Product Development & Procurement

Unlock the full potential of your portfolio through product and service design and transformation

Guide the creation of exciting product and service portfolios

A collaborative approach to design and development steers the creation of new products, services, and software. Our approach, which combines customer, technology, operations, and market insights, along with our partnership with McKinsey Design, creates exciting portfolios of new products and services that deliver the right experience for your customers.

Increase profitability through product and service life-cycle optimization

Our innovative methodology to optimize products shifts the focus from design-to-cost to design-to-value, and growth by design. Taking a customer-back approach, and leveraging the best from our design and analytic teams—including deep learning product digital twins—we bring together customer insight and traditional cost levers in new ways, resulting in improved products for both our clients and their customers.

Improve agility and effectiveness through development

By delivering a holistic transformation of engineering departments, we ensure organizations remain agile, effective, and ready to deal with a rapidly evolving market—including supporting our clients in identifying forward-looking insights through leading benchmarking capabilities.

Optimize spend categories

We leverage proven methodologies to optimize direct and indirect spend categories. A total-cost-of-ownership approach, including considerations of environmental impact, allows us to support clients throughout the entire procurement process to capture the full value available and find new sources of competitive advantage. We also help leading procurement functions leverage the power of analytics, revamp their operating model, and achieve a new step-up in impact delivery.

Drive productivity and innovation with suppliers

In a time of rapid innovation, we help clients leverage the broader supply ecosystem to drive process and product development. This results in maximum impact from supplier relationships, using advanced programs to create integrated product and service life cycles.

Maximize procurement impact through agile digital operating model

We guide the creation of a streamlined next-generation operating model, characterized by digital user journeys. By designing agile processes that incorporate source to pay, we help to reduce leakage and to sustain performance to meet future needs.

20%+

improved margins

from portfolio realignment

30%

quality improvement

through life-cycle management

20×

return on investment

from next-gen operating-model implementation

Featured Videos

A new approach to digital procurement—Orpheus, a McKinsey company

Following McKinsey's acquisition of Orpheus, a recognized innovator in digital procurement, we are pleased to launch Orpheus, a McKinsey company. The new service will enable spend transparency, spend and cost analytics, and value-capture management. The offering is a powerful combination of Orpheus’ advanced platform technology with McKinsey’s industry experience and content-rich services in digital procurement.
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Immersive Ideation

Immersive Ideation breaks the constraints of the physical world by using virtual-reality technology, backed by advanced analytics in fields such as procurement cost, customer insights, and pricing, to help teams visualize practical solutions to complex problems. The result is a faster, more reliable way to bring all of an organization’s expertise together in finding the best options for delivering value to customers.

Featured capabilities

Product Digital Twins
Enabling future customer experiences and accelerating product development

Cleansheet
Cleansheet analyzes a product’s underlying cost structure to help organizations establish cost transparency, set target costs, and capture savings. Resource Cleansheet applies an environmental lens, calculating the environmental impact of the entire product or service lifecycle.

Actionable spend insights with Orpheus
We combine services and software to help companies unlock procurement value from spend insights. Orpheus elevates the focus of spend analytics to guide procurement strategy development and execution.

Centers of Competence

Our Centers of Competence bring expertise in cost engineering, category knowledge, and benchmarking that deliver faster and higher impact with our best-in-class procurement and product-development tools.

DTV Labs

Across the globe, ten Design Labs support clients with design-to-value (DTV) efforts, including competitive teardowns, cleansheet costing, training workshops, customer and brand analytics, and idea generation.
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Global Sourcing Centers

We offer client support throughout the entire global sourcing process by leveraging best-cost country (BCC) suppliers. A global team of analysts from five Sourcing Centers, located in best-cost sourcing “hot spot” locations, help provide our clients implementation-level support in global sourcing diagnostics; country and category prioritization; supplier identification and evaluation; supplier bidding, negotiation and selection; and global sourcing organization design.

McKinsey Implementation

Find out how we work on site with clients to help them achieve long-term improvement and measurable, bottom-line results. We help strengthen leadership, transform processes, and build capabilities. Learn how we work intensively with clients across all industries and topics to improve performance and produce results: rapid, significant, measurable improvements in productivity, cost, quality, sales, and other metrics.
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Product Development & Procurement (PDP) Academy

We take a blended approach to learning, combining assessments with online courses, classroom training, coaching, and group work to create targeted learning journeys for different cohorts. We have a proven methodology focused on creating value.

