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Route to Market & Supply Chain Blog

Supply chain services; Big Firm vs Small Niche experts?

Posted by Michael Thompson on Mon, Mar 14, 2011

In the 1970s when organisations bought PCs it used to be said that "you never got fired for buying IBM".

Selecting supply chaon consultancyI wonder if the same attitude to risk is still true in 2011 when organisations buy supply chain consultancy services?

Here are two recent examples of projects for which Enchange has bid:

A multinational pharmaceutical client wanted to improve its demand planning and S&OP processes.  It was a competitive bid between Enchange and one of the ‘Big Consultancy Firms’.  Enchange was chosen because we were able to demonstrate a successful track record on similar projects and we were “far better value for money”.

Another multinational company wanted to implement a new regional supply chain organisation.  Enchange were invited to bid with two other ‘Big Consultancy Firms’, one of whom won the bid.  We were told that the decision was based upon a degree of “comfort” that the winning firm was able to offer, despite the fact that Enchange had the technical competency and were more competitively priced.  Unofficially the winning bid was perceived as being a “lower risk option”.

Of course we are very pleased to have been chosen to work on the first project.  However, we are convinced that in the second example the higher risk option has been chosen by the client.

Talking to fellow supply chain consultancy professionals, the view is that it can be difficult for smaller specialist firms to compete with the “Big Names”. 

Furthermore, there is a common consent with fellow professionals that far from being a low risk option, hiring one of the ‘Big Names’ can add considerably to project risk, especially if the firm beings to dominate the client project.

So in answer to my own question? 

Yes.  Decisions on hiring supply chain (or other consultancy services) is still part driven by a perception of relatively low risk in hiring a ‘Big Name’.

This is a theme that I will return to in the coming weeks. 

In the meantime, I welcome any comments.


Image credit: HikingArtist.com

Tags: Interim Management, CEO, Performance Improvement, Michael Thompson

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