subject: Is Hiring A Supply Chain Consultant Expensive? [print this page] Are you getting what you pay for? is the right question to ask.
It is very obvious that nobody is willing to work for free unless for charity purposes.
Securing the best process starts by determining the requirements, specific experiences and expectations to be addressed.
It will allow to judge if you are looking for a true supply chain expert or a supply chain consultant who is just good enough for the job. The interview and recruitment cycle will make these fundamental differences transparent anyway.
Personally I do not like to word expensive for various reasons:
It does not provide a true comparison
It is only about directs costs
It does not reflect the total positive impact and value
It potentially undermines quality aspects.
Supply chain consultants are not typically low-cost although it depends strongly on the chosen model.
Some work on a fixed daily rate that varies in function of the need, content and context. Classical Western-European ranges can go from 450 up till 3500 /day.
It provides a safe income base for the consultant but it could out-balance the generated results and might drive tasks to be lengthy in time.
Others work on a no cure no pay basis and calculate their earnings based upon generated savings.
Aligning the way to measure these is of course an absolute must!
This method minimizes the risks for the temporary employer and drives consultants to go for it in a stronger way compared to the first scenario. The more time is lost, the less the external party is paid.
Consultancy costs versus savings do range between 10 % and 35 % under normal circumstances.
Both parties however need to understand that not all results can be translated into hard money.
Quite often, supply chain consultants, use hybrid systems of both for payment.
This means, working at a reduced daily rate that will be deducted from the result oriented fee once materialized. It allows the service provider to earn some money in between while it gives the employer a stronger guarantee for success.
Like for any business, the various parties involved will need to be aligned on the commercial terms, timeline and expectations to be fulfilled.
