May 19, 2008
Supply Chain Digest: The Difference Between Hard and Soft Expertise in Global Sourcing Consultants
By SCDigest Editorial Staff
Through a special arrangement, what follows is an excerpt of a current article from Supply Chain Digest, presented here for discussion.
The explosion in globalization has, in general, exceeded the ability of most companies to keep pace with the people and the skills required to execute global sourcing strategies.
As a result, there is robust interest in outside help from consultants in both the design and execution of global sourcing strategies.
However, one supply chain executive recently told SCDigest that there is a wide range of consulting talent available — and it’s important to find the right match for your needs.
More specifically, the executive (who asked that he not be named for this article) said if you are fairly well down the path, you are more likely to need and want "hard" consulting — real expertise — than "soft" consulting that deals more in general practices.
"What I don’t want right now are people with process maps, "best practices," sermons on collaboration, book checklists, etc.," he said, referring to the softer variety of consulting skills in global sourcing.
So, what constitutes hard consulting? According to this executive, that would include the following types of capabilities:
- Knowledge of how to identify, qualify suppliers
- Commodity prices and trends, worldwide and different geographies
- Contracting globally (and best practices in contracts)
- How to assess risks and mitigation strategies
- Upside/downside management for global sourcing initiatives
- Government regulations and laws in different geographies
- Local content and "green" laws and compliance
- Various compliance regulations
- Knowledge of specific countries in question and their infrastructure issues, and these in comparison with others
- A really good ability to evaluate the true total landed cost of different sourcing alternatives
- Advantages and disadvantages of different geographies
- Industry sourcing trends (capacity investment, who is sourcing where, etc.)
- INCOTERMS – best for different supply sources
- Physical network designs – for cost, risk and market speed
"Now, granted, one person will not have all of this," the exec added. "But a good consulting practices leader would know what to get and then build the group around this."
SCDigest thinks the list above is a fine place to start in terms of evaluating potential global sourcing consultants.
Discussion Questions: What do you see as the difference between "soft" and "hard" consulting? When should a company use one type of a consultant over the other, especially around sourcing solutions?
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“Hard consulting” = “real expertise.” Hmmmm. Let’s see, which is “harder: “finding out what the published regulations in some country are (apparently hard consulting) or getting a whole bunch of control freaks with territorial ambitions and conflicting strategies to put the needs of the customer and company first and actually align their energies in a profitable way (apparently soft consulting).
There is “economy” (space, money, systems, products, numbers) and there is “ecology” (spirit, vision, alignment, collaboration, service). Economy without the ecology may make more money in the short term but it will suck the soul out of you. Ecology without good economy will bankrupt you but you’ll have close and caring friends in the unemployment line. Of course you need both! But in my experience, the most challenging by far is getting the ecology right. Some call it “culture” and these days that is pretty well all that separates one competitor from another.
When I hear executives protest that they don’t want the “soft stuff…” they probably need the soft stuff. We need to remember that just as there are lousy “hard consultants” there are lousy “soft consultants.” The trick is to find the “real experts” in both categories!
Blue chip consulting firms are still recruiting fresh graduates and paying them well. Their clients are paying for a combination of brains and experience. The fresh grads aren’t directing the consulting, they’re doing research and serving apprenticeships. Their time isn’t billed out at the top partner rate, so using them helps save clients money. Certainly, systems and procedures are critical, as well as very specific guidance.
Great consulting has great return on investment, and no consulting firm lasts long if they can’t produce referenceable work. Furthermore, the most successful consulting firms are brought back by the same clients for additional work, for good reason. Consultants who merely produce platitudes have rarely been successful for very long, regardless of the economy or the era.
Susan Rider hits the nail right on the head in her response. My clients approach me (or vice versa in some cases) and say “how can we increase the bottom line?” We work with low margins and increasing labour charges in retail, so it’s important that any project have an ROI when speaking of resultants. This is where hard expertise comes into play. The Tony Robbins life coach role is fading away. How can I make more money or increase the basket is what executives are asking now. Those of us with extensive field experience in retail can come up with what the problems are and devise solutions that do bring in more revenue. That is what I consider hard expertise!
