Ideas and Insights

  • Preparing the Supply Chain Pharma Needs

    A.T. Kearney Pharma Supply Chain Panel 2014

    Pharma supply chain managers should have complexity reduction, end-to-end inventory management, supply chain segmentation, and greater agility at the top of their agendas.

  • Shifting Labor Relations

    Mastering Disruptive Change in Manufacturing

    A collaborative labor relations strategy can help manufacturers to successfully manage the growing patchwork of stakeholders and union representatives.

  • Supplier Relationship Management: How to Maximize Supplier Value and Opportunity

    This final installment in the firm’s procurement trilogy shows companies how to save time and money—and gain a competitive advantage—by working strategically with suppliers.

  • New Manufacturing Technologies

    Mastering Disruptive Change in Manufacturing

    With manufacturing technology heading in dramatically new directions, executives need to keep their eyes wide open and be ready for whatever comes.

More from Operations

  • The Road to Contract Manufacturing Success

    The Road to Contract Manufacturing Success

    Supply Chain Management Review, May-June 2014

    The chasm between outsourcing expectations and results can be wide. A new study sheds light on how manufacturers can close that gap.
    By Patrick Van den Bossche, Rajeev Prabhakar, Joseph Blount, and Kevin Philippi


  • Harnessing Supplier Energy: The Next Frontier in Procurement

    Harnessing Supplier Energy: The Next Frontier in Procurement

    Leading procurement organizations engage key suppliers in a strategic dialogue that is focused on long-term creation of mutual value.

    Abstract | More | PDF | iPad | Kindle

    People want and need more of everything—products, services, information—faster and through more channels than ever before. Worldwide demand for water, food, and energy is soaring and is already depleting natural resources and putting pressure on preservation and sustainability. Add in more financial volatility from global capital imbalances and geopolitical volatility and you’re talking about real challenges.

    So it is no surprise that procurement organizations are becoming more complex and difficult to manage. CXOs expect more from procurement. Procurement must continue to do its “day job” and drive cost reductions while simultaneously becoming more strategic by delivering value beyond cost to the organization.

    Leading procurement organizations have expanded the traditional view of procurement, moving beyond its role as a transaction center between the organization and its suppliers, to the role of strategic partner and steward for the organization. They no longer simply engage suppliers through tactical negotiations focused on cutting margins. Rather, they leverage and engage key suppliers in a strategic dialogue focused on long-term creation of mutual value. These leaders are fully unleashing supplier resources and energy and, as such, consistently appear in the upper echelons of our Assessment of Excellence in Procurement (AEP) study. Much like marketing leaders have tapped into “customer energy” to help shape the brand promise, procurement is tapping into “supplier energy” to improve and sustain their longer-term competitive advantage.
    This paper introduces the concept of supplier energy as the next frontier in strategic supply management. 

  • Supply Chain 2025—Trends & Implications for India

    Supply Chain 2025—Trends & Implications for India

    A joint A.T. Kearney-CSCMP study

    As India's economy grows and the operating environment evolves, it is critical to understand the macro trends that will shape future supply chain design.

    Abstract | More | PDF

    As India's economy grows and the operating environment evolves, it is critical to understand the macro trends that will shape future supply chain design.

    By 2025, the Indian economy will have grown multifold and consumers will have become much more heterogeneous, presenting organizations with a unique set of opportunities and challenges. The supply chain will be impacted by various evolving macro-factors for which organizations will have to prepare. Within this context, the Council of Supply Chain Management Professionals (CSCMP) and A.T. Kearney undertook a joint study to determine the major trends that will shape India’s supply chain by 2025, and the impact these trends will have on organizations. While numerous “wild cards” are likely to shape future supply chains in India, this paper highlights six trends that we believe will have the biggest impact and discusses how organizations should prepare:

    • More mega cities. A growing population and urbanization will lead to several cities becoming mega demand centres. Increased congestion and space constraints will require organizations to create a different supply chain model to serve these cities. Going vertical, common carrier deliveries, use of electric vehicles, and flexible unloading are some options to consider in designing supply chains for these cities.
    • Proliferation of segments. Increasing consumer segments, the emergence of new channels, and a greater number of products will lead to the creation of multiple new segments. Organizations will need to customize activities across their supply chains to deal with different segments, and move away from today’s “one size fits all approach.”
    • Improved supply chain infrastructure. With planned investments in infrastructure—road, rail, and ports—the supply chain is expected to become faster and more connected across all modes. The increased size of the multi-modal network will drive larger and more consolidated facilities.
    • Better regulatory climate. Regulatory changes are expected but the timing will continue to remain uncertain. GST, fiscal incentives, and sustainability and activism are some of the factors that are likely to change. Scenario-based planning will help in preparedness.
    • Increased globalization. India will become more connected globally with larger numbers of imports and exports and an increased share of global trade. More organizations will have a regional manufacturing footprint. Managing risk, traceability, compliance, and responsiveness will be critical to success.
    • Affordable technologies and big data. Decreasing costs of technology will lead to more data and information on supply chains. Organizations will need to build up their technological and analytical capabilities to leverage and benefit from this data.

