McKinsey buys consulting firm SCM Connections to help clients make supply chain transformations

The management consulting firm McKinsey and Co. Inc. says its acquisition last week of SCM Connections will strengthen its expertise in advising client companies on their end-to-end supply chain planning transformations.

McKinsey on November 2 bought SCM Connections, a 12-year-old, Chicago-based consultancy that provides technology-enabled supply chain planning and analytics through Advanced Planning and Scheduling (APS) software. SCM says that tools like supply optimization, multi-echelon inventory optimization, and advanced demand forecasting algorithms can help its clients gain long-term advantages over their competition.

McKinsey said it would supplement that offering with its McKinsey Digital capabilities, creating a service that can solve supply chain problems with the help of advanced analytics and artificial intelligence (AI), helping clients to expand their supply chain capabilities.

According to the company, the time was right to make the acquisition because the need for effective supply chain management and planning has never been greater, due to ongoing factors such as the covid pandemic, geopolitical tensions, labor shortages, and broad economic uncertainty.

"Global supply chain issues are increasingly complex and volatile supply chains are forcing companies to modernize the tools they use for forecasting demand and planning supply and inventory to meet it," Daniel Swan, senior partner and global co-convenor of McKinsey & Company's Operations Practice, said in a release. "Today, we are in a new age of supply chain management where advanced planning capabilities are king and digital innovation builds the bridge to resilience. With this acquisition, we will be able to help our clients embed a full, end-to-end technology-enabled supply chain planning approach to fuel long-term growth and build resilience."