the alm vanguard: production strategy consulting

Buyer Ratings Guide

The ALM Vanguard: Production Strategy Consulting

Strategy & Operations Consulting Research Series December 2016

© 2016 ALM Media Properties, LLC 2

Buyer Ratings Guide

Contents

What Is Production Strategy? 3

ALM Vanguard of Production Strategy Consulting Providers 5

Provider Capability Rankings 7

Pace of Provider Capability Development 8

Rating Level Summaries 9

Leader Assessments 10

Provider Capability Ratings 11

Best in Class Providers 12

Provider Briefs 13

Definitions 22

Methodology 23

About ALM Intelligence 25


Buyer Ratings Guide

OverviewWhat Is Production Strategy?

Production operations occur at the nexus of two strategic links.

One is the horizontal value chain along which physical inputs are

transformed into outputs through a series of activities extending

from R&D through delivery and service operations. The other is

the vertical hierarchy that transmits and processes information

to transform strategies into outcomes through choices about

plans and the allocation and mobilization of resources to execute

them. The performance of production operations is the result of a

system of tradeoffs companies make at three levels:

1. Horizontal value chain: What, where, and how to produce

2. Vertical hierarchy: Which resources, allocated where,

managed by whom, and measured against which metrics

3. Performance imperatives: The relative importance of

operational cost, quality, and flexibility, given the context of

technology, supply, and demand in the external environment

To support their performance improvement initiatives in the

context of these tradeoffs, companies seek two types of consulting

services:

1. Production strategy: Network configuration; make-or-buy decisions on production scope; production technology,

including automation and additive manufacturing; and material technologies

2. Production and operations management: Plant layout, process design, organizational structure, governance through

the production system, workforce management, and tools and systems, including analytics and Internet of Things (IoT)

connectivity

This ALM Vanguard ratings guide evaluates providers of production strategy consulting. In addition to identifying providers

that are best in class in particular production strategy consulting capability areas, this guide rates providers in terms of their

overall ability to create impact for their clients. What sets the leaders apart from other providers in the production strategy

consulting space is the combination of deep production experience with a broader perspective that extends horizontally

along the end-to-end supply chain and vertically from corporate strategy through front-line operations.

!!!!!!!

!!

!

!!

Technology

DemandSupply

Strategy

Execution

Develop Source Make Deliver Service

Inputs Outputs

Production Operations Landscape

Source: The ALM Vanguard: Production Strategy Consulting, ALM Intelligence


Buyer Ratings Guide

Production strategy is a relatively mature consulting competency, as evidenced by the relatively high degree of consistency

among consulting providers across the capabilities required to meaningfully help clients. But at the same time, this

consulting competency is undergoing rapid change driven by a combination of shifts in both the external environment that

sets the parameters for production strategy, as well as the tools available to craft it. Providers rated as leaders in this guide

are universally focused on helping their clients inject flexibility and adaptability into their production strategies and the

processes for developing and executing them in order to keep pace with these changes. More specifically, providers that excel

in production strategy consulting share the attributes discussed below.

Global locals. With client companies gaining modeling competency and more sophisticated analytic tools, their needs are

increasingly shifting from those around model building to extending the boundary conditions of those models – namely, by

incorporating the full range of factors that need to be evaluated, from tax to suppliers’ ability to adapt to different production

configurations. To meet these needs, consulting providers must have a global footprint, but not the representative office sort.

They need the ability to inject insights into modeling, especially highly granular insights about local markets that can inform

adjustments across the value chain.

Soothsayer operators. Because strategies ultimately need to be executed by operators, and shop floor and network-level

improvements are, to an extent, substitutes for one another, consulting providers need real-world experience in production

operations and the ability to toggle between strategic and operational solutions as circumstances dictate. But client

companies have enough engineers. What they require in a consulting provider is a well-judged perspective on the balance of

opportunities at network and operational levels, as well as an informed viewpoint on how the future adoption of emerging

production technologies at a plant level impacts today’s production strategy decisions at a network level. For this latter need,

the best providers do not moonlight as technology vendors. Instead, they closely follow the developments of a variety of

potentially important technologies while investing their expertise in understanding the strategic implications of these tools

and best practices for managing their sequencing and integration.

Management pragmatists. Too often, production strategy consulting engagements turn modeling into drawn-out science

projects and lose sight of the practical realities with which companies must contend. The consequence is either the shelving

of well-intended strategies or the exacerbation of a pernicious tendency to overfocus on the reconfiguration of assets rather

than the people and management systems designed to mobilize and direct them. Most production strategy programs

ultimately succeed or fail based on the degree to which companies adapt their people and operating models for a different

asset configuration. The most effective consulting providers pair good enough modeling with a sixth sense for a client’s

management culture. They also invest heavily upfront in aligning client management with what needs to be achieved and

how that will affect decision making, organization, and performance governance.

Fleet-of-foot calibrators. Although production strategies should be designed for the long term, current market volatility

precludes extended planning followed by linear implementations. Companies need much more dynamic production strategy

processes. The best consulting providers employ sophisticated but easy-to-use analytic tools to help their clients rapidly gain a

baseline understanding of their current configuration and manipulate critical variables to evaluate different scenarios.

Overview Capability Drivers


Buyer Ratings Guide

The ALM Vanguard of Production Strategy Consulting Providers assesses firms in terms of their relative ability to create impact

for their clients. For this, the ALM Vanguard positions providers based on an evaluation of the relative breadth (horizontal axis)

and depth (vertical axis) of their overall production strategy consulting capabilities. (See the Definitions section of this report

for a detailed breakdown of underlying capabilities.) Capability depth denotes a provider’s capacity to get results for clients.

Capability breadth indicates its ability to deploy that capacity across multiple client scenarios.

