Operations consulting relates to both advisory and implementation services that are tailored towards improving an organisation’s value chain. Consultants may spend extended periods of time (from a couple of weeks to a few months) working at a client’s site/offices whilst providing these services. The market for operations consulting is estimated to be worth nearly $64 billion (data for 2014), making it the largest segment within the global consulting market (i.e. nearly 30% of the total).
- Value Chain: this refers to all the different stages a business goes through to produce a finished product, starting with the receipt/processing of raw materials and ending with the creation of the final product that customers actually purchase. Each stage adds ‘value’ to, and impacts upon the cost of producing, the final product. For instance, the product must be designed, manufactured, packaged and distributed and each of these stages constitutes part of the ‘value chain’.
Consultants work with clients on projects involving a wide variety of different objectives relating to boosting company performance. Clients may want to increase profitability through cutting costs, improving profit margins or increasing revenue. Clients may need help to design and implement strategies aimed at enhancing the customer experience or enlarging its customer base, market share and global scope of operations. Consultants may be required to research into the potential demand in other jurisdictions/markets, undertake detailed competitor analysis and/or research new locations to which elements of the supply chain could be shifted in order to cut costs (i.e. to countries with lower labour and factory costs). Working on-site can help consultants to fully understand a company’s internal processes and consequently better inform the advice eventually given to clients.
Clients may need help defining and achieving their objectives or identifying their operational deficiencies. Clients may want to expand or differentiate their product offering, which could involve consultants helping them to develop strategies to enhance their brand awareness. Clients may wish to improve internal communication (especially where businesses are complex multi-national organisations) or enhance operational efficiency (i.e. through consolidating or augmenting the supply chain). Clients may require help motivating, recruiting or organising personnel, including guiding personnel through periods of internal change (for instance during and after the implementation of new technology, the consolidation of internal procedures or the restructuring of human resources). Consultants may be involved in the design, administration and delivery of training programmes to ensure the work force develops the knowledge and skills required to enhance company performance. Moreover, clients may already have an idea of the strategies that they believe could resolve certain issues. However, they may still engage consultants to help them quantify the potential cost savings to which proposed strategies could give rise in order to determine whether the cost of implementing such strategies would be a worthwhile investment.
By Jake Schogger - City Career Series