Today more than ever, businesses are operating with unprecedented levels of complexity in their product and customer portfolios but lack a detailed understanding of where profit is made and lost.
KPMG’s data-driven profit improvement offering helps businesses to pinpoint the areas in which they should invest and grow, or perhaps divest or terminate, by analysing transactional level sales, cost and working capital data.
We start from the basic premise that overall profitability is the accumulation of profit from individual transactions. This may include the sale of thousands of different products to hundreds of customers through various routes to market from and with multiple supply chain variations.
Each transaction rarely makes the same level of profitability. By analysing profit on a transaction by transaction basis, we can provide management teams with deep insight into where profit is made and lost. From this basis, we can then identify actions businesses should take to increase profit and reduce operational complexity.
Take three identical products. Whilst one may be sold directly to the customer, another may be distributed via one or more intermediaries and another have additional manufacturing steps to adhere to local requirements.
In most company MI, these sales are aggregated which may demonstrate an acceptable return (Example 1). Yet this reporting can obscure many low-profit or loss-making transactions. Our approach (Example 2) can undertake this exercise across thousands of product lines to improve overall company profitability. As shown in example 3, we focus our efforts on helping you eliminate hidden losses.
Our toolkit and expertise is supporting organisations of all shapes and sizes to reassess their estate portfolio against a background of rising overheads, changing consumer and employee demands and wider technological change.
With estates the second largest cost for many businesses, even a small percentage increase in property overheads can present a significant threat to business profitability.
KPMG have a tried and tested range of advanced analytical tools to rapidly assess your estate, highlighting where you can reduce costs and increase efficiency. We typically help clients make savings of at least 10-15% of their estates costs. Our approach includes:
Adapting your estate to a changing business environment can include considerations such as:
|Legacy estate||Change drivers||Future requirements|
Whether driven by trading decline, cash preservation or performance improvement motivations, organisations of all sizes are now urgently reviewing and resetting their cost base.
Our approach extends beyond discretionary spend controls and explore all forms of direct and indirect costs. To find out more about how we support business improve business performance, click here.
Organisations across many sectors are now looking to optimise their estates in light of rising costs, rapid technological change and changing customer and employee expectations, some of which have been accelerated by COVID-19.
Businesses are operating in an increasingly dynamic external environment. We work with management teams to develop and implement strategies to respond to challenges such as changes in market dynamics, entrance of new competitors or loss of a major customer.