Typical Supply Chain Management Projects
The engagements we take on in the supply chain practice span a very wide spectrum. For example, we can help clients take very operational action to immediately improve supply chain performance indicators, such as delivery accuracy or flexibility. We can also help with more long-term changes such as defining a new supply chain strategy or determining optimal locations for plants and distribution centers. In between, there are millions of other project types depending on what the client needs to improve. A large part of our work involves taking hands-on action on the shop floor. In all cases, the client sees an opportunity for increased sales and/or lower cost through better supply chain performance.

The improvement levers we use cut across the whole client organization and could involve relocated production, new push/pull breakpoints, new planning processes, new organization, a new distribution set-up, changed IT systems, better performance management, etc.

Impact in the High-Tech Sector
A global high-tech company approached us because customers were complaining about not getting the products they had ordered in time and were going to competitors. Delivery accuracy at that point was 13 percent; meaning 87 percent of the time, the product did not arrive on time. The key account managers estimated that 20-30 percent of sales were lost due to this issue.

We set up a project team at the client site and worked with both the client and their contract manufacturers across the world. In three months, we were able to boost delivery accuracy to 88 percent. After the project ended, the client has continued improving and is now at 98 percent delivery accuracy. We helped get quick impact which, more importantly, has been sustained due to increased skills.

We were able to analyze performance failures down to the true root causes of the problem and took immediate action. If a delivery truck broke down in a different part of the world, we knew about it, and made sure it never happened again. We didn’t treat performance breakdowns as a pure IT problem; we fixed the underlying processes before deciding if and how to invest in IT. The IT investment can typically be much lower than most clients expect.

Expert and Generalist Skills
Across the Operations Practice, generalist consultants and practice specialists work side-by-side. Generalist consultants join McKinsey directly after business school, or have a few years’ experience, and can take on projects across different functional themes. Practice specialists are experts in supply chain who come to McKinsey after a career in the industry and bring specific expertise to our teams.

When we staff an engagement team we take into account what is required for the specific situation. The practice has an immense global reach and ability to pull in people and knowledge from across the world. We come from all imaginable sectors: retail, high tech, automotive, pharma and chemicals, even aerospace and defense organizations. We are distinctive in what we do. In high-tech, for example, we are serving 18 out of the largest 20 companies in the world.

Working with Clients and Collaborating to Develop New Knowledge
We put a lot of emphasis on working together with the client, building skills, and creating tangible impact – not just PowerPoint charts. If the problem is in a plant in China, that’s where we go and work. We always start by understanding the root causes for missed performance targets.

McKinsey puts a significant amount of resource into knowledge development, often in cooperation with our clients. Supply chain is a fast moving area, and working so closely with the leading global companies, in combination with heavy investment in our internal knowledge initiatives, allows us to keep pace with development.