SUPPLY CHAIN FINANCE

Post-merger integration is about value creation beyond the deal and to achieve synergy effects. To integrate and maximize the synergies when two companies merge there should be a focus on supply chain where 80% of the cost is generated and customer service is created.

Typical examples of supply chain challenges and opportunities in post-merger integration are:

• Strategic sourcing to utilize a larger spend
• Manufacturing to utilize a common footprint
• Retail to avoid cannibalism due to network overlap
• Logistics to utilize a larger volume without cost increase
• Inventory management to be aligned with new customer demand

Be clear where the savings in the supply chain integration is coming from. To achieve expected synergies, it´s important to do the homework, don´t integrate what you don´t need to integrate. Spend necessary resources and time on defining and quantifying synergies before integration so you can focus the energy on the big savings.

From supply chain perspective it´s important to understand how different post-merger strategies support overall competitiveness; how can supply chain support targets on growth, cost and other financial targets. A common mistake is that only one perspective is considered, and the expected synergy is lost. For example, only focusing on reduced spend resulting in longer lead time and reduced flexibility.

MYSIGMA have over the years supported many clients in different post-merger integration challenges. We have identified potentials early in the process and mapped individual benefits to visualize where the big synergies will come from. Our experience is that structure and facts are needed but in the end it´s people we are dealing with, so combining value focus with experience is vital to be successful in the change management beyond the deal.