Fortna's business evolution is as unusual as the firm itself. Just after the end of WWII, Fortna opened for business selling hand trucks out of a small one-room office in Reading, Pa. In the 1950s, the business line was expanded to forklift trucks and conveyors. In the 1980s, the business refocused around conveying equipment and installation. But in the last decade, the firm has gone through another evolution: focusing now around supply chain consulting. The result has been a doubling in size over the last five years. To better understand the firm's recent success, Consulting One on One sat down with Fortna's President, John A. White III.
Consulting: You're currently known as a comprehensive supply chain consulting firm, but that's not always been the case. How and why has the firm transformed itself?
White: Since our founding in the 1940s we've gone through numerous changes. We began as a material handling equipment provider and, over the next few decades, added the capabilities our clients wanted. Initially, that meant material handling integration work. And, over the last ten years, we've turned into supply chain consultants. But because of our own legacy experience, and the needs of our clients, we're not a typical supply chain consulting practice. We don't just suggest a new strategy or just work out deals with suppliers or just improve processes on the shop floor. We do it all—we start with a strategy and work it through the entire design and implementation process.
Consulting: Older, more established companies sometimes are reluctant to change for fear of losing long-term clients. What's been your firm's experience?
Fortna: We didn't decide on taking our company in new directions based on our own thinking. It was developed after talking with our clients. We asked, 'What are you looking for that you're not getting today?' And they said they wanted more accountability from their advisors, they wanted us to partner with them during and after the project—after the 'consultants' are gone. The results speak for themselves: 85 to 90 percent of our revenue each year comes from repeat customers. In the last six years, 85 percent of our clients have asked for more than one project. Every client we have is referenceable.
Consulting: Why do you think your clients are so loyal?
White: Because we're there from strategy through design and implementation, we're focused on our clients' business case. Our holistic view of our clients' supply chains means we're fully aware and involved in helping them think through the implications of our suggestions from the point of view of their people, processes, systems and assets. And we're more than willing to share in the risk, relative to the results. We'll absolutely put our fees at risk, based on the specifics of the engagement and how the client wants to measure success: customer satisfaction, return on investment, or quantified improvements in productivity rates, capacity, etc. Every time we've put fees at risk on S&D, for example, we've been paid in full and in some cases clients said we exceeded expectations and paid us more. We're not seen as consultants, we're their partner.
Consulting: How do your offerings compare to those of your competitors?
White: I've worked for two of the global firms with massive supply chain practices, but they can't match the breadth and depth we offer. We take full responsibility for a firm's supply chain, so there's no finger pointing. We design, procure, install, train employees and test every aspect of a solution within their distribution center. Leaning on our decades of material handling equipment experience, we're very comfortable engineering any new equipment. And we manage all of the sourcing directly to the manufacturer— down to the nut- and bolt-level. We can take tens of thousands of components across hundreds of suppliers and roll them into a single solution. No big consulting firm does that; they all outsource that work to providers. And we can help with the people issues. We offer services around labor standards and incentives, training, high performance leadership training and change management.
Consulting: How big is your firm today?
White: We've been in consulting for ten years, but we've really been expanding aggressively during the last five years. We're currently at about $100 million and employ 200 professionals. Our revenue has doubled in the last five years; headcount is up about 50 percent in that time. But we worry less about our size and more about the advice we give to clients. For example, L.L. Bean asked us to help them build a new distribution center. We found that by increasing efficiencies we could get more out of their existing facilities and they didn't need a new center. A new distribution center would have meant more business for us, but it wasn't in the client's best interest. And that's our bottom line.
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