Consulting is distinctive from other industries because of the variety of client contexts that providers encounter in terms of

ambitions, needs, and abilities that alter what it takes to create impact. As providers seek to deploy their capacity to create

client impact (depth) across industry sectors, geographic regions, and interfaces with adjacent functional and technical

capabilities (breadth), they increase the complexity of their engagement models. The downward slope of the line that separates

top-ranked ALM Vanguard providers from the rest of the market captures the trade-off between low-complexity engagement

ALM Vanguard of Production Strategy Consulting Providers

LEADERS

CHALLENGERS

Low High

Hig

hLo

w

CONTENDERSBreadth of Consulting Capabilities

Dep

th o

f Con

sulti

ng C

apab

ilitie

s

Firm U

Firm D

Firm O

Firm F

Firm GFirm H

Firm B

Firm M

Firm C

Firm E

Firm Q

Firm I

Firm J

Firm A

Firm S

Firm N

Firm K

Firm P

Firm T

Firm L

Firm R



Buyer Ratings Guide

models (designed to maximize the capacity to create impact for a narrow set of client applications) and high-complexity

engagement models (made to maximize deployability and create impact for a wide variety of client applications).

Although ALM Intelligence evaluates providers independently according to a consistent set of criteria, the ALM Vanguard

displays all providers in relative positions. A “high” or “low” position consequently corresponds to a provider’s depth and

breadth of capabilities relative to all of the other providers evaluated in this report. Because ALM Intelligence research covers

only providers deemed capable in the particular consulting competency, this report evaluates providers’ depth and breadth

of capabilities relative only to other capable providers rather than an overall distribution of consulting firms.

ALM Vanguard of Production Strategy Consulting Providers


Buyer Ratings Guide

The table below ranks consulting providers’ capabilities in terms of their overall depth, breadth, and client impact. Ranking

position number one denotes the top ranked provider.

Provider Depth Rank Breadth Rank Client Impact Rank

Firm A 16 3 16

Firm B 9 17 9

Firm C 6 19 8

Firm D 21 20 21

Firm E 12 13 12

Firm F 4 12 6

Firm G 2 9 2

Firm H 10 14 10

Firm I 11 10 11

Firm J 17 21 17

Firm K 5 2 3

Firm L 15 6 14

Firm M 13 15 13

Firm N 19 5 19

Firm O 20 4 20

Firm P 18 18 18

Firm Q 1 7 1

Firm R 14 16 15

Firm S 7 8 7

Firm T 8 1 5

Firm U 3 11 4Source: The ALM Vanguard: Production Strategy Consulting, ALM Intelligence

Depth: a measurement of a consulting provider’s strength based on its capabilities, including such factors as resources,

proprietary methodologies, and intellectual properties

Breadth: a consulting provider’s ability to deploy its capabilities in multiple client scenarios across industry sectors, geographic

regions, and interfaces with adjacent functional and technical capabilities

Client impact: a consulting provider’s capacity to get results for clients based on the combination of its capability depth and

breadth adjusted by the degree of engagement model complexity incurred by its breadth across industry sectors, geographic

regions, and interfaces with adjacent functional and technical capabilities

Provider Capability Rankings


Buyer Ratings Guide

Pace of Provider Capability Development

Legend: Very Strong Strong Moderate Weak None

Production Strategy Consulting

Depth Breadth Impact

Firm A

Firm B

Firm C

Firm D

Firm E

Firm F

Firm G

Firm H

Firm I

Firm J

Firm K

Firm L

Firm M

Firm N

Firm O

Firm P

Firm Q

Firm R

Firm S

Firm T

Firm U


The table below evaluates the relative strength of the pace of change in consulting providers’ capability development in

terms of depth, breadth, and impact.


Buyer Ratings Guide

Rating Level Summaries

ALM Intelligence rates providers according to a three-level scale based on their relative breadth and depth of overall

capabilities. Each rating level corresponds to an area in the ALM Vanguard graphic bounded by a downward sloping line

designed to equate engagement models of different degrees of complexity.

Rating Level Providers Description

Leaders

Firm A Firm B The Leaders are at the top of the market in terms of their capabilities to create client impact through their depth of expertise and ability to deploy it across a range of engagement models. They are unique in their ability to independently execute end-to-end projects across the full spectrum of client contexts. They range from providers in the top quintile in terms of depth of capability for low-complexity engagement models to those that combine above-average depth of capability, with the ability to deploy it across high-complexity engagement models.

Firm C Firm D

Firm E Firm F

Firm G

Challengers

Firm H Firm I The Challengers can execute end-to-end projects in low-complexity engagement models or a substantial portion of project components in high-complexity engagement models. They range from those with above-average depth of capability for low-complexity engagement models to those that combine depth of capability between the bottom third and top half of the distribution, with the ability to deploy it in high-complexity engagement models.

Firm J Firm K

Firm L

Contenders

Firm M Firm N The Contenders can execute a substantial portion of projects in low-complexity engagement models or a single phase or project instance in high-complexity engagement models. They range from those with up to average depth of capability for low-complexity engagement models to those that combine depth of capability in the bottom third of the distribution with the ability to deploy it in high-complexity engagement models.

Firm O Firm P

Firm Q Firm R

Firm S Firm T

Firm U



Buyer Ratings Guide

Leader Assessments

The ALM Vanguard of Production Strategy Consulting Providers comprises the following leaders.

Leaders Strengths

Firm A

Firm A is the consummate management pragmatist. The firm is particularly adept at helping clients think through the implications of different production strategy configurations for organizational decision-making processes and accountabilities. This is especially relevant for companies looking to adopt digital production technologies.

