Role of Consultant in Solution Designing

I have been thinking about this for a long time. If a new warehouse operation has to be designed, should the company in question employ an expert to design the warehouse solution? Based on my observations and many discussions with peers, seniors and experts in the industry, I observed there are four major options that a company has before designing a warehouse solution.

1. Plan and design operations on your own (Inhouse)

2. Employ an consultant (Final design of an solution)

3. Employ an consultant (To create baseline solution)

4. Floating an RFP (Asking vendors and service provider to create solution)

We will talk about these four options in brief followed by key merits and demerits.

1.Plan operations on your own (Inhouse)

One of the easiest options, where a company can dedicate their resources, those who understand the operations and assuming they have basic understanding of designing principles they can do all on their own.

2.Employ an consultant (Final design of an solution)

One of the most expensive options, but here the company employs a consultant who provides a final design after multiple discussions with its employer based on data provided to them. This design is floated in the market for automation and 3PL service providers to fit their products and services in the requirement.

3.Employ an consultant (To create baseline solution)

Now this is similar to option 2 except, the solution created by the consultant will act as baseline or in simple words answer to the problem. And the company floats an RFP to vendors and 3PL service providers to come up with their solution and compare with the answer they already have. This ensures accuracy and creativity.

4.Floating an RFP (Asking vendors and service provider to create solution)

This is the cheapest option available. Just float the RFP and provide data to vendors and 3PL service providers and expect them to come up with a solution. The company has to evaluate responses with each other rather than an already known answer here and I believe there is a lot more confusion in this method. And since there is no cost required to employ a consultant to get a solution, this is the first choice of the companies. If you see a whole picture with this method there are multiple companies with a  dedicated team, trying to solve the same problem for which there is no correct answer. Imagine man hours wasted, just so someone decided to cut costs by employing a consultant. I don't see a problem in this If I had to take decision financially only but it's like a deadweight lost economically.

The table below compares the above four options with key factors among many other relevant factors that have to be considered on a case by case basis.

Conclusion

There is no perfect answer to the question if a consultant should be employed for creating a warehouse solution or not.

A. However, if the company is willing to spend crores in infrastructure for the warehouse, which would be running for at least a decade impacting revenue streams, it should be a wise decision to hire a consultant and get a warehouse design created and then release the RFP. It’s better to spend a few hundred thousands before making a decision in millions which has a very long time impact. Hence option 2 or 4 makes much more sense.

B. Now, if the design or scale is very small, simple and for a very short duration of time option 1 and 4 are the best one.