The disruption caused by COVID-19, Russia’s invasion of Ukraine, and an uncertain macroeconomic environment underscore how critical it is for companies to achieve excellence in end-to-end operations. BCG helps clients use operational innovation to meet the operational excellence imperative.
What is operational excellence? Operational excellence supercharges efficiency and effectiveness in key steps in the operations value chain—going beyond simple cost-cutting measures. End-to-end operational excellence can deliver impressive value for companies—including a 5% to 15% boost to EBITA; cost reductions of 5% to 10% in third-party procurement spending, 15% to 30% in operations overhead, and 10% to 25% in warehousing and distribution; as well as a 50% to 80% reduction in carbon footprint.
BCG’s operational excellence consulting teams help clients unlock efficiency and effectiveness by assisting with holistic value-chain transformation to enhance service and quality, reduce costs, and mitigate risks. We help organizations respond to unprecedented uncertainty by building resilience through competitive cost advantage.
Clients choose BCG as their operational excellence partner for:
The result: a leaner, more agile enterprise that can flex as needed to win—not just now but also far into the future.
We are uniquely positioned to help clients extract maximum value from their operational excellence programs, bringing several core strengths to every project, including:
A regional spirits manufacturer aiming to become a global brand asked BCG to help optimize its supply chain. A comprehensive overview pinpointed improvement opportunities in areas such as bottling plant capacity and S&OP efficiency. The analysis uncovered significant value-creation opportunities—including $70 million to $80 million in inventory reductions and $11 million to $13 million in COGS.
Two industrial goods manufacturers merged and asked BCG to help them capture synergies, maximize service quality, and minimize costs and complexity in products and materials. Projects including cost modeling, plant capability assessments, and supplier negotiation strategies positioned the new entity to achieve $130 million in run-rate savings—more than 1.5 times the initial synergy target.
A global Tier 1 automotive supplier enlisted BCG to help stabilize its supply chain network as the pandemic struck. We established a COVID-19 task force with focus areas including health and safety and volume forecasting, and supply chain and logistics control towers to boost efficiency and decrease operating costs. Encouraged by these moves, the client considered extending the work into the following year.
A federal government agency engaged BCG to create a COVID-19-response roadmap and evaluate infrastructure investment risks, including supply shortages. Through investment-scenario modeling and interviews with senior government officials, we confirmed supply stability for most materials, identified potential logistics choke points, pinpointed bottlenecks in project-approval processes, and identified procurement-process improvements—setting the stage for recovery and resilience.
The following services and tools provide a glimpse into the level of sophistication and rigor our operational excellence consulting experts bring to every client engagement:
We help organizations respond to today's unprecedented uncertainty by building resilience through competitive cost advantage. Our new approach sets a clear mandate for action, seizing the opportunity to evaluate and achieve cost potential through organizational and operational lenses. Throughout each program, we enable clients to manage the change and ensure the organization feels ownership for sustaining cost savings. Competitive cost advantage enables companies to meet the urgent need to maintain or expand margins by becoming more cost efficient without sacrificing strategic capabilities and priorities such as climate and sustainability, digital, talent retention and acquisition, and upskilling.
E2E PT combines classic process optimization methods with the advantages of digital technologies to deliver unmatched efficiency gains and top-notch customer experiences. Through E2E PT, we help clients diagnose the performance of their end-to-end processes, envision what optimum performance would look like for each one, redesign processes to achieve target performance, activate the new designs, and craft a roadmap for further process transformation.
E2E SC optimization helps clients tackle supply chain challenges such as SKU complexity, inventory forecasting errors, supply disruption risk, unbalanced manufacturing footprints, and rising customer-service costs. Our operational excellence consulting experts start by helping clients develop a vision for their end-to-end supply chain, quantify the value potential, and prioritize improvement opportunities. We then work with them to define the operations required to achieve their business objectives. Finally, we help them implement pilots aimed at scoring quick wins that free up funds for future-state design efforts. Throughout, we deploy a suite of tools that support activities such as supply chain diagnostics, data governance, change management, and the deployment of digital solutions.
Advanced Network Optimization enables the supply chain to optimize the trade-offs between cost and service level, to determine the best feasible network strategy. The technique leverages models to simulate the supply chain network and run different scenarios by adjusting locations and routes that impact capital investment, capacity planning, and logistics operations. Powered by cutting-edge optimization algorithms, our SNOW AI tool solves end-to-end supply chain problems quickly and optimally. SNOW AI helps identify ideal factory and distribution center locations and fine-tune the overall network to build a resilient, sustainable, and cost-efficient product supply network.
The best organizations know how to turn adversity into opportunity. We share how leaders can respond to today’s unprecedented uncertainty by building a competitive cost advantage.
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