Firm B

Firm B invests heavily in an informed perspective on the economics of different production processes and locations. It deploys this perspective to strong effect in helping clients translate their strategies into production performance parameters to guide scenario analysis. The firm is notable for its point of view on global supply conditions and ability to assess the implications for production strategy of a particular client’s demand characteristics.

Firm CFirm C’s service delivery is notable for the way in which it combines convening methods via its “greenhouses” and workshops with an extensive portfolio of tools to quickly bring client stakeholders on board with strategic objectives and evaluate real-world scenarios.

Firm D

With the deepest capabilities and highest overall client impact, Firm D stands out for its ability to use best in class insights into external market dynamics to overturn longstanding client paradigms that can limit the potential for optimization. Additionally, by seamlessly integrating the shop floor with more strategic resources, the firm’s service delivery model facilitates a pragmatic toggling between improvement opportunities at multiple levels.

Firm E

Armed with a bevy of engineers and industry practitioners, Firm E excels at assisting clients with adapting their production strategies for new production technologies. The firm’s hallmark is its combination of cutting-edge technical insights with a highly practical approach to systematically and pragmatically implementing change.

Firm F

With an extensive footprint and reach into adjacent capabilities, Firm F can deploy its solutions more broadly across a range of client contexts than any other provider. This firm’s “capabilities-driven strategy” framework, developed by its Strategy& affiliate, is also tailor-made for helping clients translate their business strategies into a shortlist of critical operational capabilities around which to design their production strategies.

Firm G

Firm G’s highly systematic method of helping clients reconfigure their production from top to bottom yields the highest relative consistency of capabilities in the market. This gives the firm a broader ability to deploy solutions than its somewhat more limited footprint might otherwise suggest. Drawing on resources in its Expert Network, partnerships with external engineers, and the ways it internalizes its “light footprint strategy” mantra, Firm G is also notable for its ability to deploy resources at the client site with a high degree of precision in order to quickly deliver targeted changes designed for the real world.



Buyer Ratings Guide

The table below provides detailed capability ratings for production strategy consulting providers. (See the Definitions section

of this report for explanations of the capabilities.)

Provider Capability Ratings

Legend: Very Strong Strong Moderate Weak None

Provider Capabilities: Production Strategy Consulting

Diagnostics Solution Design Solution Delivery

Project Structuring

External Market Insight

Internal Client Insight Strategy Operating

SystemManagement

SystemProject

ManagementCapability

DevelopmentEnabling

Tools

Firm A

Firm B

Firm C

Firm D

Firm E

Firm F

Firm G

Firm H

Firm I

Firm J

Firm K

Firm L

Firm M

Firm N

Firm O

Firm P

Firm Q

Firm R

Firm S

Firm T

Firm U



Buyer Ratings Guide

Best in Class Providers

Providers identified as best in class evidence deep capabilities in specific areas of production strategy consulting and stand

out from their peers for their highly effective and often innovative consulting approaches and service delivery.

Capability Areas Provider Strengths

Project Structuring Firm A

Firm A exhibits a highly effective method for bringing client stakeholders into line with production strategy design criteria by tasking client teams with executing parallel analyses that crowd out nonfactual inputs.

External Market Insight Firm B

Firm B boasts the most extensive and insightful portfolio of research and experience in different production locations and technologies. It uses this portfolio to help clients consider opportunities beyond their four walls.

Internal Client Insight Firm C

Using its global network of “greenhouses” for convening client teams supported by an array of analytic tools, Firm C can significantly speed up the time it takes to establish the client’s baseline understanding of current-state production strategies and opportunities.

Strategy Firm D

The “capabilities-driven strategy” framework created by affiliate Strategy& enables Firm D to help clients translate their business strategies into operational performance imperatives in a highly concrete fashion that yields incontrovertible implications for production strategy design.

Operating System Firm E

By combining and effectively coordinating high-caliber strategic and shop floor resources through its service delivery model, Firm E has the distinct ability to objectively assess improvement opportunities at all levels and then zero in on those that not only promise the greatest impact, but also are most achievable.

Management System Firm F

Firm F’s firmwide prowess in optimizing management systems for efficiency and effectiveness serves the firm well in production strategy, a domain in which such an endeavor is too often overlooked.

Project Management Firm G

Using its technology center in Cambridge, UK, and a dedicated implementation practice that cut its teeth on complex global program management, Firm G stands out for its ability to build durable client alignment through live demonstration of opportunities and then systematically coordinate execution activities.

Client Capability Development

Firm H

Firm H’s practitioner disposition and unapologetic focus on supply chain operations gives the firm credibility, which it can readily trade on to coach the mix of technical training and behavioral change crucial to implementing new production strategies. Firm H is notable for the way it engages stakeholders from across a client’s network on pilots to scale learning.

Enabling Tools Firm IFirm I boasts the most extensive collection of tools for accelerating and sustaining improvements, including footprint optimization, design-for-value, and local market sourcing insights.



Buyer Ratings Guide


Buyer Ratings Guide

Provider Briefs

LeadersProviders Briefs

Firm A Firm A’s production strategy services are offered through the Manufacturing portion of its Performance Improvement consulting practice. The firm’s consulting angle centers on helping clients use new production technologies and digital tools to reconceive their strategies. For Firm A, this hinges on combining insights into new technologies with those regarding the economics of the client’s business, as well as its point of view on instilling and sustaining change in organizations. Firm A organizes its service delivery around two areas: new production technologies (such as additive manufacturing) and new digital tools. For the former, the firm concentrates on assisting clients with building a business case based on insights into the cost curve of the technology relative to different applications, and an assessment of the technology’s economic impact across the supply chain. For the latter, the firm focuses on helping clients better use network modeling tools by ensuring the right questions are asked, and that clients take account of all the potential degrees of freedom across their supply chains to optimize their footprints. Because the firm is convinced that organizational change is crucial for achieving and sustaining improvements, its service delivery encompasses setting up a digital operating model that can filter, test, and govern management and scaling activities.

