Operations strategy

We help our clients improve their business processes and operations to strengthen their operational resilience

Strategy& operations strategy consulting: improving resilience and maintaining flexibility

Disrupted supply chains, supply gaps, production stoppages and location discussions: The past few years ruthlessly exposed the vulnerability of our globally interwoven economy. At the same time, the rules of the globalization game are changing rapidly. Protectionist tendencies are on the rise, geopolitical tensions are growing, and climate change is accelerating. All these factors are putting pressure on organizations’ business processes and operations. Whether partner networks, production sites, sustainable supply chains, or ESG approaches: Companies need to question, analyze, and realign their operations strategy in a number of areas.

Geopolitical resilience is a key success factor in this multipolar world. Companies must be able to respond quickly and effectively to changes and fluctuations in the market. To do this, they need to build resilient supply chains that take both current and future crisis regions into account, develop sustainability strategies, and analyze product portfolios and value chains in order to identify strategic growth areas. To be able to realize all this, organizations must invest in their process digitization and build an IT architecture fit to handle operational business requirements.

With our cross-industry expertise in operations strategy, we help our clients optimize or realign their business processes and operations. For example, we work closely with them to redesign supplier networks and rebuild ecosystems to strengthen the resilience of the entire supply chain. We support cost optimization along the value chain and accompany our clients on their way toward net zero and sustainability. We also help drive digitization and establish an effective IT infrastructure. Whenever necessary, we draw on a broad PwC network with expertise in the areas of tax and law as well as audit and assurance to offer our clients comprehensive solutions.

Our expertise in operations strategy

COO agenda: As operations strategists working in all major industries, we help our clients to solve their most pressing challenges. Our strategic agenda for Chief Operating Officers provides a holistic, industry-tailored perspective on today's and tomorrow’s hot topics that need to be addressed by operations decision-makers.
Operations resilience: Rising cost pressures. Protectionism. Disruptions. Sustainability considerations. All of these factors were affecting supply chains even before the global pandemic. But now, as the world changes at an unprecedented speed and on an unforeseen scale, more business leaders than ever are realizing the need to reimagine the way they are operating.
Supplier/ecosystem management: We support companies along the entire value chain - e.g. in optimizing their supplier relationships and purchasing organization - to create a resilient and decarbonized supplier base.
Digital operations: We help our clients drive the digitization of their business and build an IT infrastructure that is aligned with the real needs of their business.
Profitability: We support our clients in holistic cost optimization along their entire value chain.
Sustainability: We support our clients on their way to net zero and with the development of an individual sustainability agenda.

COO agenda

Priorities for COOs in the aerospace and defence industry

Product lifetime in the A&D industry is significantly high and optimizing life cycle costs boosts the efficient implementation and operation of A&D programs. Typical challenges stretch from initial solution design to building a resilient support network, finding the right commercial framework and ensuring efficient execution along the design, production, and servicing phases. By leveraging our existing efficiency hub approach, we have optimized operations along the production life cycle and successfully introduced new concepts like performance-based logistics or lean management principles. We have proven that significant improvements can be made on a commercial and operational level, especially in availability, when public sector and industry partners collaborate closely.

Highly complex ecosystems spread across the globe have suffered severe disruptions such as Covid-19 and geopolitical events with immediate impact on operations through delivery delays or even supplier insolvencies. On the other hand, the A&D industry is now facing a rapid ramp-up in OEM production, and suppliers putting global supply chains under pressure. These new conditions foster the need to reassess the current supply chain set-up and to develop potential improvements (e.g., deglobalization or multi-sourcing) to ensure maximum resilience. We regularly conduct supply chain maturity/risk assessments, run geopolitical risk scenarios, derive potential optimization strategies and develop collaborative cooperation models along the supply chain.

As for most industries, the A&D industry is challenged and enabled to grow by digitizing operations. Changing customer demands, complex supply chains and constant cost pressure are still major challenges. Meanwhile, the potential to optimize time to market, operations, decision-making or service offerings through digitalization is increasing due to innovative technologies and simplified data availability. In order to stay competitive, companies face the task of identifying key use cases such as smart factory, autonomous solutions, cloud computing, digital twins, process automation or predictive maintenance to drive the required digital transformation. Strategy& supports clients with proven approaches and tools along the entire process, from a digital readiness assessment to defining a digital strategy to selecting and executing relevant use cases.

