Wave supports operational-excellence program at automobile manufacturer
Challenge
Automobile manufacturer launched a company-wide operational-excellence program aimed at generating enough financial resources to sustain the next phase of investment for the future of the automotive industry—electric mobility.
The program looked at all functions’ profit-and-loss (P&L) items to identify short-term improvement and long-term transformation potential.
The McKinsey Wave team supported the central program-management office.
Approach
Prior to Wave, there was no general tracking tool in place to facilitate the management of a large transformation program (only a tool for technical material cost optimization).
Within Wave, the organization combined its major transformation program and yearly cost-optimization initiative with an overall target of $11.3+ billion in savings.
The board of directors realized that to achieve its goals it needed a tool that provided transparency to reflect the progress of each work stream while not being overly complex.
Wave gave the organization, a single platform, configured to consolidate its diverse set of initiatives across seven work streams, 27 sub–work streams, and all relevant P&L items:
- Top-line initiatives in new markets
- Material cost-optimization initiatives
- R&D spending-optimization initiatives
- Selling, general, and administrative optimization program initiatives
Results
To date, $3.0+ billion of impact has been achieved, forecasting $14.7+ billion to be achieved in 5 years.
3,600+ initiatives have reached L4 (realized).