Two partners · Singapore · Mid-market Southeast Asia

No deck until we understand the business

Aster & Vale does operating-model, pricing and margin work for companies between S$20m and S$400m in revenue. Here is exactly how a first conversation goes.

Read the conversation

A first conversation, more or less verbatim

Reconstructed from a real engagement with the client’s permission. Names changed.

  1. Wei Lin — COO, distribution09:04

    We turned over S$118m last year and made almost nothing. The board wants a cost programme. Can you run one?

  2. Nadia — Aster & Vale09:11

    Probably — but before we agree to that, can I ask three things? What was gross margin five years ago, what is it now, and has your customer mix changed in between?

  3. Wei Lin — COO, distribution09:26

    31% then, 22% now. Mix has moved a lot — we went hard after the big supermarket accounts in 2022.

  4. Nadia — Aster & Vale09:31

    Then a cost programme is likely to be the wrong project. Nine points of gross margin over a mix shift that size is usually a pricing and channel problem, not an overhead problem. Cutting cost will make the P&L look better for two quarters and leave the cause running.

    Here is what I would propose instead as a first step:

    1. Four weeks, two of us, fixed fee. No junior team.
    2. Rebuild profitability by customer and by SKU from your raw invoice lines — not from the management accounts.
    3. Cost-to-serve model including delivery frequency, returns and credit terms.
    4. One session with your board on what to stop selling, and to whom.
  5. Wei Lin — COO, distribution09:40

    Our finance team will say the data is not clean enough for that.

  6. Nadia — Aster & Vale09:44

    It never is, and it does not need to be. We work from invoice lines and delivery manifests, which are messy but true. If your top forty customers are 80% of revenue, we only need those forty to be right, and we can check them by hand in a day.

  7. Wei Lin — COO, distribution09:52

    And if you get four weeks in and find it really is overhead?

  8. Nadia — Aster & Vale09:55

    Then we say so, hand over the model, and you are free to run the cost programme with anyone you like. We would rather be wrong in week four than in month nine.

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What came of it, and three others

Distribution — S$118m revenue, Singapore & Johor

Distribution — S$118m revenue, Singapore & Johor

4 weeks

Margin & channel mix

Eleven of the forty largest accounts were loss-making after cost-to-serve. Repricing and two exits took gross margin from 22% to 27.4% in three quarters.

Contract manufacturer — 1,400 staff, Batam & Penang

Contract manufacturer — 1,400 staff, Batam & Penang

9 weeks

Operating model

Plant managers had accountability for output but not material cost. We redrew the P&L to plant level and rebuilt the weekly operating review. Scrap down 31%.

B2B services roll-up — six acquired agencies

B2B services roll-up — six acquired agencies

12 weeks

Post-merger integration

Stopped a shared-services consolidation that would have broken client relationships, and integrated pricing and utilisation reporting instead. EBITDA +4.1 points.

Regional retailer — 62 stores, Malaysia

Regional retailer — 62 stores, Malaysia

6 weeks

Pricing

Built a zone pricing model and a rule for when a store may discount. Like-for-like gross profit up 9% with no change to footfall.

Since we left the big firms in 2018

47

Engagements delivered

2

Partners on every project

6.2

Average EBITDA points added

68%

Repeat or referred work

How we work, and what it costs

Fixed fee, agreed before we start
A four-week diagnostic is S$68,000. Longer implementation work runs S$52,000 a month for both partners at roughly 60% time. We do not bill expenses beyond travel outside Singapore, and we do not have a rate card with eleven levels on it because there are two of us.
No juniors, no pyramid
The people you meet are the people who do the work. We take on four to five engagements a year, which is the honest capacity of two partners. If we are full we will say so and suggest someone else.
We will decline work
If your question is really a decision the leadership team has already made and wants validated, we are the wrong firm and expensive cover. We turn down roughly a third of enquiries on that basis.
You keep the models
Every spreadsheet, model and data pipeline we build is handed over live, documented, and yours. Nothing sits on a server we control after the engagement closes.

Who we are

Two partners. That is the whole firm.

Nadia Rahim

Nadia Rahim

Partner — Commercial

Twelve years in strategy consulting across Singapore and Jakarta, then two as commercial director of a S$200m distributor. Does the customer economics.

Gerald Vale

Gerald Vale

Partner — Operations

Former plant director in contract electronics, then operations practice at a global firm. Does the plants, the org design and the operating reviews.

Start a conversation

One of the two of us replies personally, usually within a day. The first conversation is an hour and costs nothing.

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