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Data-driven profit improvement

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.

Our approach

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.

Our approach in practice

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.

operational restructuring

Why KPMG?

  • Our findings are shaped by our innovative methodology and cutting-edge data analytics tools.
  • We have undertaken diagnostic work across a range of sectors.
  • We are honest and upfront- we challenge management and expect to be challenged in return

Estates optimisation

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:

  • Rapid assessment of key profit and cost areas to allow prioritisation of focus with drilldown and benchmarking functionality
  • Real-time scenario analysis, allowing assumptions to be user-adjusted
  • Geospatial analytics e.g. proximity to customer base, competitors, travel time etc.
  • Combining a range of metrics to include quantitative and qualitative considerations e.g. key personnel, reputation issues and workplace environment and accessibility

Adapting your estate to a changing business environment can include considerations such as:

Legacy estate Change drivers Future requirements
  • Historic overlaps
  • Not designed for modern operations
  • Expensive to run
  • Maintainance backlogs
  • Underexploited high value locations
  • Under capacity
  • Ways of working (COVID led)
  • Business rates
  • Rents and land values
  • Digitalisation
  • B2C demand e.g. same-day delivery
  • Changing demographics
  • Fewer, smaller or more sustainable
  • Lower running cost
  • Technology-enabled
  • Smart geographical coverage
  • Ownership model
  • Flexible workforces

 

Why choose KPMG?

  • Commercial business case optimisation – acute understanding of business case and savings drivers.
  • Wide transformation experience – of which estates is often a key component.
  • Pragmatic and implementation focussed – from assessment to detailed planning to implementation.
  • Spanning across all sectors – experienced professionals who can tailor approach to all organisations
  • Tech driven – Multiple apps, tools and models already developed.

 

Insights

 

 

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.

Craig Masters, Associate Partner

Economic strategy review

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.

What we do

  • Independently compile robust and tailored information to support decision making.
  • Provide frameworks to assess complex drivers and dynamics including markets, customers, competitors and capabilities.​
  • Facilitate strategy workshops with senior team to build consensus and develop implementable strategies.​

Why KPMG?

  • We provide clear and balanced options, consider key issues and identify solutions that stick 
  • We act with independence, sensitivity and objectivity to help mitigate unconscious bias which can create delays and value leakage 
  • We can draw upon a breadth of situational, sector and geographical expertise from the KPMG network.​
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