Environmental challenges and changing public perception are the two key factors that drive the importance of ESG across the entire A&D industry, including the public side. It is essential to identify the right levers to generate meaningful environmental and social impact (e.g., Net Zero and employee diversity), comply with all regulations (e.g., EU taxonomy) and, at the same time, maintain and further build a strong competitive position. With our proven approach we support clients in the private and public sector by guiding them through initial ESG ambition and KPI setting, maturity assessments, identifying optimization potential in operations and supply chain, and developing and implementing holistic ESG strategies, including communication and reporting.

Priorities for COOs in the automotive industry

The growing demand for smart and electric vehicles significantly impacts the automotive value chain – particularly as new competitors with technology-driven backgrounds challenge incumbent manufacturers: Rapid innovation is required to offer competitive products. This includes early make-or-buy decisions to secure strategic leadership in future markets and maximize operational synergies. Product development cycles need to be adapted to successfully embed new processes such as battery system assembly or integrated software development. With a deep understanding of technology, operations and transformation, and by applying AI-supported solutions, the automotive operations and strategy team at Strategy& is able to support their clients on these complex challenges.

The automotive industry is facing an unprecedented transformation. Due to changing customer demands, new products are being launched at unparalleled speed. The ramp-up of “gigafactories” and the industrialization of proprietary battery or software technologies are becoming necessary for OEMs to win through in the future. Many suppliers are having trouble in mastering these complex new technologies, putting the supply chain at immanent risk. Ad-hoc damage limitation and problem solving are becoming ever more important for automotive players to survive. Strategy& successfully supports clients in these situations with their proven Extended Enterprise Enablement approach, applying customized AI solutions to further enhance efficient project delivery.

Operations excellence remains a constant imperative for success in the automotive industry, especially as new players from emerging countries are entering Western markets with aggressive pricing strategies. OEMs and suppliers not only need to be operationally efficient; they need to further optimize their cost base and ensure healthy cash-flows to successfully navigate the transformation. It is of utmost importance to cut costs through a capability-driven lens: “Bad costs” (no differentiation from competition) need to be cut aggressively, while “good costs” (differentiating capabilities) need to be protected or even invested in. Strategy& supports clients with proven approaches and tools on all relevant steps along this transformational journey, up to holistic turnaround and restructuring programs, while also leveraging AI to further optimize project results.

Economic shocks, supply chain disruptions, volatile regulatory and political environments and further economic or geopolitical disputes nowadays pose immanent risks of abruptly constraining the standard operations of automotive companies. Bankruptcy and payment default due to economic constraints become an inherent risk, especially for upstream players in the automotive value chain. Operational losses at OEMs due to parts shortages are reflected in massive fallout in production volumes, causing economic distress for the suppliers. Additionally, changes in subsidies and purchasing incentives, particularly for electric vehicles, increase demand volatility. Through advanced planning and partnering methods supported by leading AI solutions, Strategy& ensures long-term supply of critical materials and high finished goods availability, thus creating true resilience.

Today’s businesses must serve all stakeholders - customers, employees, society, and investors. Strategy& believes in the power of business to be a force for good. Our teams engage deeply with clients to analyze their core business models and operations, to create positive economic, social, and environmental impact in ways that are profitable for the long term. Within the operations strategy team, Strategy& offers unique expertise from strategy through to execution, leveraging the regulatory expertise of the PwC network – supporting offerings such as carbon footprint strategy and operational sustainability facilitation for automotive players.

Automotive players are facing high pressure to cut costs, to increase speed of innovation, and to ensure adaptability. They need to find ways to implement revolutionary thinking in their existing organizations and carefully manage transformations triggered by factors such as the increasing application of AI or an aging workforce. This requires the organizational capabilities to cope with constant change and disruption. Operational agility and people behavior need to be supported by sound workforce management. Strategy& supports this process as mediator and enabler, providing a comprehensive outside-in perspective as well as a trusted environment for experimenting, for hands-on support building and for connecting the capabilities required for future-proof workforce management.

Priorities for COOs in the energy, utilities, and resources industry

Expanding and modernizing the power grid infrastructure is essential to accommodate renewable energy integration, improve reliability, and enable smart grid capabilities. This involves investing in advanced monitoring systems, energy storage solutions, and grid management technologies to enhance efficiency and resilience, while ensuring seamless integration of distributed energy resources. We support you in the strategic planning of investments and the effective integration of cutting-edge technologies into existing infrastructures.

