Investment case

Now that we have focused the portfolio on a strong set of business units, we are continuing to evolve our business unit strategies and in doing so we are increasingly reviewing the business models employed by each. Here our objective is always to have the most efficient, lowest cost platform in the industry and to drive continuous improvement by better process management.  

Over the past three years, certain processes and activities (for example strategy review, people development, finance and IT) have already been mandated as common across all business units and we have benefited greatly from this as a Group. In addition, we have ensured that every business unit, and in turn every branch, measures customer service – because we know that high customer service scores correlate to strong financial performance. 

We are now evaluating the best core processes in our most successful business units to see how we can derive further benefits from a more common approach across our business units. For example, we have developed a single platform for business to consumer (“B2C”) internet businesses based on our successful Build.com business in the USA. This year we have successfully deployed this model in the UK and are now evaluating other markets for suitability. In addition, we have now established in all business units a critical level of SKUs (“stock keeping units”) to be maintained in the branch with 100 per cent fill rates – high levels of availability of a wide range of SKUs is critical to our customers’ businesses. While the topSKUs are therefore immediately available in branches, the remaining SKUs are readily available from hubs or distribution centres. Over the medium term we will progressively move to a local service common process business model as we standardise core processes to achieve benefits of scale and productivity – but these will be executed at the right level and location in each business unit.