Phase 1: The diagnostic
The first step was for a McKinsey team working with full-time client team members from each group in the division to establish an understanding of the current cost base, major productivity drivers, and develop preliminary hypotheses on major improvement opportunities. Using stretch targets and creative brainstorming, the joint McKinsey-client team was able to generate ideas for significant savings. In addition, this first phase of the project yielded numerous insights for the client such as the magnitude of spending on relatively unmanaged contractors, the lack of consolidation of suppliers, and the opportunity cost of unstable production.

The diagnostic gave the client confidence to move forward with the planning phase.