Supply chain consulting grows in Europe during pandemic

Almost half of the supply chain consulting firms in Europe saw their business grow last year. Meanwhile, profitability declined for 28% and it remained the same for an equal percentage. Most of the consulting projects carried out in Europe involved supply chain network design and sales & operations planning (S&OP). These are the key findings from research by Supply Chain Movement as the basis for the SCM Consulting Subway Map of Europe 2021. 

By Martijn Lofvers

Although 2019 had been a very successful year for supply chain consultancy, the number of consultants hired by firms grew even further in the past year, with 53% of firms now employing more consultants than a year ago and only 9% having fewer. Despite this, the number of consultants hired overall in 2020 is down compared with 2019.

The overall consulting activities at the major accounting and consulting firm KPMG suffered a major hit due to the coronavirus pandemic last year, yet its total profits fell by only 3.7%. In fact, its supply chain management consulting projects actually grew during the pandemic, as they did at most of the firms specialized in supply chain consulting.

The COVID-19 pandemic has not yet led to takeovers and bankruptcies among supply chain consulting firms in Europe. However, the Dutch firm R&G Global Consultants has joined forces with French consultancy Argon & Co, which also has offices in the UK, Australia, India, New Zealand, Singapore, UAE and the USA. As a result of this merger, Argon now employs over 300 supply chain consultants, with experts also based in the Netherlands, Switzerland and Germany. Argon had previously acquired the UK firm Crimson & Co in 2018.

Developing proprietary software

Supply chain consulting firms are increasingly using business intelligence tools, such as PowerBI and Tableau, in consulting projects to visualize complex supply chain challenges and analyse various scenarios. Some consulting firms, including Chainalytics and EyeOn, have developed their own software and provide ‘Forecasting as a Service’ (FaaS) on a subscription basis. Rather than investing in its own software applications, electronics manufacturer ABB has outsourced demand-planning forecasting to Chainalytics, for example. The German consulting firm Camelot is supplementing its consulting services by also offering more and more supply chain licences for demand-driven planning. However, developing proprietary software is not without risks, as demonstrated by the fact that KPMG recently wrote off €18 million for its failed risk management system project.

Mirroring the 2019 results, sales & operations planning (S&OP) and supply chain network design scored the highest in terms of the number of projects, accounting for 28% and 22% of the total respectively. Notable increases were in inventory optimization and supply chain visibility, which made up 16% and 13% of the projects respectively. The stronger focus on both inventory and visibility can be attributed to the coronavirus pandemic.

Stations on subway map

The eighth edition of the SCM Consulting Subway Map of Europe is based on information provided by the consulting firms themselves. A combination of the number of consultancy projects completed, the market share by revenue for each specific area of advice, the size of the company and the degree of specialization determines whether a company gets its own subway station on the relevant line, thus visualizing the company’s proven experience in a particular area of supply chain expertise. To be included on this subway map, a consultancy firm must have offices in more than one European country or also on other continents, although a few exceptions have been made for supply chain consulting firms with a truly international customer base.

For each specific area of advice, the consultancy firms were also asked to name the three competitors that they come up against most regularly when pitching. Companies that named each other most often are located closest together on the map.

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