What is the role of the corporate centre?
Companies are in a state of perpetual structural flux, resulting in the increased need for engagement on organisational redesign. As part of those organisational design decisions, determining which role the corporate centre should play can add significant value to an organisation. This must be balanced against the risk that the consequence of the centre playing the wrong role can be dire and lead to negative and sustained impact on the bottom-line. The corporate centre does not have to select a single role to apply uniformly across all business units or functions. It should instead select the role that matches the organisation’s unique situation and will generate the most value. We look at the how a corporate centre can adapt the role it plays across various business functions.Click here for more details
Foresight from hindsight
In a working environment where job tenures average around five years to 10 years, the likelihood of losing experience is high. Without that experience, it is more difficult to ensure better judgement in decisions. The value of applying good judgement early in projects will always vastly outweigh the benefit of doing so later on or not at all. Companies can only guarantee future benefits from past experiences if they: Embrace a culture of learning from those experiences, have a framework for formalising the process and the correct systems in place to support this process.Click here for more details
The next shock for Australian eCommerce senders and logistics providers
Amazon has not only disrupted the retail world but also sought to take on any industry it relied on in conducting its business. Jeff Bezos has a modern approach to vertically integrating companies. He harnesses the cost-saving benefits while minimising the pitfalls of internal complacency that in the past have eroded the increased margins typically sought through creating these structures. By creating an external customer offering in each of the industries in which it vertically integrates itself, Amazon has converted some of its largest expense line items into revenue generating assets while ensuring it continues to provide superior service levels. Having created external markets for computing and fulfilment - is logistics next?Click here for more details
Are parcel businesses ready for a move to dynamic pricing?
In parcel businesses, the industry standard pricing mechanism is a combination of urgency of delivery, distance and weight. While demand for priority deliveries and the mix of distance to be moved remains fairly constant, year-on-year decline in weight has exposed parcel businesses to falling revenue and profitability. This is because the cost incurred in moving a 2kg parcel and a 20kg parcel between the same locations is roughly the same, but the revenue earned from the lighter parcel will be much lower. In addition to lighter consignments earning less revenue they can still consume similar amounts of asset capacity to heavier freight. Space used by light weight consignments in depots and warehouses, on linehaul trucks and in pickup and delivery vehicles is not available for other parcels. So parcel businesses are doing the same amount of work with the same asset base, all while revenue declines. How can parcel businesses protect against the continuation of this trend? Before investigating solutions, it is worthwhile examining the industry standards.Click here for more details
Does discounting improve profits in the retail fashion industry?
Australian retailers follow aggressive promotional calendars throughout the financial year – Easter sales, end of financial sales, mid-season sales and culminating in the biggest sales event of the year – the Boxing Day sales. Sales of up to 50% off of retail price are not uncommon, especially towards the end of a season. This leads us to ask a few questions: What is the goal of discounts? Are they used to drive volume or are they used to create a perception of value through price anchoring? Do discounts succeed in attracting incremental sales and do they attract enough incremental sales to make the discounting worthwhile? Are discounting strategies being applied with precision to achieve specific desired outcomes, or are they being used as a blunt instrument to bump up a revenue number? Are the buying public being conditioned into waiting for discounts before making purchases? Do these discounts and promotions improve profits or erode value?Click here for more details
What does 3D printing mean for Australian business?
In the late 1700s, the industrial revolution brought about a fundamental change to the manufacturing industry. The industry received another boost in the early 1900s when Ford adopted the concept of the assembly line in his factory and helped kick off the era of mass production. In order to mitigate the impact of rising labour costs in the developed world, the practice of outsourcing had gained traction and by the 1970s, many consumer electronics products were being manufactured overseas. All these movements had the impact of reducing the unit cost of each widget produced. They also introduced some constraints and challenges to the manufacturing model. Supply chains became longer and more complex, often spanning multiple countries and time zones. Holding costs increased as mass production only achieves economies of scale if there is scale. Lead times become long as the raw materials, manufacture and final customer may be oceans apart. And finally customisation is the enemy of mass production, as Ford himself famously said: “Any colour…so long as it is black”. 3D Printing is looking set to be the next wave of disruption in manufacturing, engineering and design. Turning the old model of supply chains upside down, disturbing the designer’s value chain and giving just about anyone the opportunity to be a manufacturer. What does 3D printing mean for Australian business?Click here for more details
Structural Changes in the Funds Market
There has been a lot of recent discussion about the Australian economy and its performance on the global landscape. There is no doubt that Australia has been the lucky country in comparison to other developed countries. The question is however how well the Australian economy is geared for future growth and what initiatives business leaders should consider to position Australia for the challenges and opportunities that lie ahead?Click here for more details
Ten Initiatives for the Future of Australia's Economy
There has been a lot of recent discussion about the Australian economy and its performance on the global landscape. There is no doubt that Australia has been "the lucky country" in comparison to other developed countries. But the question is how well is the Australian economy geared for future growth and what initiatives should business leaders consider to position Australia for the challenges and opportunities that lie ahead?Click here for more details
How do we get ready for a dimensional profitability model?
Most freight and logistics companies know the importance of understanding the profitability of their products, customers, and operations at a granular level. There’s good reason for this. Freight and logistics companies know that size and complexity of their customer base and operations provides ample opportunities for inefficiencies and unprofitability to hide. Our work at PCG with hundreds of companies across logistics and other sectors has helped them navigate the road to a granular understanding of profitability, and shown them how to use these insights to significantly increase revenue and yield, reduce costs, and improve productivity. Many of our clients have witnessed the power of the virtuous cycle from a DPM process. Having directed or supported DPM engagements of all kinds, including turning around those endeavours that have stalled, PCG has identified many of the reasons why some profit model projects deliver significant results and others fail to make an impact. We have codified these learnings into an end-to-end DPM process.Click here for more details