Turning procurement data into insights and a source of competitive advantage to enable a step up in value delivery
Organizations are faced with continuous pressure to improve productivity, accelerate innovation, and drive ambitious environmental, social, and governance (ESG) agendas. “Winning” in the current context requires predicting and reacting to changing conditions: demand uncertainty, hyper volatility, rapidly shifting consumer preferences, and supply disruptions, to name a few.
Typically, more than 50 percent of a company’s value chain depends on third parties, so procurement has a unique role to play in navigating this complex set of drivers by harnessing the power of analytics.
More than 86 percent of CPOs lack the ecosystems required for real-time data processing and less than 20 percent of procurement data available is used to inform decision making. By leveraging the large amounts of data available to procurement functions, technology can generate powerful insights that convert to bottom-line impact at speed and scale.
Our approach
We partner with organizations to create analytics lighthouses in procurement. Six building blocks power our approach that focus on establishing a data and analytics engine and transforming the operating-model.
Examples of our work
Large pharmaceutical company
We helped a large pharmaceutical company transform their procurement function and implement analytics as “the way to do business.” The work involved creating a robust data backbone of procurement and other data combining ~15 ERPs across 15k SKUs and ~10k suppliers, building a cutting edge analytics engine, and transforming the ways of working to drive maximum adoption. As a result procurement’s value creation was enhanced by 70%, stronger collaboration with suppliers was enabled and ~200 roles transformed.
Industrial equipment player
We helped a top-quartile industrial equipment company, looking to take procurement to the next S-curve of capability, secure greater than $500 million in annual productivity. Results were achieved through an end-to-end digital and analytics transformation: more than ten new tools and use cases were deployed and a data lake was created that consolidated more than 70 enterprise resource plans (ERP). We helped establish a new operating model and more than 800 individuals were trained.
Leading steel player
We guided a global steel company as they embarked on a tech-enabled procurement-transformation program to implement more than 15 digital work products to achieve a $30 million annual recurring impact. In addition, over 60 procurement managers were trained through a field-and-forum approach to sustain and carry the impact forward.
Our people
Theano Liakopoulou
PartnerParis
Leads McKinsey’s Operations Practice in France and works with leading companies to drive operational transformations with a focus...
Ketan Kumar
PartnerLondon
Advises pharmaceutical and healthcare clients on the design and implementation of major performance transformations driven by...
Aasheesh Mittal
PartnerWashington DC
Coleads McKinsey projects at the intersection of procurement and digital and analytics, including generative AI
Miguel Ángel Alcaráz
PartnerMexico City
Brings extensive expertise in Latin American operations to help automotive, energy, banking, and consumer-goods companies enhance...
Tarandeep Singh Ahuja
PartnerMelbourne
Leads McKinsey’s product development and procurement work across the Asia–Pacific region and the firm’s energy work in Australia...