Firm B Firm B organizes its production strategy offering around the Lean & Manufacturing division of its Operations Consulting practice. It traces companies’ failure to update their production strategies to the complexity of the analysis and a lingering belief that the economics of production location and scope choices are static and subject to binary high-cost versus low-cost designations. The firm believes that increasing market volatility demands a more dynamic approach to network design and make-or-buy decisions, which is grounded in a total cost perspective (including logistics and risks) and informed by an outlook on the likely trajectory of demand. Firm B’s service delivery starts by analyzing strategy in terms of economics, markets and customers, and technology and skills as a basis for optimizing the production network and scope. The network redesign process consists of four steps: analyzing production portfolios and volumes by location, understanding drivers of performance variance across the network, scenario modeling, and testing a shortlist of scenarios for fit with long-term strategies. The make-or-buy process entails a detailed assessment of true costs at the part level, as well as a scenario-based analysis of these relative cost findings against strategic value.

Firm C Firm C operates a dedicated Supply Chain and Manufacturing Operations group within its overall Strategy & Operations consulting practice. For production strategy, the firm draws additionally on resources within its analytics, location strategy, and tax practices. Firm C positions its consulting approach broadly in response to the imperative for production strategies to adapt to increasing complexity, whether it is the result of M&A transactions, efforts to capture growth opportunities, or increasing customer expectations. The firm emphasizes making production strategy dynamic, taking into account constraints and opportunities up and down the supply chain, and ensuring strategic decisions are pragmatic and executable. Firm C’s core footprint optimization service delivery comprises five activities: 1) establishing design principles for the footprint that bring production in line with business strategies through workshops and analysis of demand and supply characteristics, 2) developing a total landed cost model, 3) assessing qualitative factors (such as risk), 4) evaluating extreme scenarios that flex both upstream and downstream supply chain levers, and 5) designing an implementation roadmap. To support its service delivery, Firm C uses a number of proprietary resources, including its “greenhouse” innovation labs for convening client stakeholders, global sourcing insights and DFootprint analytic tools, and research conducted by its Center for Industry Insights (e.g., global manufacturing competitiveness index and advanced technologies initiative).



Buyer Ratings Guide


Buyer Ratings Guide


Firm D Firm D delivers production strategy through the dedicated manufacturing segment of its Operations consulting practice. It starts from the premise that using a total landed cost calculus for network optimization is, on its own, insufficient. Instead, the firm holds that network optimization needs to be informed by a view of the future and how it will impact tradeoffs in terms of the relative value of agility, standardization, cost, and lead- time performance. It believes network optimization should blend the company’s strategy with the industry and technology contexts as well as a horizontal view across the value chain. Consequently, Firm D emphasizes two value-adds: 1) insights into future economic and technology trends, and 2) the ability to orchestrate across procurement, production, logistics, and R&D. At the core of Firm D’s service delivery model is its network optimization framework, which embodies the firm’s holistic approach by aligning the strategic context and business model for linking product and operations strategies with execution capabilities as well as eight dimensions of the production strategy. To support its service delivery, the firm uses an iPad tool for high-level network simulations and its “sensitizer” for Excel and Tableau that evaluates more detailed scenarios. For clients contemplating digital production strategies, Firm D is partnering with additive manufacturing vendors and the Digital Manufacturing and Design Innovation Institute on a training and showcase center. The firm is also adapting its capability centers for additive manufacturing training and runs an end-to-end prototyping facility in its center in Munich.

Firm E Firm E, based in the UK, delivers production strategy services through its Supply Chain Consulting and Manufacturing Technology practices. The latter practice consists of engineers and scientists concentrated in Germany and the UK. Firm E builds from the premise that, too often, companies base their production strategies on narrow and outdated criteria. Instead, the firm’s approach revolves around three principles: 1) production strategy decisions must be built on an understanding of customer requirements in the different markets where a company competes and how manufacturing capabilities can furnish competitive advantage, 2) companies need a clear assessment of their operational performance across their networks in order to balance the relative costs and benefits of strategic versus operational improvements, and 3) companies have an informed point of view on how future changes in technology will alter demand and supply constraints on which their production strategies are based. Firm E’s service delivery emphasizes technology roadmapping for material handling & assembly operations, production technology investment appraisals, R&D & production footprint strategy that combines structure & process, and innovation & technology scouting. Integral to the service offering are changes to clients’ operating models designed to enable more cross-functional decision making related to production technology and footprint investments. Firm E uses its technology center in Cambridge, UK, which provides design, prototyping, and machine-building facilities to help clients develop and pilot new technologies as part of production strategy engagements. To support its service delivery, Firm E also operates a dedicated Implementation practice with specializations in complex program management and implementation capability building.