Excellent question posed here and one that galvanized me to write a book not too long ago (“The Quintessential Guide To Using Consultants”)to address this issue and many others like it. My answer may be controversial and is designed to be compelling and generate discussion (so be forewarned)….
There are many variables interwoven into the question and the executives suggestions, so I will only address a couple here.
This executive is not seeking a consultant at all (soft, hard, or scrambled). This executive is looking for a vendor or supplier of services and any consultant that accepts the assignment is BOUND TO FAIL. Without doing a proper assessment of the organization, the opportunity, the marketplace, etc.–any suggestions or counsel is akin to playing the children’s game of “Pin The Tail On The Donkey” (where a child is blindfolded, occasionally spun around to disorient him or herself, and then asked to place a “tail” on a depiction of a donkey without a tail).
Would any skilled medical practitioner accept a patient’s view of his or her medical condition without running some tests, examining, or otherwise confirming conditions? Does an Accountant sign off on a tax return without having reviewed financial performance?
Now, to be sure, there are differences in consulting techniques, expertise, experiences, etc. And not every consultant is a match for every consulting assignment. The default however on BOTH sides of the equation is to seek a “tactic” or an action (sometimes referred to as a “deliverable”) and check the box on the to-do list and then move on. However, the problems that prevented the company from succeeding on their own without the help of the consultant remain and will torpedo the success of the project if less unchecked.
Quite simply, I would ask this executive “why do you think this is what you need?” “How did you assess ‘x’ and ‘y’?” “Why have you been unable to resolve this on your own?” “What will the consultant provide that is unavailable in-house?” “How will success be measured” (both of the project and of the consultant’s efforts)? And so on and so on.
For a project such as this one to succeed, BOTH hard and soft skills will need to be addressed. To only purchase the “hard” is to ignore the company’s cultural implications and treat the assignment as if it were a commodity purchase. To only purchase “soft” is to energize and prepare an organization to change–without recognizing how to apply the skills, where to do it, when to do it, etc.
This is a great topic and one that deserves more discussion between and among clients and practitioners. I intended to startle a few people with my answers and hope that my “thumb in the eye” is taken as intended–as a conversation generator.
Whether you call it soft or hard consulting, it boils down to the current trend that companies are looking for consultants that add bottom line value. The day of hiring a big five consulting firm that brings 20 fresh “consultants” right out of college and they learn on your project is over. Companies are looking at the bottom line results–consultants that will immediately add value through specific expertise on needed subjects.
If a company is looking at building/creating or developing a supply chain function or area, soft consulting works with process charts, benchmarks, etc. When a company has a specific goal, they need a firm with experience on that specific goal or the company pays for the learning experience. Always check credentials and experience of the consultant on the specific project that you are desiring. If there is no experience, look some more!
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“Hard consulting” = “real expertise.” Hmmmm. Let’s see, which is “harder: “finding out what the published regulations in some country are (apparently hard consulting) or getting a whole bunch of control freaks with territorial ambitions and conflicting strategies to put the needs of the customer and company first and actually align their energies in a profitable way (apparently soft consulting).
There is “economy” (space, money, systems, products, numbers) and there is “ecology” (spirit, vision, alignment, collaboration, service). Economy without the ecology may make more money in the short term but it will suck the soul out of you. Ecology without good economy will bankrupt you but you’ll have close and caring friends in the unemployment line. Of course you need both! But in my experience, the most challenging by far is getting the ecology right. Some call it “culture” and these days that is pretty well all that separates one competitor from another.
When I hear executives protest that they don’t want the “soft stuff…” they probably need the soft stuff. We need to remember that just as there are lousy “hard consultants” there are lousy “soft consultants.” The trick is to find the “real experts” in both categories!
