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B. Alignment of brewery, bottling and shipping productivity:
We plan spending to US$ 120 million (BAC1) over 4 years on Business Process Re-engineering

(BRP), including Enterprise Resource Planning (ERP), to better synchronise, operations,
outbound logistics, marketing and sales as well as customer service, thereby reducing the cycle
time between brewery, bottling and shipping. This is envisaged to deliver 69% (our biggest)

cost synergies (BAC2) of US$6,801.6 million over 4 years. By the mid-way point, this
activity/project is forecast to be behind schedule by 75% (3 years), and overrunning its costs by
67% (on both integration and synergies). This is likely to arise from recent revisions from the

strategic consulting firm as well as the SAP (the German Software firm) who were to implement
the BRP and the ERP aspects having revised their cost estimates and their availability, noting

considerable uncertainty as to whether and when the deal would close for them to commence
work!

C. Staff cost management, best practice sharing and efficiency improvements:
We plan to spend US$ 70 million (BAC1) over 4 years on a Strategic Head Count Reduction and

Retrenchment Programme (SHCRRP). This is envisaged to deliver cost synergies (BAC2) of
US$1,792 million over 4 years. By the mid-way point, this activity/project is forecast to ahead of
schedule by 14% and under cost by 6%. Given that this is an issue the trade unions have raised,

raised, it is intriguing how this will be achieved as we expect unions to resist any job cuts (Trade
unions are ‘Keep satisfied’ in our Stakeholder Analysis –Appendix 2).

The aim of the SHCRRP is not simply to find cost synergies, but to improve efficiency. The
proposal to cut 3200 jobs (400 from each of the 8 divisions) will lead to cost reductions in the

shorter-term, but could potentially cause inefficiencies and cost increases in the long-term.
Preference for choosing employees over the age of 50 who are earning higher salaries seems to
be driven purely by short-term cost savings and likely to be considered unfair and/or illegal (on

grounds of age discrimination) as there is no reference to the value each employee contributes
to overall efficiency. The 400 per Division will have a disproportionate impact on smaller divisions.

Furthermore, Divisional Managers could feel very uncomfortable having to make decisions to
retrench their staff, which could adversely impact their motivation; and could select people for
redundancies according to their own personal preferences. In effect, the whole process could

become subjective and biased; lacking the strategic focus it deserves.

D. HQ/regional office costs

We plan to spend US$ 20 million (BAC1) on collapsing the SABMiller corporate office in London
into our HQ in Brussels, saving US$299.2 million (BAC2) over 4 years. By the mid-way point, this
Developed by The CharterQuest Institute for 'The CFO Business Case Study Competition 2018'
www.charterquest.co.za | Email: thecfo@charterquest.co.za