Provider Briefs


Buyer Ratings Guide


Firm F For production strategy consulting, Firm F draws principally on dedicated production resources within its Operations practice and Strategy& affiliate. In cases where a detailed understanding of product costs and configuration is important to production strategy decision making, the firm uses its Management Engineers affiliate. Firm F’s consulting philosophy concentrates on assisting clients with adapting their production strategies toward more regionalized and agile models amid substantial changes in the external environment (e.g., the combination of demand for customization and slow growth in advanced economies, changing global energy and labor costs, and new technologies). Believing that long-held assumptions and ways of working limit companies’ ability to respond to these sorts of changes, the firm prioritizes helping clients build comprehensive business cases to reconceive their operating models. For this, the firm emphasizes quantifying the value of flexibility, adapting organizational power structures for customer responsive models, and developing the value chain, including suppliers, to be able to operate in the model. Firm F’s service delivery model centers on helping CFOs or COOs execute transformational change by deploying diversified teams of strategists, execution resources, and technologists. Firm F also draws on its tax expertise to consider the full implications for net income and cash flow. The firm’s consulting process starts with strategy to determine the true business requirements based on the nature and true needs of the markets and customers served. From there, Firm F works to identify points of leverage across the value chain supported by the application of proprietary industry studies and benchmarks. In this, the firm pays careful attention to links between product design engineering, production operations, manufacturing and distribution footprints, and suppliers. For clients looking to use operational digitization as a basis for redesigning their production strategies, Firm F has a variety of alliances, including enterprise resource planning vendors and, most recently, with GE to deploy GE’s Predix cloud-based operating system for the Industrial Internet at clients as part of broader transformations.

Firm G Headquartered in Germany, with an extensive presence in Europe and a global network, Firm G delivers production strategy through its Operations Strategy Competence Center. The firm starts consulting engagements from its perspective on the megatrends that determine the context in which manufacturers compete, and incorporates its overarching “light footprint management” point of view that prizes agility and a more contingent conception of strategy. This approach translates into a focus on helping clients address four challenges: adapting their organizations for distributed production networks, being responsive to customer demands for customization, managing the interface between human operators and intelligent machines, and satisfying the sustainability expectations of a broad stakeholder community. In this context, high priorities for Firm G include assisting clients with shifting away from a traditional focus on product development toward a customer value-add perspective and understanding the implications of Industry 4.0 for enabling de-automation and more distributed production networks. Firm G delivers its services at two levels. One, production strategy, addresses the business and operating models and value chain positioning to distinguish core from noncore activities and competencies. The other, production tactics, focuses on the production footprint and supply chain control and steering mechanisms, such as the replenishment mode and supplier management. The firm’s service delivery, targeted at client senior management, incorporates a best-practice audit, strategy development, and performance improvement activities. The firm places great importance on implementation, for which it uses its “expert network” composed of approximately 400 industry practitioners who lend credibility and support clients in the practical execution of initiatives.


Provider Briefs


Buyer Ratings Guide

Provider Briefs

ChallengersProviders Briefs

Firm H Firm H provides production strategy services through the supply chain and manufacturing offerings of its Performance Improvement consulting practice. It believes manufacturers need to continually review and adapt their infrastructure to changing production economics and customer needs. With its traditional focus on the North American discrete manufacturing sector, the firm is particularly attuned to factors that are disrupting the offshoring calculus and occasioning opportunities for reshoring and nearshoring. Notable attributes of Firm H’ consulting approach are a focus on spurring transformative change by overcoming incrementalism and crossing functional silos, as well as an emphasis on careful planning to ensure a smooth transition. Firm H’ core footprint optimization service consists of developing strategy (using its proprietary manufacturing-footprint-optimization model to accelerate project delivery), planning the transition, and executing that transition via program management. The firm employs a practical, results-driven delivery model inspired by its restructuring heritage, notably its three- to six-week QuickStrike® diagnostic method. Moreover, with its highly experienced team model, the firm embeds its consultants in the client organization to support execution activities. This includes performing interim management roles. Firm H also draws on insights from its annual nearshoring survey and manufacturing outsourcing cost index research to inform its consulting.

Firm I Based in France, Firm I began as a logistics-focused firm and has since expanded its offerings functionally across the operations value chain, as well as in sales, general, and administrative (SG&A) activities and integrated specialized transformation capabilities. The firm delivers production strategy through a dedicated manufacturing service line. Firm I’s consulting approach is motivated by the belief that production strategy has become much more challenging inasmuch as it is more constrained by factors beyond the traditional focus on labor and logistics costs – and those factors, in turn, are less predictable. To respond to these challenges, Firm I asserts that companies need to 1) think holistically and cross-functionally about how to optimize their production strategies for the full range of factors that influence them, and 2) optimize for five rather than 20 years in order to stay responsive to fast-changing markets and technologies. Firm I provides its services via two offerings: make-or-buy and production strategy, the latter encompassing footprint optimization along with product and production technology strategies. Firm I orients its service delivery around four questions led by make-or-buy, reflecting its view that this decision sets the parameters for production strategies. From there, the firm addresses where to locate facilities based on cost and non-cost drivers (e.g., responsiveness, how many facilities with which configurations are required to deliver the necessary volumes and varieties of output, and which best practices will maximize the potential output of facilities). Firm I’s service delivery model disaggregates projects into two parallel work streams. One concentrates on the definition of a consistent set of criteria on which to base decisions. These criteria are grounded in the strategic priorities of the business and the implications for the relative prioritization among different performance drivers such as cost, responsiveness, or compliance. The other work stream consists of a series of analyses of factors that drive optimization decisions. The intent is to steer the client organization toward a fact-based consensus.



Buyer Ratings Guide

Provider Briefs


Firm J Firm J delivers production strategy services through the manufacturing arm of its Operations Practice. The firm organizes its consulting approach around six sources of disruption: globalization and regionalization, new integrated and collaborative supply chain models, heightened volatility and risk, workforce changes, new productivity levers beyond lean, and new production technologies, including 3-D printing and tighter integration of humans and robots. Firm J offers two production strategy services: Strategy and Footprint Optimization. The Strategy service establishes the production operating model, including production and replenishment modes, as well as make-or-buy decisions. The Footprint Optimization service is market-based, starting with an assessment of relative product maturity and market complexity as a basis for allocating production across lead, server, and offshore plants. The firm grounds the scenario analysis against a set of predetermined design principles that reflect the client’s corporate goals and priorities.

