Our clients are sometimes surprised that after having spent time and money reviewing and designing their requirements, converting the concept into reality is often more difficult than initially anticipated.
Many clients wish to implement the solution themselves, believing they have the resources in- house and are keen to keep the amount of external spend for support to a minimum. The Logistics Business is frequently asked to come back at a later stage and help to “realign” the project and assist in the completion of implementation.
- The challenges of In-house Implementation
The Logistics Business team reviewed a number of recent projects and gained some significant insight into why implementation projects struggle when they are implemented purely in-house.
- Project Organisation
Most companies are not geared to manage projects effectively. Projects require a clear brief, beginning and end. Most organisations are geared around continuous daily business and operations, focusing on meeting operational deadlines. Project deadlines consequently slip and lose focus as day-to-day activities take priority.
Often the Sponsor for a project has insufficient executive decision power to deal with any disputes that might arise. On the face of it, a warehouse implementation project should be in the domain of the Logistics or Supply Chain Director. However, at critical points, such a project may impact on procurement, marketing (esp. campaigns) and other functions. Disputes arise, as another department “dictate” that the project cannot do something now, which again can cause delays or have serious knock-on effects.
Projects often require top sponsorship, such as the MD or CEO, who has the ultimate ability to make a decision and resolve implementation disputes.
Even with the best intentions and allocating the best people on the project, they and particularly their time is in heavy demand – because they are the best. This can result in them being pulled in many different directions and find that their expertise and time is spread too thinly. This can result in meetings being missed as operational day-to-day requirements take priority.
The right skill set can sometimes be thin on the ground. Many organisation do not have the technical in-depth skills associated with project management, project documentation, testing and dealing at the detail technical level with suppliers. Specific skills needed to develop aspects of the contract, processes, control systems and WMS are often only partially available. This means staff spend time learning and rectifying problems which could have been avoided if the knowledge had been available at the beginning of the project
- Supplier Coordination
Delays can arise when suppliers have differing ways of assessing / signing off specific performance criteria, which may not correspond with the set business criteria. Having specialist knowledge in this area and having someone to act as a neutral middleman to deal with these issues often helps to manage them before they escalate. In addition, specialist knowledge in this area often allows minor changes in the design that meets both the cost and performance criteria.
With hindsight and looking at a cost/ time comparison, the assessment concludes that the overall project implementation cost for external support usually falls between 10% and 12.5% of the overall budget spend, if planned from the outset. However, rectifying issues that might arise during the implementation, usually cost slightly more for external support and the project might experience significant additional equipment / adjustment costs and from likely delays – which in turn might impact on the internal opportunity cost.