Integrated Annual Report 2023 2 3 4 5 6 7 8 9 1 43 FINANCIAL REVIEW ENHANCING OUR OPERATIONAL RESILIENCE THROUGH COST OPTIMISATION In the pursuit of financial excellence and operational resilience, the past fiscal years witnessed our organisation taking significant strides towards cost optimisation, underlining our commitment to sustainable growth amidst prevailing market challenges. The collective efforts across the Group yielded impressive results, with an additional RM29.9 million in savings for 2023 alone. This brings our total savings over the past three years to RM81.8 million (2021 to 2023), showcasing our commitment to efficiency and cost optimisation. This achievement marks an 82% progression towards our EoTF2025 goal of RM100 million in cost savings over five years, a testament to our strategic and diligent approach to financial stewardship. STRATEGIC COST OPTIMISATION INITIATIVES Our cost optimisation journey has continued at an unrelenting pace, underpinned by several key initiatives: Procurement Excellence: Our procurement initiatives stand as a cornerstone of our cost-saving strategies. Under the “Spend Refresh” programme, we have developed comprehensive spend reports and analysis, offering profound insights and identifying significant improvement opportunities in procurement spend. A notable example includes consolidating the purchasing of paper products across all business units, leveraging our collective demand to enhance purchasing power and achieve substantial cost reductions. Furthermore, the continuation of our Supplier Financing Programme in collaboration with HSBC Amanah Malaysia Berhad, alongside the Strategic Vendors Management Programme, which commemorated during our inaugural Vendor’s Day on 5 October 2023, has been pivotal in nurturing long-term vendor relationships, ensuring service excellence, enhancing delivery schedules and achieving cost efficiencies through rate reductions and sourcing efficiencies. Innovative Treasury Management: The establishment of the Treasury Management Centre (“TMC”) signifies a major leap towards optimising our financial resources. Serving as an inhouse bank, the TMC facilitates the consolidation of surplus funds to provide working capital support to subsidiaries that require it, thereby enhancing cash management efficiency across the Group and minimising external financing costs. The phased implementation of the Treasury Management System (“TMS”), with Phase 1 successfully going live on 8 November 2023 and Phase 2 scheduled for roll out in the second quarter of 2024, is poised to further automate and refine treasury operations. The completion of this initiative in 2024 is expected to streamline processes, facilitating the adoption of Treasury Pooling and establishing an in-house bank at UEM Edgenta. Organisational and Operational Efficiency: A key focus has been on refining our organisational structure to ensure it meets our current needs. This involves streamlining work processes and right-sizing manpower to align with our strategic objectives and operational requirements, resulting in costs reductions without compromising efficiency or service quality. In addition to ongoing efforts to identify cost efficiency opportunities across our operations through our LEAN programme, we have maintained our initiatives in digitalisation, mechanisation, and automation. These efforts have led to more efficient processes and enabled us to achieve greater cost savings. Through the adoption of digital tools and automation, we continued to optimise our operational processes, enhanced resource allocation and improved service delivery.
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