Firm K Firm K, headquartered in Germany, positions itself as a strategy and organization consultancy for value chain management. The firm focuses on process manufacturing sectors, including chemicals, consumer goods, and pharmaceuticals. The watchword for Firm K is “integrated.” The firm’s consulting approach is a U-turn from companies’ traditional focus on obtaining better insight into future trends. Instead, it seeks to instill a smooth and standardized flow of materials and information across end-to-end processes that enable companies to live with the volatility and complexity in the external environment. To this end, the firm devises production strategies that furnish the necessary flexibility. Firm K’s service delivery is inspired by three points of view: 1) production strategy needs to be part of a journey rather than an isolated initiative, and therefore requires senior management commitment to transform the entire operating model; 2) animating a new operating model requires aligned performance management; and 3) IT integration is critical for institutionalizing a new operating model. In this context, Firm K delivers production strategy as a first step in the transformation journey. For this, the firm employs a framework that optimizes traditional strategy decisions based on their alignment with a client’s product portfolio, market strategy, organization, and culture. The process starts with an assessment of customers, products, and current performance as a basis for coming together on relative priorities across cost, speed, flexibility, and service performance dimensions. Informed by these insights, the process simultaneously generates strategy scenarios and identifies opportunities to reduce product complexity.



Buyer Ratings Guide

18

Buyer Ratings Guide


Firm L Firm L anchors its production strategy offering in its Strategy & Transformation consulting practice, which is organized around four capabilities: strategy, organization design, business transformation design & delivery, and transaction services. Firm L’s consulting philosophy helps companies adapt their production strategies to achieve the potential of digital technologies by blending sector expertise with the firm’s experience in managing organizational transformations. Drawing on its project experience and research collaboration with the Massachusetts Institute of Technology, the firm’s approach reflects its viewpoint that successful transformation depends on a mix of changes in enterprise architecture, operating models, governance, and people aligned to a vision of a digitally enabled business model. Firm L organizes its service delivery around two offerings: network design and make-or-buy analysis & digital production strategy. For the former, the firm uses a standardized process for gathering and structuring data, baselining the current structure and costs, defining and running scenarios, and validating the business case for sensitivities to critical design parameters. In this, Firm L seeks to balance a high degree of sophistication with pragmatism by tailoring its optimization methods to the complexity of the client context, incorporating an assessment of the client’s and its suppliers’ abilities to transform, and carefully designing the transformation roadmap. In delivering digital production strategy services, Firm L starts by defining the strategy for the future business model and then uses a library of more than 150 use cases to prioritize the deployment of digital enablers. The firm utilizes a network of applied innovation exchange labs to showcase digital technologies for clients and prepare proofs of concept.


Provider Briefs


Buyer Ratings Guide

19

Buyer Ratings Guide

ContendersProviders Briefs

Firm M Firm M anchors its production strategy offering in the manufacturing segment of its Operations Strategy consulting practice. Its consulting method grows from its point of view that manufacturers must be more agile to take advantage of volatility in the external environment. To move clients in this direction, the firm advocates more dynamic operating models that can facilitate the ongoing movement of resources and activities around their networks in response to changing conditions. Firm M organizes its service delivery around two offerings. One, Manufacturing Strategy, defines a global production agenda and supporting capabilities in line with the client’s broader corporate vision and business objectives. The other, Manufacturing Network Management, develops visibility and operational control across the production network for monitoring and controlling production, inventory, compliance, and risk. To support its service delivery, Firm M operates manufacturing innovation centers in Chicago, Milan, and Shanghai, where clients can experience new production technologies and develop a roadmap for adopting them.

Firm N Firm N, formerly part of the Altran Group, positions its services at the intersection of strategy, technology, and innovation. The firm is headquartered in Belgium and has a global network of offices concentrated in Europe. Firm N’s consulting angle reflects its view that rapid changes in the production context alter the goals that companies have for their production networks, the sort of structural configuration they require, and the nature of the coordination mechanisms necessary to manage them. The firm places a strong emphasis on centralizing and standardizing production strategies, while accommodating local customization of operational processes and technologies. Firm N organizes its service delivery around a dedicated operations management practice. The core operations strategy offering aims to help clients define the goals and capability requirements for their production operations, develop alternative network scenarios based on an assessment of internal and supplier capabilities and expected demand trends, and devise an implementation plan.

Firm O Headquartered in Atlanta, GA, with additional offices in Asia, Europe, and North America, Firm O is a supply chain analytics specialist. The firm organizes its production strategy service delivery through its Supply Chain Design consulting practice. Firm O’ consulting approach reflects three points of view regarding the nature of the challenges confronting its clients. One, taking account of all of the variables that impact network performance and evaluating all of the potential scenarios entails an exponential increase in the complexity of mathematical modeling and systems processing capabilities. Two, companies struggle to assemble self-sustaining internal teams with requisite skills and tools for developing and evaluating these models. Three, the pace of change means that ongoing design is more efficient and effective than intermittent assessments. Firm O delivers its services primarily through 12- to 16-week engagements organized around data validation, current state modeling for network visibility, and scenario analysis. Rather than using a traditional top-down, hypothesis-driven service delivery model, the firm starts with bottom-up data discovery as a basis for an unbiased recommendation. To increase the fidelity of its models, the firm uses proprietary freight market data as well as real estate and location data sourced through its partnership with CBRE. To help clients overcome the challenge of building internal capabilities, the firm is increasingly shifting its service delivery toward ongoing managed services. The firm’s staffing model consists of data-savvy analysts and lead analysts, as well as internally cultivated senior advisors.


