Executive Briefings

How Procurement Innovation Can Drive Productivity Gains

Innovation is required if the U.S. is to regain the level of productivity that it enjoyed toward the end of the 19th Century through the mid-20th Century. However, innovation by itself is not enough. Just as our parents and grandparents adopted electricity, the automobile, credit cards and airplanes in the period from 1870-1950, businesses and organizations of the 21st Century must embrace change.

This is one of the conclusions of the McKinsey Global Institute Report on Productivity, prepared by McKinsey & Company in February 2011. "U. S. infrastructure is not only inadequate to meet the needs of a dynamic, growing, and productive economy, but its quality has been in relative decline. The U.S. today ranks 23rd (among worldwide economies) in the quality of its infrastructure. There is major scope for the U.S. to identify and implement leading-edge practices from project selection to financing and delivery, sometimes through public-private partnerships," the report stated.

An area that is singled out by McKinsey as a potential significant contributor to greater productivity is the implementation of business and technology innovations that will improve supply-chain integration and how goods and services are provided to customers. Integral to this are best procurement practices.

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Keywords: supply chain supply chain management, supply chain best practices, procurement best practices

This is one of the conclusions of the McKinsey Global Institute Report on Productivity, prepared by McKinsey & Company in February 2011. "U. S. infrastructure is not only inadequate to meet the needs of a dynamic, growing, and productive economy, but its quality has been in relative decline. The U.S. today ranks 23rd (among worldwide economies) in the quality of its infrastructure. There is major scope for the U.S. to identify and implement leading-edge practices from project selection to financing and delivery, sometimes through public-private partnerships," the report stated.

An area that is singled out by McKinsey as a potential significant contributor to greater productivity is the implementation of business and technology innovations that will improve supply-chain integration and how goods and services are provided to customers. Integral to this are best procurement practices.

Read Full Article


Keywords: supply chain supply chain management, supply chain best practices, procurement best practices