Exploring new revenue avenues is vital for tapping into growth potential. This includes new energy services, customer-specific renewable energy solutions, energy storage offerings, electric vehicle infrastructure, and flexibility services. By diversifying beyond traditional electricity sales, companies can offer value-added services, and capitalize on the transition to a sustainable energy system. We help our clients in developing future-ready business models and systematically exploring new market opportunities.

Investing in renewable energy sources such as solar, wind, and hydropower, alongside energy storage solutions is crucial for achieving sustainability goals. Collaborating with governments, industry partners, and research institutions fosters the development of innovative technologies and policies that promote clean energy adoption, reduce reliance on fossil fuels, and ensure reliable and affordable energy supply. We support you in identifying key areas of action, prioritizing initiatives, and strategically planning to achieve your decarbonization goals in an economically and ecologically sustainable way.

For many industrial companies, sustainable and robust energy strategies are a vital component of corporate management. This includes strategic electricity procurement, focused on sustainability, reliability, and cost-effectiveness. We assist companies in developing tailored procurement strategies, providing accurate forecasts and comprehensive risk analyses. Additionally, we promote the integration of flexibility solutions to enhance energy efficiency and sustainably boost competitiveness. Our approach considers both procurement and investment in on-site generation and storage solutions to achieve optimal energy supply.

Data centers are among the most energy-intensive infrastructures, requiring a reliable energy supply that aligns with climate goals and complies with the Energy Efficiency Act. Decision-makers face the challenge of reducing grid dependency, necessitating a shift towards on-site generation alternatives that come with various regulatory and operational hurdles. We offer targeted support in selecting and implementing the most effective energy solutions through our extensive network and comprehensive expertise from numerous international projects. Using proven assessment methods, we develop and implement sustainable, reliable, and economical energy strategies for data centers.

Priorities for COOs in the finance industry

In an era where customer preferences are rapidly evolving, financial services firms must prioritize reshaping the customer and sales partner experience. This entails deploying innovative service models and digital solutions to meet and exceed expectations. Tailored customer journeys, powered by advanced analytics and personalized touchpoints, are essential for securing competitive advantage and fostering long-term loyalty.

The focus shifts to refining the operational blueprint to align seamlessly with business objectives. This strategic evolution involves a holistic review and optimization of organizational processes, embracing agile and lean methodologies. The objective is to drive operational excellence, ensuring agility and resilience in a dynamic business environment.

A comprehensive review of the operational value chain is imperative. This includes identifying areas for process enhancement, cost reduction, and efficiency gains. Concurrently, the strategic exploration of outsourcing and partnership opportunities is crucial for leveraging external expertise and innovation, thus enhancing core operational capabilities.

Legacy modernization is essential for insurance COOs, focusing on replacing outdated systems with advanced, scalable platforms. With an emphasis on cloud computing and data analytics, this shift not only boosts efficiency but also facilitates collaborations with third parties. This modernization is crucial for adapting to market changes and enhancing customer responsiveness, marking a significant shift in the operational approach of insurance companies.

Digital transformation transcends mere technology adoption, representing a fundamental shift in how financial services firms operate and deliver value. The focus is on harnessing emerging technologies such as AI, machine learning, business process management, and advanced analytics to streamline processes, enhance customer service, and unlock new avenues for growth. Embracing these technologies is no longer optional, but a strategic imperative for staying relevant in a digitally-dominated future.

In the quest for operational excellence, performance management takes center stage. This involves establishing robust frameworks that utilize data-driven insights to steer operations using informed decision-making. Key performance indicators and metrics should be redefined to capture real-time operational efficiency, employee productivity, and customer satisfaction, facilitating a culture of continuous improvement and excellence.

The talent landscape in the financial services sector is undergoing rapid transformation. COOs must prioritize developing a workforce that is not only skilled in contemporary digital tools, but also aligned with the principles of Environmental, Social, and Governance (ESG) practices. This encompasses fostering a culture of lifelong learning, inclusivity, and sustainability, ensuring the workforce is equipped to meet current and future challenges.