Provider Briefs


Buyer Ratings Guide

20

Buyer Ratings Guide


Firm P Firm P provides production strategy services through its Supply Chain & Operations practice, which addresses strategic architecture, operational excellence, risk & resilience, and talent & capability development. The firm terms its approach to consulting in this space as “supply chain reinvention,” which it positions as an answer to three challenges: slow growth in advanced economies and difficult-to-capture growth in emerging economies, changing consumer behaviors that require a demand response-oriented network, and hard-to-control costs. This reinvention approach transforms supply chains into sources of competitive advantage that address these challenges now and in the future. The touchstone of Firm P’s service delivery is a “value proposal” for the client, based on an understanding of its business model and assessment of the performance tradeoffs across flexibility, responsiveness, reliability, asset efficiency, and cost. Armed with this proposal, Firm P organizes its service delivery around two components of the strategic architecture: 1) the operating model, and 2) network and flow optimization. Drawing on a database of templates, the operating model service addresses strategy, governance and performance management, processes and organization, the transactional model, the tax and legal structure, and systems architecture. The network and flow optimization service simultaneously designs the global network, product flow, and route to market, using the firm’s global trade optimization and cost-to-serve applications.

Firm Q Firm Q Consulting offers production strategy consulting services through its Operational Strategy & Transformation practice. The firm’s consulting method reflects its belief that the root cause of poor performance is typically a disconnect between strategy and operationalization. Firm Q holds that network optimization cannot occur in isolation from how a company manages and motivates its people. Consistent with this view, the firm prioritizes the alignment of management ownership and accountabilities alongside efforts to optimize strategy. Firm Q directs its service delivery at answering three questions: 1) Where should production and supply hubs be located? 2) How do network scenarios address future challenges? 3) How can the selected strategy be implemented? The process starts with an analysis of demand trends and an assessment of production requirements to meet market expectations. The next step consists of an internal assessment of potential operational performance and make-or-buy gains, and the client’s organizational capabilities. The last step involves developing scenarios and implementation plans. Integral to Firm Q’s service delivery is the training of client personnel to enable them to independently conduct future programs.

Firm R Firm R’s production and operations management offering is provided through its Digital Operations & Internet of Things practice. It organizes its consulting method around helping companies capture the opportunities afforded by IoT connectivity to remake their business models. The firm believes that companies need to redesign their operating models, including their production strategies, to be more responsive to customer demand and better able to partner with an evolving ecosystem of suppliers and collaborators. Firm R’s service delivery is targeted at what it calls the “next-generation supply chain,” with offerings for agile manufacturing, cognitive process optimization, supply chain optimization, and operating model change.


Provider Briefs


Buyer Ratings Guide

21

Buyer Ratings Guide


Firm S Firm S primarily delivers production strategy through its supply chain and operations advisory practice. The firm’s philosophy about production strategy derives from its broader belief that companies should pair cost improvements with a demand-driven supply chain operating model that gets away from the traditional reliance on demand forecasts and responds to fast-changing customer needs and increasingly frequent supply disruptions. Firm S starts with the customers and works backwards to design an end-to-end process mirrored by an integrated IT architecture that responds to their changing needs. It offers targeted services for logistics and network optimization, but orients its service delivery around production strategy redesigns in the context of broad-based transformative changes that encompass the supply chain operating model and legal & tax implications. The firm uses its “Source” consulting toolkit to organize its service delivery, which provides a global platform for integrating insights, methods, project delivery, and collaboration across its member network. Strong areas of focus include IT connectivity that yield better visibility across the value chain and more integrated cross-functional planning activities to facilitate coordination across the supply chain network. To support its service delivery, Firm S produces an annual global manufacturing outlook study.

Firm T Firm T provides production strategy services through the supply chain arm of its Operations Consulting practice, as well as via its Industrials consulting practices. Its consulting approach positions production strategy as part of broader choices that companies need to make related to value chain participation. For Firm T, the critical need is to understand where value chain participation maximizes value creation and how changes in business models can transform the value creation potential. The firm offers a targeted supply chain strategy service, which incorporates production strategy alongside R&D, sourcing, and distribution. The service delivery includes three phases. The first of these is a capability and performance diagnostic of all production sites. The second is an optimization model that incorporates an assessment of global demand organized around aggregated families of product SKUs. The third phase brings together diagnostic findings from the optimization model to determine the best practical transformation and a roadmap to get there.

Firm U Firm U’s production strategy resources are housed in the Operational Excellence division of its Industrial Products practice. Its consulting method seeks to avoid the sort of suboptimization that results from an overly narrow, cost-focused calculus or strategic decisions made in isolation from operational performance considerations. For the firm, the point is to design production strategies in a way that yields more efficient, less complex value chains by concentrating on core capabilities that align with competitive advantages and strategic priorities, such as entering new markets or serving local demand. The firm is actively adapting this approach for digital production by focusing on how opportunities to more seamlessly integrate value chains (from customer to R&D) alter the production strategy equation. Firm U organizes its service delivery around a five-pillar methodology for operational excellence. The first pillar, strategy and vision, establishes objectives and an implementation strategy that is consistent with the client’s strategy and operational context. The second, operational practices, devises practices that support performance improvement consistent with the client’s value chain positioning and business priorities. The third, site structure and network optimization, optimizes the configuration of production locations for priorities related to production efficiency and global footprint. The fourth, management systems, develops a performance management system that extends from senior management to shop floor workers. The fifth, behavior and culture, works to make change sustainable by engaging the entire organization in continuous improvement.


