Project Arctic
Project Blackhawk
Project Delta
The issue. Reed Elsevier Philippines wanted its performance read against other shared-service providers. Internal improvement was not the question. The question was whether labor, facilities, and operating cost were out of line with the market, and what that was doing to gross margin and operating margin.
The questions.
How does manpower cost compare, level by level, with other shared-service providers?
Where do gross margin and operating margin sit against those peers, and what is driving the gap?
What can be taken out of operating expense, based on how comparable centers actually run?
The outcome. Price and cost structures were benchmarked against similar and competing centers in the Philippines. Labor, facilities, and operating expenditure were traced into gross margin and operating margin, so the gap had a cause. Reed Elsevier left with a baseline it could use to plan growth and investment: where the center was expensive, where it was not, and what a further peso of capacity should be expected to earn.
The issue. Lafarge Philippines wanted the optimal way to allocate shared-service cost across the P&L. The center existed. The question was which costs are fixed, which move with volume, and which allocation makes a plant or a business unit accountable without pretending every peso is variable.
The questions.
How do shared-service operations in other industries push cost to internal clients, and which of those methods survive contact with a real P&L?
What allocation fits a cement shared-services model, rather than a generic corporate center?
The outcome. Cost-allocation methods and the relative cost of operations were benchmarked across a sample that was deliberately not one industry: building materials, retail, energy, knowledge-process outsourcing, healthcare, financial services, and non-profits. The range was the point. Lafarge could see which methods were habits and which were fit for purpose, then set the appropriate treatment of fixed and variable cost on its own P&L.
The issue. Lafarge was collapsing several shared-service hubs into one location in the Philippines and standing up a regional operating headquarters. Shutdown expenses across Southeast Asia, and the one-time lift-and-shift cost of the move, had to be allocated to internal clients.
The questions.
How should one-time expenses be allocated to internal clients, so the charge reflects the reorganization rather than the convenience of the center?
How should lift-and-shift cost be spread across regional business units, without turning a setup into a permanent tax?
The outcome. A fairness opinion was given on the shutdown costs across the Southeast Asian region and on the setup costs of the Philippine operation. The allocation that resulted was more realistic than a head-office residual. Lafarge could ramp the shared-services regional headquarters with a charge the units could see, and a split that matched who was being shut and who was being served.
Project Francis
The issue. Havi Logistics needed a geographic assessment for its Asia regional shared-service center, and a consolidation plan that could survive the choice. Two countries were in contention. A location picked on wage rates alone discovers its real cost in attrition and rework.
The questions.
What criteria should decide a shared-service location, once cost is no longer allowed to outvote quality?
How does Malaysia compare with the Philippines on labor quality, availability, productivity, infrastructure, and operating cost?
Given Havi’s own requirements, which site is the one that stays efficient after it is staffed?
The outcome. Six locations in the two countries were assessed on the same facts: labor quality, availability, productivity, and operating cost. The consolidation plan was judged against that comparison, not against a headquarters preference. Havi decided on a site that was cost-efficient and high-performing at the same time. The cheaper city that could not staff the work did not win on price.