Are supply chain consulting firms overcomplicating processes?

Imagine waiting weeks for a product you ordered online, only to find out it’s been delayed due to shipping bottlenecks. This common frustration highlights the critical role of supply chain management in our daily lives. Behind the scenes, supply chains keep businesses running and ensure that goods reach consumers efficiently. With 90% of the world’s merchandise shipped by sea, the stakes are high—especially as rising shipping costs contribute to global inflation, affecting everyone from small businesses to individual shoppers.

The impact of a well-managed supply chain is undeniable. Companies with high-performing supply chains are 79% more likely to achieve revenue growth above their industry average. Additionally, businesses that optimise their supply chains experience 15% lower costs, hold less than half the inventory of their peers, and achieve cash-to-cash cycles three times faster. These benefits don’t just boost profits; they help deliver better products and services to customers.

Supply chain consulting firms play a crucial role in unlocking these advantages. By offering expert insights and strategies, they help businesses streamline operations, cut costs, and improve efficiency. But here’s the question: Are these consulting firms sometimes overcomplicating processes in their pursuit of optimisation?

What is the role of supply chain consulting firms?

Supply chain consulting firms are crucial in helping businesses optimise their supply chain processes, drive efficiencies and cost reductions, and manage risk. They offer expert advice and solutions to help organisations improve their supply chain performance and achieve a competitive edge in the market.

Traditional benefits: What supply chain consultants aim to achieve

Supply chain consultants aim to address several core areas to enhance business performance, including:

• Optimisation: Consultants help businesses streamline their operations, reducing inefficiencies and bottlenecks in the supply chain. This leads to better resource utilisation, reduced lead times, and improved delivery performance.
• Cost reduction: By identifying cost-saving opportunities, consultants help businesses minimise expenses related to procurement, transportation, warehousing, and production. This results in better margins and more competitive pricing.
• Risk management: Supply chain consultants work to identify potential risks, such as disruptions, geopolitical issues, or market fluctuations, and develop strategies to mitigate them. By building more resilient supply chains, businesses can minimise the impact of unforeseen events.

Common strategies: Approaches used by supply chain consulting firms

To achieve these benefits, supply chain consultants typically employ a range of strategies, including:

• Technology integration: The use of advanced technologies, such as AI, Internet of Things (IoT), and blockchain, to enhance visibility, traceability, and decision-making within the supply chain. Automation tools can streamline processes, while cloud-based systems provide real-time data insights.
• Data analysis: Consultants use big data analytics to uncover patterns, trends, and inefficiencies in the supply chain. By leveraging data-driven insights, they help businesses make informed decisions, optimise inventory levels, and forecast demand more accurately.
• Lean management: Lean principles focus on eliminating waste, improving processes, and maximising value. Consultants often introduce Lean methodologies, such as just-in-time inventory, total quality management, and continuous improvement, to enhance supply chain efficiency.
• Sustainability initiatives: Consultants increasingly help businesses incorporate sustainable practices into their supply chains. This includes reducing waste, adopting eco-friendly packaging, and ensuring ethical sourcing practices, which can improve brand image and reduce environmental impact.

Supply chain consulting firms play a vital role in helping companies unlock their supply chain potential, enabling them to gain a competitive edge through optimisation, cost reduction, and risk management strategies. 

Through the integration of advanced technologies, data analytics, and lean management principles, consultants help businesses build more resilient, efficient, and sustainable supply chains.

The complexity issue in supply chain consulting

While supply chain consulting firms can provide substantial benefits, they can also introduce complexities that may hinder operations if not managed effectively. Businesses must be aware of potential challenges to ensure the recommendations align with their unique needs and capabilities.