Provider Briefs


Buyer Ratings Guide

22

Buyer Ratings Guide

DefinitionsProduction Strategy Consulting Provider Capabilities

Capability Areas Capabilities Descriptions

Diagnostics

Project StructuringEstablishing goals and objectives for the project and determining which stakeholders need to be involved from the client organization, consulting firm, and third parties

External Market Insight Using knowledge and experience to inform diagnostics through benchmarking and trend analysis

Internal Client Insight Obtaining internal client insights through data analysis, interviews, and workshops and incorporating them into diagnostics

Solution Design

Strategy Aligning the solution with the client’s market, customer, product, and functional strategies

Operating System Configuring the client’s physical, people, and information assets and processes to generate the value-add intended by the strategy

Management SystemMobilizing, managing, measuring, and motivating clients’ resources through governance, incentives, organizational structures, and performance management to execute the strategy

Solution Delivery

Project Management Sequencing activities and allocating, aligning, and coordinating resources to execute and sustain a solution

Client Capability Development

Developing the client’s technical skills and adapting mindsets and behaviors to execute and sustain the solution

Enabling Tools Using tools for diagnostic and design activities that support the client in executing, sustaining, and refreshing the solution



Buyer Ratings Guide

MethodologyOverview

ALM Intelligence has been researching the management, financial and IT consulting industry for over 40 years, studying

the global consulting marketplace at multiple levels. The resulting market analyses help buyers of consulting services to

effectively target best in class providers, and help consulting providers to identify and evaluate business opportunities.

The proprietary research methodology comprises four components:

■ Extensive interviews with consulting practice leaders, financial analysts, consulting clients, and clientside industry experts

■ Data and background material from the proprietary library of research on the consulting industry and individual firms

■ Quantitative data collection from primary and secondary sources

■ Key economic data relevant to the sector(s) being analyzed

The research output for a project is derived predominantly from primary research.

Data is obtained through a centralized effort, with teams of analysts collecting, assessing, fact-checking, and refreshing

baseline information on leading consultancies and consulting markets. This information populates an extensive knowledge

base of consulting providers, widely regarded as among the most comprehensive in the world.

Working collaboratively, analysts narrow their research to the most discrete and pertinent intersection of consulting service/

industry/geography.

The experience and knowledge of the analyst team are critical to the success of these research endeavors. Directors and

associate directors average over a decade of consulting and/or analyst experience, with an emphasis on professional services.

Junior analysts typically bring an average of five years of consulting and/or analyst experience.

The group’s long-term relationships with consulting clients and industry leaders are based on trust and respect. ALM

Intelligence’s fundamental goal is to deliver objective assessments and insightful viewpoints on the management, financial

and IT consulting market.


Buyer Ratings Guide

MethodologyHow We Evaluate Consulting Providers

ALM Intelligence’s goal is to deliver objective assessments to help buyers of consulting services effectively identify and

maximize the benefits of working with best in class providers and help consulting providers to assess business opportunities

and competitive threats.

ALM Intelligence evaluates providers with respect to a particular consulting competency area in terms of the following

baseline criteria. The general criteria below are refined and customized over the course of the research effort based on input

from clients and providers:

■ Consulting approach: What are providers’ points of view on the root causes of client challenges? How do those points

of view inform choices about how best to resolve them? How do providers view the intersection of these needs and

solutions with other consulting or non-consulting offerings or crosscutting themes?

■ Consulting organization: How do providers organize and deploy their capabilities? What sort of consultants and other

human resources do they possess and how do they obtain and use them? What sorts of partnerships, collaborations, and

alliances with external parties do they use to bolster their capabilities?

■ Consulting service delivery model: How do providers deliver their services? Do they employ any particular processes or

methodologies, preconfigured tools, or other unique elements of service delivery? Do they follow any particular sequence

or direction in their service delivery? How do they measure outcomes?

■ Client pain points and needs assessments: What factors most influence successful engagements in the opinion

of clients? What capabilities do providers need to bring to their engagements to be compelling? What sources of

differentiation matter most to consulting buyers?

■ Future development: What investments are providers making or planning to make to enhance their future capabilities?

In addition to briefings with consulting buyers and providers, ALM Intelligence uses a mosaic approach to derive its findings.

This incorporates primary research conducted with industry practitioners, academics, and other experts and secondary

research on providers’ public information and other third-party sources of data and analysis.

During the research process, ALM Intelligence identifies through interactions with consulting buyers, providers, and other

sources the critical consulting capabilities that matter for the specific competency area. It presents its findings on providers’

capabilities in three ways:

1. Segmentation of providers into peer groups accompanied by a detailed breakdown of providers’ relative strength in each

capability area

2. Designation of best in class providers for each capability area

3. ALM Vanguard analysis that positions providers relative to one another in terms of their overall depth and breadth of

capability


Buyer Ratings Guide

About ALM Intelligence

ALM Intelligence provides accurate and reliable market sizing and forecasts on consulting services worldwide, needs-analysis

and vendor profiling for buyers of consulting services, timely and insightful intelligence on the top consulting firms in their

respective markets, and operational benchmarks that measure consulting performance. ALM Intelligence’s research spans

multiple service areas, client vertical industries, and geographies. Our analysts provide expert commentary at consulting

industry events worldwide, and offer custom research for Management Consulting and IT Services firms. More information

about ALM Intelligence is available at www.consulting.almintel.com.

ALM, an information and intelligence company, provides customers with critical news, data, analysis, marketing solutions and

events to successfully manage the business of business. For more information, visit www.alm.com.

About the S&O Consulting Research SeriesALM Intelligence’s exclusive, qualitative assessments of provider capabilities at the engagement level inform buyers of

consulting services competencies. The S&O consulting series explores competencies within the corporate development

and corporate functions segments. Corporate development consists of enterprise strategy, organization & operating model

strategy, finance, and mergers & acquisitions. Corporate functions comprises supply chain, sourcing & procurement, customer,

and research & development.

For further information and to purchase ALM Intelligence research, contact [email protected], 855-808-4550.

the alm vanguard: production strategy consulting

Documents