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"...and pretty soon," U.S. Senator Everett Dirksen famously remarked, "it adds up to real money."
These days, descriptions of swingfor-the-fences industry transformations are frequently preceded by "digital." To those of you who wistfully recall the days when the word referred to your fingers, get used to it.
In pursuit of billions saved or earned, digital technologies are the most powerful levers in the corporate conex box. Richard Ward, senior expert, McKinsey & Company, presents examples in three areas where they could have a billion-dollar impact.
Finding $1 billion in the supply chain. Historically, fictional AB Oil Co. has made a vast number of design, procurement and operational choices. Valves have been sized and ordered, casing-team contracts awarded, and orders for cement placed, pretty much with the same vendors, in the same way. In the meantime, some vendors were charging less in one field than another; some crews had fewer failures than others; one supplier had lowered the cost of an entire class of suitable products. But AB Oil's engineers never took advantage of any of these opportunities. Why? Because there is too much of this type of information: there are too many dynamic variables, in too many places, for any single person to know everything, or enough to make optimal decisions. It is too much even for a team of professionals dedicated...