Supply chain operations face a variety of obstacles, including:

• Hiring and retainment: 57% of firms report finding and keeping skilled supply chain professionals is a significant challenge. High turnover rates can lead to knowledge gaps and inefficiencies.
• Talent shortages: 56% of firms face a lack of qualified professionals in the field, which exacerbates operational challenges and slows the adoption of new strategies or technologies.
• Disruptions: 54% of firms experience vulnerabilities in global supply chains due to geopolitical issues, natural disasters, or pandemics.
• Running out of stock: 52% of firms struggle with poor inventory management and demand forecasting, leading to stockouts that negatively impact customer satisfaction and revenue.
• Consumer demands: 52% of firms face increasing pressure from consumers who expect faster delivery times, personalised experiences, and sustainable practices.

Increased layers of process

Consultants may inadvertently add complexity to supply chain operations by introducing additional layers of processes:

• Sophisticated technologies: Implementing advanced tools such as AI-driven analytics, blockchain, or IoT devices can require significant training and infrastructure upgrades. Without proper planning, these technologies might slow down operations rather than enhance them.
• New frameworks: Adopting frameworks like Lean Six Sigma or Total Quality Management often involves restructuring existing processes, which can be time-intensive and disruptive in the short term.

Resistance to change

Even when new processes and tools are introduced to improve efficiency, resistance to change can hinder adoption:

• Employee challenges: Employees may struggle to adapt to new systems, leading to frustration and a lack of engagement. This resistance can delay implementation and reduce the expected benefits.
• Training gaps: Inadequate training can exacerbate resistance, as employees may not fully understand the new systems or their benefits.

Misalignment with business needs

A one-size-fits-all approach by consultants can lead to poor results if the proposed solutions do not align with the organisation’s specific requirements:

Standard solutions: Consultants may recommend strategies that have worked for other companies but fail to account for unique industry, market, or organisational conditions.

Operational disconnect: Over-reliance on theoretical models or generic frameworks can create a gap between proposed solutions and practical applications, leading to inefficiencies.

Mitigating complexity

To ensure successful collaboration with consultants and mitigate complexity:

• Customised solutions: Businesses should insist on tailored recommendations that align with their operational realities and goals.
• Clear communication: Open lines of communication between consultants and internal teams can help align expectations and address potential challenges early.
• Incremental implementation: Rolling out changes in phases can minimise disruption and allow employees to adjust gradually.
• Comprehensive training: Providing thorough training on new processes and tools is essential to ensure a smooth transition.
• Feedback loops: Regular feedback sessions during and after implementation can help identify and address issues promptly.

Why complexity might be necessary in supply chain operations

Supply chains are under immense pressure to deliver more than just goods—they must drive efficiency, mitigate risks, and adapt to ever-evolving consumer demands. While simplicity is often valued in operations, the reality is that achieving these goals frequently requires embracing a level of complexity. From implementing cutting-edge technologies like AI and blockchain to managing diverse supplier networks across the globe, modern supply chains are becoming more intricate. But is this complexity a necessary burden—or a strategic advantage?  

Only 6% of businesses have achieved full supply chain visibility, which underscores the need for more sophisticated strategies and tools to gain better insights and control over operations.

Customisation for competitive advantage

Complex strategies, such as highly tailored supply chain solutions, can help businesses differentiate themselves in competitive markets. By leveraging customisation, companies can meet unique customer demands, optimise resource allocation, and improve operational resilience, giving them a significant edge over competitors.

Emerging trends

The adoption of advanced systems, such as AI, blockchain, and the Internet of Things (IoT), requires a higher degree of complexity but delivers substantial long-term benefits. These technologies enable real-time tracking, predictive analytics, and automated decision-making, which improve efficiency and adaptability in dynamic markets.

Risk mitigation

In volatile markets, additional layers of complexity may be necessary to mitigate risks such as geopolitical disruptions, natural disasters, or sudden demand fluctuations.

For example, 50% of companies were expected to adopt more balanced multi-shoring sourcing strategies in 2024. This approach involves diversifying suppliers across regions to reduce reliance on single sources, enhancing supply chain resilience.