    While many changes will occur by 2025, some aspects of the supply chain will remain as they are today. For example, volatility in supply and demand will continue, making risk management and scenario planning critical. Business pressure to deliver “more with less” will not change anytime soon, forcing supply chains to further increase efficiencies and balance customization with consolidation. And skill gaps in talent will likely endure, moving organizations toward selective automation, skills development, and better working conditions.

  • Road Map to Success for the Construction Equipment Industry

    Road Map to Success for the Construction Equipment Industry

    With high infrastructure growth expected in India, the earthmoving and construction equipment (ECE) market is estimated to increase by 20 to 25 percent.

    Abstract | More | PDF

    A well-developed infrastructure is a foundation for growth in any country, paving the way for a better quality of life and a rapid rise in gross domestic product (GDP), especially for developing countries such as India. However, building infrastructure in a country as diverse and populous as India isn’t easy. The country is behind in terms of infrastructure when compared to other leading developed and developing countries—for example, India has one of the world’s densest road networks but a low number of multilane highways, and its airports are among the most crowded in the world.

    In its 12th Five-Year Plan, the government has earmarked approximately $1 trillion for infrastructure investment. Consequently, infrastructure spending is expected to grow from 7.2 percent of GDP in 2012 to 9 percent by 2017. This is likely to spur the demand for earthmoving and construction equipment (ECE), and if the industry’s full potential is realized, the result could be a $16 billion to $21 billion industry by 2020.

    This significant opportunity raises some important questions: What challenges need to be overcome for the ECE industry to harness this potential? What enablers will help the ECE industry fulfill its potential? What global best practices can help address these challenges, and how effectively can they be used in India?

    To answer these questions, A.T. Kearney and the Indian Construction Equipment Manufacturers’ Association (ICEMA) conducted a joint study to identify the industry’s challenges and opportunities and assess potential solutions. The findings are presented in this report.

  • Best Practices in Strategic Multichannel Fulfillment

    Best Practices in Strategic Multichannel Fulfillment

    Ivey Business Journal, March-April 2014

    Getting fulfillment right is more mission-critical for a multichannel environment compared to a traditional brick-and-mortar setting.


  • Unlocking the Value of Tail Spend

    Unlocking the Value of Tail Spend

    Supply Chain Management Review, March–April 2014

    There are three key considerations organizations must keep in the forefront of their planning when implementing A.T. Kearney’s Advanced Tail Sourcing framework, these include skills, scoping, and change management. 


  • Answering the Reshoring Question

    Answering the Reshoring Question

    Product Design and Development, 10 February 2014

    The factors that make reshoring interesting such as, low energy costs or a shrinking labor differential with China are inherently cyclical, but no less important for manufacturers. 


  • Collaborative Supplier Innovation

    Collaborative Supplier Innovation

    Work with your suppliers to generate profitable, value-building growth.

    Abstract | More | PDF

    Innovation is key to enabling future success. But development costs can quickly eat up the benefits of the growth in sales and profit generated. This is one reason why more companies are reshuffling their internal capabilities to rely on a cadre of well-chosen partners—especially suppliers—to pursue profitable, value-building growth.

  • Six Driving Forces in Manufacturing

    Six Driving Forces in Manufacturing

    Supply Chain Management Review, January–February 2014

    Companies that can accurately anticipate how trends will affect the various elements of their manufacturing strategy, such as the future need, location, and size of factories, can turn challenges into profitable opportunities.


  • Solving the Reshoring Dilemma

    Solving the Reshoring Dilemma

    Supply Chain Management Review, January–February 2014

    If you’re not sure whether or not reshoring is right for you or your company, here are some of the tools and factors you should consider.  


  • It's Time for a Step Change in Pharma Operations

    It's Time for a Step Change in Pharma Operations

    View study abstract and request the full report.
    The pharmaceutical industry can unlock $135 billion in value by learning from leading CPG firms.

    Abstract | More

    The competitive landscape of the pharmaceutical industry is changing dramatically. Sales are slowing, innovation is losing its punch, and complexity is rising in markets and technologies. The old pharma paradigm of a pure focus on innovation and markets is changing; price, cost, and service are beginning to matter more. As a result, the economics of the industry are changing, and operations is becoming a differentiating factor in the competitive landscape. Leading Big Pharma companies understand the new rules of the game and have started investing heavily in improving capabilities and shifting paradigms in operations. They are seeking to be first in this race. Pharma companies that want to be on the winning end must follow suit.

