PPC's profit improvement programme (PIP)

PPC embarked on its change management programme #IGNITE in May 2015. This umbrella project focused on providing the strategy, plans and leadership needed to transform PPC into more than just a cement company. One of the focus areas was profit improvement.

PIP value proposition

The programme was designed to:

  • Deliver short-term reliable results
  • Drive cultural and behavioural change
  • Support strategic positioning of businesses in the group
  • Deliver sustainable solutions for long-term value creation
Successful implementation and execution

PIP has met its target of delivering R400 million in sustainable savings in a much shorter period than expected. The bulk of the savings came from cost efficiencies, with the remaining improvements coming from revenue enhancements and cost reductions. Notably, this came at negligible expense to the company.

Case study – SA Cement logistics

Logistics savings have been a major contributor to our cost-efficiency drive. In 2015, PPC embarked on an in-depth analysis of outbound logistics, as this is one of our largest cost drivers. This was to ensure that PPC was operating at optimal levels, using best-practice benchmarks while maintaining customer service excellence. This process was completed in conjunction with independent consultants and PPC's transport management system service provider. During the project, PPC was able to achieve significant cost savings by reducing the contract fleet and optimising ad hoc transporter costs.

This process culminated in PPC going out to tender in 2016 using a new logistics costing model with commercial enhancements for the contract fleet. Transport contracts were awarded to two transporters in March 2017. The new agreements will ensure PPC is able to better manage its outbound logistics cost base, with lower logistics input costs in future.

Logistics cost
Last reporting period

PPC believes the success of the programme was attributable to mobilising employees across the business to manage the PIP process. While there have been tangible monetary benefits, the positive cultural shift has been a marked one. This has been key to the sustainability and success of the programme. We will no longer be reporting on PIP, but we will continue to monitor and track benefits internally.

Assurance from internal audit

To ensure the integrity of PIP, we have incorporated an internal audit process for objective assurance and independent insight into its effectiveness.