish this, and at what cost? Does the improved service help you achieve greater market share, higher margins or better customer retention? In other words, how will you measure success?

What is necessary in inventory reduction, and will it adversely affect customer service? How will you measure and then improve operations efficiency, and will the tactical steps prescribed adversely affect inventory levels or customer service?

If you already know what you want to do, don't waste money on a consultant. If the goal is "outsource" or close facilities, that's not a strategic goal and you don't need to hire a consultant who will spend half his or her time confirming the barely hidden agenda and restating it.

Your best supply chain consultants can be gathered in one room for the cost of a working lunch. Bring together all of the functional leaders in your organization, add some suppliers, vendors and customers from your supply chain, and start a dialogue. Collect action items, prioritize and assign them. Re-convene regularly to check progress and realign goals and priorities.

If you need a consultant for specific solutions or to mediate the process, fine, but don't put all your stock in a single consultant's report or a plan you can't implement. It's your company. It's your process. And you own the result. Do it right. Then celebrate—perhaps with a pint of Newcastle Brown Ale.

Perry A. Trunick,
executive editor, [email protected]

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