Operations
We increase margins through operations excellence without compromising customer or consumer satisfaction.

What we do

In response to consumer demand and competitive pressure, packaged-goods companies call on their operations functions to do more with less. At the same time, operations need to stay agile to support innovation and manage complexity. We help our clients achieve these goals in many core areas, including the following:

Operations strategy

We work with leading consumer-goods companies to define long-term operations-transformation journeys and help them build strategies and organizations that lead to commercial growth.

Operations digitization

Autonomous planning, digital procurement, and Industry 4.0 applications create a significant opportunity to achieve the next horizon of operations excellence. We support our clients in aligning their operating models, capabilities, and culture to the digital age to ensure successful and sustainable digital transformation.

Complexity optimization

We help clients distinguish the “good complexity” that consumers make decisions on and are willing to pay for from the “bad complexity” that has evolved over time but is no longer needed. Mastering complexity to drive growth is a combination of “market back” processes—such as assortment—and supply forward transformation—such as supply-chain optimization.

Design to value and growth and product development

Our design-to-value-and-growth approach integrates market analytics, competitive intelligence, and supplier understanding with deep consumer insights and design capabilities. The approach helps develop authentic, human-focused, and charismatic products, services, and experiences.

Next-generation procurement

To offset the effects of commoditization, we support our clients with broad category strategies that take a total-cost-of-ownership perspective to sourcing. Our services include risk management, lean sourcing, and value-chain optimization in collaboration with suppliers.

Manufacturing and sourcing

Our manufacturing experts work with consumer-goods companies to build manufacturing networks that are flexible, responsive, innovative, and resilient. We empower clients to take advantage of new technology and digital capabilities to achieve higher performance at a lower cost with more agility.

Customer-centric and omnichannel supply chains

We help clients optimize the flow of goods through segmentation, better planning, the application of lean principles, and increased supply-chain collaboration. Our distinctive approach to shaping customer-centric and omnichannel supply chains typically results in higher service levels, leaner inventories, and lower costs.

Zero-based budgeting

Our ZBB 360 tool leverages the Anaplan planning solution and drives fast, agile, at-scale, and sustainable productivity improvements.

Examples of our work

Omnichannel supply chain

Our work with a leading global apparel, footwear, and sportswear brand reduced average delivery time from D+3 to D+2.

Design-to-value and growth and product development

We partnered with a global food company to define new opportunities for snacking by gaining a fuller understanding of potential customers. Our customer insight and design experts specified three new products with a potential $200 million market opportunity and developed innovation capabilities in the client organization.

Zero-based budgeting

We ran a ZBB program that included target setting, ZBB 360 development, budgeting support across 20 global markets, and long-term support for a consumer client for a total spend of more than £500 million across ten indirect spend categories. The engagement led to a total cost reduction of more than 20 percent, more than 10 percent of which was in the first year.

Featured Capabilities

Diagnostics and benchmarking 
Our diagnostic toolkit includes Supply Chain 360° and Manufacturing 360° assessments as well as consumer operations benchmarking and walk-throughs to assess digital maturity. We maintain proprietary supplier and pricing databases for various countries, as well as a library of global best practices in purchasing and supply chain management.

Solution tools 
We have a wide range of customizable tools to design operations solutions. These tools include the SC Designer, which provides scenario-based network optimization and instant evaluation, and the Agricultural Commodity Research Engine, which transforms how ingredients are sourced.

Acquisitions and industry collaborations 
We invest heavily in cutting-edge thinking. Recent acquisitions include Quantum-Black, Analytics Operations Engineering, LUNAR, and Veryday. Our collaborations include working with Rockwell Automation, Microsoft, and the Digital Manufacturing and Design Innovation Institute.

Related Insights

Article - McKinsey Quarterly

Hidden sources of better supply-chain performance

– High-level benchmarks often obscure paths to operations improvements. New data and metrics that tap underlying performance dynamics... offer better visibility.
Article

Supply Chain 4.0 in consumer goods

– In Supply Chain 4.0, supply-chain management applies Industry 4.0 innovations—the Internet of Things, advanced robotics,... analytics, and big data—to jump-start performance, and customer satisfaction.
Article

My supply chain is better than yours—or is it?

– More-detailed benchmarks show that supply chains can still yield significant value—building on the investments so many CPG... companies have already made.
Article - McKinsey Quarterly

When subpar operations threaten margin growth

– Consumer-goods companies with weak cost management will struggle to increase the bottom line—no matter how much they grow.

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