Supply chain management (SCM) as an effective tool in operational business consulting

Abstract

Management consulting in general deals with assisting clients in developing operations strategies and improving production processes. In strategy development, the focus is on analyzing the capabilities of operations in light of the firm's competitive strategy. Market leadership can be attained in one of three ways, through: (1) product leadership; (2) operational excellence; or (3) customer intimacy. Each of these strategies may well call for different operations capabilities and focus. The operations consultant must be able to assist management in understanding these differences and be able to define the most effective combination of technology and systems to execute the strategy. In process improvement, the focus is on employing analytical tools and methods to help operating managers enhance performance of their departments. One of these effective tools is for example the Supply Chain Management (SCM) process. However, in the Retail and Consumer Products (RCP) industry, it is critical to have an efficient and effective supply chain. Presenting opportunities and risks, the supply chain is one of the last, best areas from which to reduce costs in a company's operations. Beyond that, flexible supply chains enable greater connectivity and collaboration between business partners. Done right, this can improve operational effectiveness, customer service and, ultimately, profitability. But with greater connectivity comes greater risks. Data and application security are obvious risks, as is the risk of maintaining the availability, accuracy, and integrity of the data that is transferred between partners. Ensuring continuity in the event of business disruptions is another major risk area. Companies also take on financial risk when they invest in supply chain management tools and technologies, and they assume tax risk when they choose where and how to manufacture, distribute, and transport goods.