Source2Pay (S2P)

S2P enables clients to realize the full potential of procurement savings in profit and loss by linking category-sourcing strategies to procurement operations—putting the optimal processes, organization, and digital procurement tools in place that enable simple, efficient, and compliant third-party spend.

Featured insights

Article

Procurement 2023: Ten CPO actions to defy the toughest challenges

– Supply chains face another year of volatility and inflationary pressure. Chief procurement officers (CPOs) can deploy ten resilience actions to craft a winning enterprise-wide response.
Article

Lifting the design potential of Japanese companies
– Japanese organizations are using real-world product development projects to hone critical design skills.
Article

The Scope 3 challenge: Solutions across the materials value chain
– Addressing Scope 3 emissions across industries can be complex but has the potential to radically transform business models and... create real business value.
Blog Post

“We are just getting started”: McKinsey doubles spend with diverse suppliers
– Surpassing our 2020 commitment to double our spending with diverse suppliers, the initiative has broadened our supplier base and... expanded opportunity in our communities and society.
Podcast

Digital twins: What could they do for your business?
– Less waste, shorter times to market, constant customer insights: the advantages of applying digital twins are many—if you... get the conditions right.

Featured experts

Bill Wiseman
Senior Partner, Seattle
As a senior partner in our Seattle office, brings innovation to client service through new management science for technology and...
Wajih Abou-Zahr
Senior Partner, Dubai
Brings deep experience in telecommunications, helping leading companies win market share, drive top-line growth, and transform...
Robert Hiroshi Mathis
Senior Partner, Tokyo
Brings global industry expertise to support automotive and assembly companies in achieving aspirational performance goals and...
Camilo Martins
Partner, São Paulo
Brings operations expertise to Latin American consumer companies, helping executives transform their procurement, manufacturing,...
Anna Herlt
Partner, Munich
Advises companies as they seek to optimize the value of their research and development investments, particularly within the automotive...
André Rocha
Partner, Madrid
Serves global companies across a wide range of industries such as medical devices, high tech, advanced electronics, and machinery...
Takehito Sumikawa
Senior Partner, Tokyo
Drives company-wide transformations, digital/operation transformations and systematic new business creation projects of global...
Wouter Aghina
Partner, Amsterdam
Delivers large-scale performance and health transformations, improving performance, changing culture, boosting organizational...
Dave Fedewa
Partner, Atlanta
Serves clients in consumer and retail and leads consumer durables and our growth by design work
Hubert Heersche
Partner, Amsterdam
Leads product optimization at McKinsey globally, using digital capabilities and analytics to improve product design and cost
Sander Smits
Senior Partner, Amsterdam
Transforms operational performance and optimizes research and development for leading companies in the advanced industries sector
Koen Vermeltfoort
Partner, Amsterdam
Advises oil and gas companies on capital projects, procurement, and strategy
Tarandeep Singh Ahuja
Partner, Melbourne
Leads McKinsey’s product development and procurement work across the Asia–Pacific region and the firm’s energy work in Australia...
Peter Spiller
Partner, Frankfurt
Advises companies and business leaders across industries on the development and implementation of environmentally-sustainable...
Theano Liakopoulou
Partner, Paris
Leads McKinsey’s Operations Practice in France and works with leading companies to drive operational transformations with a focus...
Marta Mussacaleca
Partner, Toronto
Designs and leads major operational transformations for basic materials clients; brings extensive expertise in procurement
Lisa Åberg
Senior Partner, Stockholm
Leads McKinsey's Operations Practice in the Nordics and supports leading industrial companies and investors on strategy, due diligences,...
Elia Berteletti
Partner, Taipei
Advises high tech, consumer electronics, and automotive and assembly clients on digital and agile R&D transformations; leads the...
Sebastian Küchler
Partner, Munich
Serves clients around the globe on R&D topics with a strong focus on transformation toward future technologies, efficiency improvement,...
Ben Mathews
Senior Partner, Ohio - Cleveland
Leader in our Retail Practice and the firm’s product development and procurement efforts; deep knowledge in leading strategy and...
Maria Goodpaster
Expert Expert Associate Partner, Miami
Advises product-centric clients on procurement, product development, product design, cost reduction, and growth through product...
Mauro Erriquez
Senior Partner, Frankfurt
Leads McKinsey’s global product development and procurement work and serves clients in materials, automotive and machinery sectors...
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Careers

Interested in a career in Operations?

A career within our Operations Practice offers the opportunity to work with the biggest companies in the world, on projects that transform their core business and build resilience for the future. We are continuously seeking the best talent at all levels and for all types of roles, and are particularly keen to talk to experienced professionals looking for their next challenge.
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