Agility in the workforce is increasingly vital in the fluid business landscape. This requires cultivating a culture that values adaptability and innovation. COOs must champion new collaboration models that encourage cross-functional teamwork and leverage digital communication tools. Transforming the work culture to be more agile and collaborative enables insurance companies to swiftly respond to market trends and drive ongoing growth.

Priorities for COOs in the retail and consumer industry

Strategic planning and E2E collaboration become increasingly crucial for success in the competitive retail and consumer goods industry. To achieve this, companies must adopt a strategy-linked planning approach that aligns supply chain planning with a company’s long-term goals and objectives. This requires a closely connected, cross-functional planning ecosystem involving suppliers, distributors, and retailers for optimum communication and collaboration. Companies need real-time visibility throughout their supply chain operations to identify inefficiencies and improve overall performance. Transparency and accountability are vital components of strategy-linked planning. Also, Integrated Business Planning (IBP) is critical, as it integrates all business processes and functions into a cohesive plan, aligning supply chain planning with financial objectives. We implement strategy-linked planning and help to improve supply chain performance, optimize inventory levels, reduce costs, increase customer satisfaction and support sustainability goals.

The retail and consumer goods industry is experiencing significant changes driven by the rise of e-commerce, shifting consumer expectations and unstable supply and demand. Sustainable products, an omnichannel environment and D2C sales are now the norm and require a rethinking of today’s supply chains. To keep up with these changes, dynamic supply chains are becoming crucial: Not only can dynamic supply chain segmentation increase resilience by handling smaller product batches, managing rapid changes in demand, and reacting to supply shortages, but it also enables balancing cost, service level, and sustainability. We engage in close collaboration with our retail and FMCG clients to perform comprehensive supply chain assessments, analyze dynamic segmentation scenarios, and identify actionable steps to enable the development and implementation of a dynamic supply chain.

In today's fast-paced retail and consumer goods industry, supply chains have become increasingly complex due to ever-changing customer demands, constant cost pressure, and the growing emphasis on sustainability. To remain competitive, companies must prioritize supply chain visibility, resilience, and collaboration. By utilizing digital technologies and real-time data analytics, companies can achieve greater transparency and traceability throughout their supply chains, enabling them to quickly identify and address potential disruptions and improve decision-making. By seeking partnerships up- and downstream in the supply chain, companies can improve internal and external efficiency, reduce costs, and optimize time to market. We have proven approaches and tools to support our clients along the entire process, from a digital readiness assessment to defining a digital operations strategy and selecting and implementing relevant use cases and software solutions.

In an ever-changing environment, workforce resilience is key to maintaining a successful and efficient supply chain. Organizations must not only ensure that its people adopt end-to-end thinking, but also encourage and enable them to work in a flexible and open-minded way. A digital way of working provides employees with tools to be agile and adaptable, including cloud-based platforms for remote work, real-time data analytics and mostly automated processes to reduce errors and delays. Making change the new standard and embedding agility and adaptability in the core of the organization is one way to build workforce resilience. However, achieving this requires hard work and commitment from every organizational member. With our proven approach for operating model design and holistic change management support, we are able to transform your organization and build a resilient workforce for your future operations.

Priorities for COOs in the pharma life sciences industry

How do I best serve my place in the market? We support you in shaping the future supply ecosystem to master bi-directional supply chains, meet unique process needs, and ensure timely market entry. The manufacturing and distribution footprint is a key element in this. Improve and leverage the production network to manage fast-changing customer needs and shifts in demand, avoid supply interruptions, and enable growth. Additionally, in the light of external dynamics and internal portfolio changes, it is vital to develop a resilient and sustainable supply chain strategy, to ensure long-term supply security. Matching this, PharmaCos are starting to re-define their capability and capacity ambitions, with the potential to offer idle capacities to the market.

What capabilities do I need to operate successfully? We support you in developing best-in-class CMC, technology transfer and launching capabilities to ensure timely and successful market entry and product scaling. The key to this is to prioritize and evolve applied manufacturing technologies and processes to the next level, to stay competitive in a cost-driven market. Digitization of operations processes has been a focus area lacking full deployment for almost two decades, but with the rise of AI, it needs to be fully integrated into the overall strategic vision across functions. Particularly with regard to new modalities, underlying technology requirements define the operations strategy including make-or-buy decisions, priority technology investments, and risk mitigation measures. Overall, we observe far more integrated R&D operationalization – staying on top of a rapidly-changing ecosystem by combining best-in-class practices, strategic partnerships, and high-performing operating models.