Balancing complexity and efficiency

While complexity is sometimes unavoidable, the key is to ensure that it serves a clear purpose. Businesses must weigh the benefits against the challenges, prioritising areas where complexity can drive the most significant impact.

By embracing complexity where necessary—such as through advanced systems, customised strategies, and risk mitigation efforts—businesses can build supply chains that are efficient, resilient and competitive in an ever-changing global landscape.

Striking the right balance

Navigating the trade-off between simplicity and complexity is a critical challenge for modern supply chain operations. While innovation often demands intricate solutions, maintaining simplicity is essential for efficiency and practicality. Striking the right balance ensures that businesses reap the benefits of innovation without becoming overwhelmed by unnecessary complications.

Simplicity vs. innovation

• The need for innovation drives businesses to adopt advanced technologies and frameworks, but overly complex systems can hinder agility and create operational bottlenecks.
• Effective supply chain strategies balance straightforward, efficient processes with cutting-edge innovations to ensure long-term sustainability without compromising day-to-day operations.

Pragmatic consulting

• The most effective consulting firms focus on simplifying complexity. Rather than introducing unnecessarily intricate frameworks, they distil solutions to their most impactful elements.
• Pragmatic consultants guide businesses through change management, ensuring new systems and processes are accessible, actionable, and easily adopted by employees.

The value of tailored solutions

• No two supply chains are alike, and cookie-cutter solutions rarely address the unique challenges businesses face. Tailored solutions allow companies to align strategies with their specific needs, organisational culture, and industry context.
• By customising approaches, businesses can address complexities without introducing inefficiencies, enabling them to innovate while maintaining a focus on operational simplicity.

Balancing simplicity and innovation is not about choosing one over the other—it’s about integrating the best of both. With pragmatic consulting and tailored strategies, businesses can harness the power of innovation while ensuring their supply chains remain efficient, adaptable, and easy to manage.

Why procurement consulting is the solution? 

Procurement consulting is an often-overlooked yet critical component of supply chain optimisation. By focusing on sourcing, vendor management, and cost efficiency, procurement consultants can streamline supply chain operations while delivering measurable value.

Supply chain consulting firms focus on sourcing strategies, helping businesses identify and secure the best suppliers for their needs, often at competitive costs. They enhance vendor management, ensuring reliable supplier relationships, consistent quality, and on-time delivery. By targeting inefficiencies in procurement processes, consultants can eliminate redundancies and ensure that procurement activities align with broader supply chain goals.

Simplifying the supply chain

A key advantage of procurement consulting is its ability to cut through unnecessary complexity. Consultants zero in on core priorities, such as cost savings, supplier relationships, and operational efficiency. By standardising procurement workflows and leveraging data-driven insights, they create clarity in processes often bogged down by unnecessary bureaucracy.

End-to-end value

Procurement consulting complements supply chain consulting by offering a focused, results-driven approach that avoids overcomplicating operations. While supply chain consulting addresses broader operational challenges, procurement consulting hones in on optimising the sourcing aspect, creating a synergy that benefits the entire value chain. Together, these two disciplines deliver end-to-end value, ensuring that sourcing decisions enhance supply chain performance and drive business growth.

Procurement consulting is a game changer for businesses looking to simplify and optimise their supply chains. By focusing on strategic sourcing, efficient vendor management, and targeted cost reductions, procurement consultants deliver impactful results while maintaining the balance between simplicity and effectiveness.

Simplify your procurement processes with Kronos Group 

At Kronos Group, we understand that streamlined procurement processes are key to a more efficient and cost-effective supply chain. Procurement consulting helps optimise sourcing, improve vendor management, and drive cost savings without adding unnecessary complexity. 

With a tailored approach to your unique needs, we empower your business to build stronger supplier relationships, enhance procurement efficiency, and boost overall operational performance. Trust Kronos Group to simplify and optimise your procurement processes for long-term success.