Blue chip consulting firms are still recruiting fresh graduates and paying them well. Their clients are paying for a combination of brains and experience. The fresh grads aren’t directing the consulting, they’re doing research and serving apprenticeships. Their time isn’t billed out at the top partner rate, so using them helps save clients money. Certainly, systems and procedures are critical, as well as very specific guidance.
Great consulting has great return on investment, and no consulting firm lasts long if they can’t produce referenceable work. Furthermore, the most successful consulting firms are brought back by the same clients for additional work, for good reason. Consultants who merely produce platitudes have rarely been successful for very long, regardless of the economy or the era.
Susan Rider hits the nail right on the head in her response. My clients approach me (or vice versa in some cases) and say “how can we increase the bottom line?” We work with low margins and increasing labour charges in retail, so it’s important that any project have an ROI when speaking of resultants. This is where hard expertise comes into play. The Tony Robbins life coach role is fading away. How can I make more money or increase the basket is what executives are asking now. Those of us with extensive field experience in retail can come up with what the problems are and devise solutions that do bring in more revenue. That is what I consider hard expertise!
Excellent question posed here and one that galvanized me to write a book not too long ago (“The Quintessential Guide To Using Consultants”)to address this issue and many others like it. My answer may be controversial and is designed to be compelling and generate discussion (so be forewarned)….
There are many variables interwoven into the question and the executives suggestions, so I will only address a couple here.
This executive is not seeking a consultant at all (soft, hard, or scrambled). This executive is looking for a vendor or supplier of services and any consultant that accepts the assignment is BOUND TO FAIL. Without doing a proper assessment of the organization, the opportunity, the marketplace, etc.–any suggestions or counsel is akin to playing the children’s game of “Pin The Tail On The Donkey” (where a child is blindfolded, occasionally spun around to disorient him or herself, and then asked to place a “tail” on a depiction of a donkey without a tail).
Would any skilled medical practitioner accept a patient’s view of his or her medical condition without running some tests, examining, or otherwise confirming conditions? Does an Accountant sign off on a tax return without having reviewed financial performance?
Now, to be sure, there are differences in consulting techniques, expertise, experiences, etc. And not every consultant is a match for every consulting assignment. The default however on BOTH sides of the equation is to seek a “tactic” or an action (sometimes referred to as a “deliverable”) and check the box on the to-do list and then move on. However, the problems that prevented the company from succeeding on their own without the help of the consultant remain and will torpedo the success of the project if less unchecked.
Quite simply, I would ask this executive “why do you think this is what you need?” “How did you assess ‘x’ and ‘y’?” “Why have you been unable to resolve this on your own?” “What will the consultant provide that is unavailable in-house?” “How will success be measured” (both of the project and of the consultant’s efforts)? And so on and so on.
For a project such as this one to succeed, BOTH hard and soft skills will need to be addressed. To only purchase the “hard” is to ignore the company’s cultural implications and treat the assignment as if it were a commodity purchase. To only purchase “soft” is to energize and prepare an organization to change–without recognizing how to apply the skills, where to do it, when to do it, etc.
This is a great topic and one that deserves more discussion between and among clients and practitioners. I intended to startle a few people with my answers and hope that my “thumb in the eye” is taken as intended–as a conversation generator.
Whether you call it soft or hard consulting, it boils down to the current trend that companies are looking for consultants that add bottom line value. The day of hiring a big five consulting firm that brings 20 fresh “consultants” right out of college and they learn on your project is over. Companies are looking at the bottom line results–consultants that will immediately add value through specific expertise on needed subjects.
If a company is looking at building/creating or developing a supply chain function or area, soft consulting works with process charts, benchmarks, etc. When a company has a specific goal, they need a firm with experience on that specific goal or the company pays for the learning experience. Always check credentials and experience of the consultant on the specific project that you are desiring. If there is no experience, look some more!