Global Logistics and Supply Chain Strategies - June 2008 - (Page 39) weekly basis, Shecterle says. They compare actual results against project milestones and recommend needed changes. No less than once a month, a larger team meets with sponsors and other key individuals to chart progress and anticipate the next set of milestones. Shecterle recommends that the parties build a pilot implementation into the project. The technique makes possible the measurement of results on a limited scale, prior to company-wide application of new technology or process change. “The pilot allows you to set expectations about the total size of the benefit,” he says. Take the Money and Run Horror story #5: Clifford F. Lynch, principal of C.F. Lynch & Associates, tells the tale of a large consulting company that was hired to reduce the client’s transportation costs. It made a number of recommendations that were aimed at saving the client between $10m and $12m a year. In a typical gainsharing arrangement, the consultant would be paid a percentage of the savings. There was only one glitch: the client paid its bill before the savings were realized. Then, when a financial expert looked into the situation, he found that the company’s freight costs had actually risen. Why that happened was unclear—it could have been the result of changes in product mix or customer requests for specific types of transportation—but the matter ended up in arbitration. “Looking back at the consulting project,” says Lynch, “they should have set up a process to measure their recommendations Both sides were guilty.” As the head of a small consultancy, Lynch picks and chooses his engagements with care. Rather than sending out a rash of requests for proposal to companies gleaned from a directory, he prefers to win business through networking. Following an initial phone conversation, the prospective client should invite the consultant to spend a day or so on site, discussing the problem. At the end of that time, Lynch says, “you’re going to be able to tell whether there’s a good fit.” Then the consultant can respond with a formal proposal. Even the most promising engagements can founder on the rocks of corporate pol- itics. In-house staff might resent the presence of an outside consultant, complaining that they don’t have the time to meet and answer endless questions, or feeling that their own expertise has been called into question. The situation gets even dicier when layoffs are a possibility. At such times, the consultant represents a real threat to workers. “You have to make sure when the word comes down that people understand they are part of the process,” says Lynch. Regardless of how smoothly an engagement goes, most recommendations never get implemented, Lynch says. He used to work for a company that underwent annual business-process reviews by mega-consultant McKinsey & Co. Few of the ideas that arose from those exercises were ever put into place. “There’s only so much a consultant can do,” says Lynch, particularly if the client’s internal sponsor moves on to another job and the successor wants no part of the project. Lynch was part of a recent engagement in which the client stood to save millions of dollars. Then the sponsor took off. “They swissworldcargo.com Maximum protection: Swiss Argus. We keep more than one eye on your cargo. Our specially trained staff guarantee that your mobile phones, CDs, software, high-value pharmaceutical products or other high-theft-risk goods are under constant surveillance. Everything is stored and shipped absolutely securely. Worldwide. We care for your cargo. GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 39 http://swissworldcargo.com http://swissworldcargo.com
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