    Comparing pharma’s operations with that of the consumer goods industry shows significant opportunities for pharma to improve in all major operations areas, including service, inventory levels, efficiency, quality, and innovation speed. By taking a page from the operational practices of consumer goods firms, the pharmaceuticals industry can unlock billions of dollars in value. They can make a step change in performance without reinventing the wheel, while still continuing to support the pharma industry’s economics.

    The value of this endeavor is enormous. Assuming an operational transformation that merely cuts the performance gap with the consumer goods industry by only half, a typical pharma company could increase its earnings margins by 7.5 percentage points and free up inventory worth roughly 11 percent of one year’s sales. A firm with about $24 billion in sales—the average sales for a top-20 company in 2012—could unlock roughly $1.8 billion in yearly earnings and $2.6 billion in cash from working capital reductions. Over the whole industry, this would equal $135 billion in additional cash.

    There is no silver bullet that magically brings results. Reaching world-class performance in pharma requires a holistic transformation based around a four-pronged “battle plan”: operations strategy, planning and reporting, execution, and people management. Within each theme are the moves pharma executives can make to create an immediate impact on their results and build a growing, long-term advantage.

  • Re-shoring: Is it Fab or Fad?

    Re-shoring: Is it Fab or Fad?

    Supply Chain Management Review, November 2013

    It’s still unclear whether re-shoring is a temporary fad or here to stay, but it’s important to understand the underlying conditions that drive re-shoring attractiveness and how to make this trend stick.


  • Buckle Up: Six Driving Forces in Manufacturing to Take On Now

    Buckle Up: Six Driving Forces in Manufacturing to Take On Now

    From the Industrial Revolution to the 1990s high-tech boom, manufacturing shifts with periodic waves of disruptive change.

    Abstract | More | PDF | iPad | Kindle

    As the latest waves of change gather momentum, 21st-century manufacturers face decisions that could create opportunities or competitive challenges as significant as Eli Whitney’s idea of interchangeable parts or Toyota’s improvements on Henry Ford’s assembly line. Today, the potential impact of new technologies such as 3-D printing, the risks inherent in global supply chains, the exponential growth of data, and the changing socioeconomic demographics are just a few of the new disruptors.
    As a result, the future of manufacturing is again a hot topic in public debate and on boardroom agendas. Companies are looking for a unique competitive edge or ways to respond to the unexpected. Manufacturers that can accurately anticipate how these trends will affect their businesses can turn challenges into profitable opportunities. 
    In this first in a series of papers on mastering disruptive change in manufacturing, and based on our work in six core areas and on insights gathered from our Global Excellence in Operations Factory of the Year competition, A.T. Kearney identifies the driving forces we expect to be among the most influential to manufacturers.
  • Making Supplier Relationships Work

    Making Supplier Relationships Work

    A.T. Kearney offers nine ways to interact with suppliers, identifying formulas that characterize true supplier relationship management.

    Abstract | More | PDF | iPad | Kindle

    We rely on suppliers for a wide range of products and services that allow us to succeed, yet we know surprisingly little about these relationships or how to fully harness them. Some believe these relationships are all about cutting costs. Others think they are the sum of every category management initiative ever tried. We have a different view. We believe that suppliers, and our relationships with them, are an area yet to be fully explored or exploited. At a recent A.T. Kearney Executive Roundtable, 50 chief procurement officers from major U.S. and global corporations conceded that managing suppliers effectively is one of their biggest challenges, and that they are not currently prepared to address it.

    A team of A.T. Kearney partners is spearheading an initiative to fill this void. Called the True Supplier Relationship Management (TrueSRM) Project, and funded by leading high-tech players around the world, we have developed a comprehensive approach to managing supplier relationships—comprehensive because it works in all industries. This paper is about our initial findings, which will culminate in a book scheduled for release in 2014.

  • Shifting Dynamics

    Shifting Dynamics

    Supply Chain Quarterly, 2 October 2013

    The demand for airfreight has decreased, but with flat fuel costs and retail expansion in developing markets, that could change.


In the News

Read insights from A.T. Kearney consultants quoted in the media.

Global Leaders

Xavier Mesnard
Xavier Mesnard
Patrick Van den Bossche
Patrick Van den Bossche
Terry Innerst
Terry Innerst
Asia Pacific
Joon Ooi
Joon Ooi
Asia Pacific
Inigo Aranzabal
Inigo Aranzabal
Europe, Middle East, and Africa

Global Excellence in Operations
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