The term “logistics consultant” is often thrown around loosely in our industry. But let’s be clear: a logistics consultant is not a 3rd Party Logistics (3PL) provider or a contract employee. Indeed, those roles are long-term, meant to support or take over specific supply chain functions. A logistics consultant, on the other hand, steps in for a short time to add expertise and value to a specific project with a clear beginning and end. Their job is to analyze, assess, and make targeted improvements to the supply chain.
In this article, I’ll provide specific examples of what a logistics consultant does. Also, I’ll identify seven functional areas where a consultant may provide their expertise. Lastly, I spell out the difference between a logistics consultant and other types of service providers such as a 3PL.
“Logistics must be simple—everyone thinks they’re an expert.”
– unknown
1. First, Some Examples Of Why Use A Logistics Consultant.
The primary reason to use a logistics consultant is that you do not have the in-house resources to implement a pressing logistics-related project. Below are some examples of what may trigger you reaching out to a logistics consultant.
a. New TMS.
For instance, you need help selecting and implementing a new transportation management system (TMS) to include data integration with backend systems.
b. BI Dashboard.
In this case, you have good, quality data, but need help creating business intelligence (BI) report dashboard for better decision-making.
c. Improve Operations.
For example, you need recommendations and justification to make improvements in inventory management and control procedures.
d. Improve Customer Experience.
You are losing sales as evident by customer complaints of poor service and slow order fulfillment. In this case, you need help on identifying solutions to improve customer service.
e. Acquired A New Business Unit.
For instance, your company acquired another company and facilities and you need a network analysis on how to integrate new facilities into an existing network.
f. New Revenue Opportunities.
For example, you need expertise to develop a strategy to create new market opportunities.
g. Reduce Transportation Costs.
In this case, you need a consultant to analyze your freight bills and make recommendations.
h. Improve Delivery Experience.
Ecommerce customers are complaining about their parcel delivery experience. In this case, you need a parcel consultant to make recommendations on how to improve your shipping operation or recommend a new carrier.
i. New Warehouse Automation Needed.
For instance, you need help in deciding what warehouse equipment and automation are needed and best solutions to implement.
j. Independent Competitive Analysis.
For example, you need to know if your operational costs are too high compared to your competitors and what to do to improve your business standing.
k. Optimize Supply Chain Network.
For instance, your warehouse is full and you need to know if it is better to relocate, make better use of space or reduce your inventory
For more examples on why you might need a logistics consultant, see Logistics Help’s Logistics Consulting for Small Enterprises and ClimbTheLadder’s Logistics Consultant’s Duties.
2. Seven Areas of the Supply Chain Where A Logistics Consultant Can Help.
Functionally, supply chains are multifaceted and can require a vast range of expertise. So, there is not one person that is an expert in all supply chain functions. Indeed, there are countless areas where a business may need expertise for a given project. See below for a breakout of different supply chain functional areas where a business may need a consultant.
a. Transport Strategy and Planning.
First, logistics consultants can help with determining transportation modes (truckload, Less-Than-Truckload, air cargo, ocean container, parcel, courier, etc.) and carrier. Additionally, they can help you with outsourcing options, reverse logistics, selecting a Transportation Management System (TMS), and integrating transportation with your warehouses.
b. Warehouse Design and Planning.
Also, a consultant can help you with warehouse automation, distribution facility design, robotics, warehouse conveyor systems, materials handling equipment, warehouse management systems (WMS), and kitting.
c. Optimize Inventory.
This includes strategies to meet variable demands and avoid either having excess or missing stock.
d. Improve Procurement Processes.
This could include strategies to acquire components, raw materials, and goods. Additionally, this could include implementation of procurement systems and improved procurement practices.
e. Supply Chain Design, Planning and Optimization.
This is more of a strategic consulting role where the consultant looks at overall network design. Specifically, this can include optimization of transportation, warehousing, 3rd party logistics (3PL) options, order fulfillment, or suppliers. Also, this includes logistics audits, data analytics, process re-engineering, and support of implementing industry standards.
f. New Technology Implementation.
To stay competitive, business leaders need to continually evaluate and implement new supply chain technologies. Because of the wide range of technologies, many companies look for outside help. Even large companies, rely on outside technology consultants that specialize in a particular type of logistics technology. In many cases, an independent technology consultant is needed to help identify what is hype and what is not as well as help select and justify a technology implementation.
g. Subject Matter Expert (SME) to Support Logistics Management.
This is a case of a company needing logistics management support, executive recruitment support, or expert support for special projects like dispute resolution or expert witness.
See Solistica’s The Role of Consulting in Logistics and IPC International’s What Does A Logistics Consultant Do? For more information on where a logistics consultant can help your business.
3. How Are Logistics Consultants Different From a 3rd Party Logistics (3PL) Company?
The key distinction between a logistics consultant and any other type of expertise is that a consultant is project-based, providing their expertise of a specific time period and a particular outcome. Also, as a consultant is project based and has valuable expertise, they cost more. Again, the primary reason a business needs a consultant is that they need outside expertise to solve a specific problem. Once, the project is complete, the consulting engagement ends. If a business has an on-going need for a particular type of expertise, then it is best to either hire an expert or outsource to a third party. See below, for more details on how a logistics consultant differs from a 3rd Party logistics provider.
a. What A 3rd Party Logistics Company Does.
Sometimes, a 3PL is thought of or even called a logistics consultant. Yes, a third-party logistics (3PL) company can offer your business logistics consulting services. However, that is not their primary function. Indeed, by partnering with a 3PL, you are outsourcing your logistics operations to them long-term, normally years. Positively, the main purpose of these companies is to manage all or part of your supply chain and logistics, not just consult. For example, a company may outsource operations like order fulfillment, warehousing, and shipping. Now on occasion, a logistics consulting engagement might lead to outsourcing some of your logistics operations to a 3PL.
b. How Do Logistics Consultants Differ from a 3PL.
On the other hand, logistics consultants are project-based, providing a wide range of professional services to help a business improve or transform their logistics operations. Specifically, a logistics consultant has the following characteristics:
- Industry Focused. Indeed, most logistics consultants are focused on a particular industry such as automotive or pharmaceuticals. This is because each industry has particular procedures and focus when it comes to implementing logistics and deploying technology.
- Specialized Functionally. Further, most logistics consultants focus on a particular aspect of the supply chain such as inbound logistics or warehousing.
- Wide Range of Organizations and Expertise. Also, logistics consultants can come from either a very large consulting firm, a 3PL, or a one-person operation. In a lot of cases, consultants are former logistics executives. Further, most large and medium-size consulting companies will augment their consulting staff with MBAs from top schools. Normally, these logistics consultants will have degrees in operations management, supply chain, or finance.
For more information from Supply Chain Tech Insights, see the latest articles on Supply Chain and Outsourcing.
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