How can I transform existing operations? We support you in business-led restructuring: Exploit technological advancements to improve business processes, enable new product offerings, and upgrade and upskill digital operations, while ensuring that decisions are based on present business requirements. Overall, competition in operations is rising due to various market dynamics. Enabled through agile task forces, successful PharmaCos are setting a bold vision to stay competitive, while regularly pressure-testing overall performance. Additionally, we consistently support other transformation journeys such as integration and deal value creation programs, or sustainability and ESG restructuring. Nowadays, corporate transformation is likely to be driven by regulatory changes, while differentiators can be established given the increasing sensibility for environmental concerns.

Priorities for COOs in the transport and logistic industry

With rising expectations around visibility, service usability and responsiveness, a unique customer experience becomes the competitive edge in the logistics industry. Those companies that excel in experience management are rewarded with higher customer loyalty, positive recommendations, increased market share and overall higher profitability. Achieving a unique customer experience requires a clear understanding of the customer journey and its “moments of truth” to set yourself apart. How technology can support a superior experience, how to equip your customer service staff to provide timely and accurate information across channels, and how to effectively deploy automation and self-service offerings are the questions top of mind for executives. We support clients with proven approaches and tools to make their experience management best in class.

While the intensity of M&A activity and partnerships in the T&L industry has fluctuated over recent years, they are an undisputed industry driver. Investment in strategic services to advance end-to-end service offerings, capability build-out, and increasing interest from financial investors are having a lasting impact on the dynamics of competition. Pursuing a targeted M&A and partnership roadmap while constantly screening the market for opportunities needs to be high on the T&L agenda. With E2E deals services, we support corporate and private equity T&L customers from pre-deal and due diligence to value creation and divestments.

The operating model breathes life into your strategy and is key to translating concepts into action. How to design efficient processes and establish an organizational structure that best supports agility, and which governance mechanisms to build around it, are just some of the top-of-mind questions for T&L players. The operating model is the engine behind (digital) transformation and must be aligned to all elements of your strategy to enable cost efficiency while delivering rigorously on quality promises. With a successful track record in operating model design, Strategy& is committed to your success.

Transport and Logistics enterprises have to undergo major digital transformations to stay competitive and respond to increasing digitalization of business models and processes. A long time since the first digital forwarders entered the competitive game, only a few players have fundamentally transformed their business model towards digital. But the momentum is changing. Today, moving to the cloud is no longer a question of “if” but “how” and “by when”; an abundance of use cases from AI-enabled dynamic pricing to digital twins for supply chain control promise tangible benefits. Navigating through the complexities and cultural change of a digital transformation while distinguishing tempting trends from those with actual business cases are key capabilities in a fast-paced environment. Our team supports clients in designing targeted digital, tech, and data strategies for lasting competitive advantage.

The transport and logistics industry needs to respond to a diverse set of stakeholder demands. Shareholders are stepping up pressure on T&L companies on sustainability and climate protection, giving weight to ESG criteria in their investment decisions. The social and environmental responsibility of a company is also key for employees in their job choice, and logistics players need to provide transparency on working conditions along their multi-tiered supply chains. On the customer side, the demand for sustainable solutions is increasing while countries have reaffirmed the Paris Agreement to pursue efforts to limit warming to 1.5° Celsius, along with net-zero commitments. We support T&L companies in balancing this complex set of stakeholder demands when defining an ambitious yet realistic sustainability strategy with a bold vision for a sustainable future.

Change management is not simply a worn-out buzzword, it is the means to an end in projects if done properly and holistically. While the importance of people dynamics is recognized by the vast majority of executives, it needs to be manifested in a dedicated and integrated change management approach, combining change and project expertise, to yield its full impact. From making your employees join the movement, making them understand and develop their own role in the process to upskilling and keeping them engaged – a consistent employee enablement experience has to be built.

Management Engineers

Management Engineers was acquired and integrated into Strategy& (formerly Booz & Company) in 2013. The company's experts are characterized by their in-depth technical know-how in all functions and industries of the manufacturing sector, such as automotive and mechanical engineering, as well as their focus on implementation consulting and expertise in operations.

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Axel Borowski

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