All Things Nexterus

Our Take


July 30, 2018

Supply Chain Management in the Midst of a Merger or Acquisition

Change is good. Or, it can be. If a company is undergoing a change, such as a merger, acquisition or even a divestiture, the newly formed organization should be a bigger – and hopefully a better – version of its former self.

Unfortunately, that’s not what usually happens, and failure rates for mergers and acquisitions are alarmingly high as a result. There are a number of common reasons for this: cultural incompatibility, ineffective leadership, inadequate due diligence. That last one is notable because a lack of oversight can be the kiss of death when it comes to supply chain management.

The sad fact is, a lot of organizations often don’t plan well for large-scale changes, particularly the bumps and challenges that might impact their supply chain configuration. They may not dig deep enough to fully understand the nuances in their logistics network, for instance, before making changes to impact profit and loss.

The result? The supply chain suffers. Customers don’t get the goods they expect, or they don’t get enough of them. Inventory levels are off, new products and facilities are introduced into the combined network, leaving the newly formed entity in disarray. The lifeblood of the business’ ability to generate revenue, not to mention its brand, and its reputation in the global marketplace, are compromised. All because the new entity didn’t consider effective supply chain strategy after the ink was dry on the deal.

Supply Chain Management Software as a Solution

At Nexterus, we help clients who want to avoid that. We use supply chain management software to help leaders who want to embark on, or are currently in the midst of a significant change, to neatly bypass that kind of failure.

As different facets of a business merge, are acquired or are divested, there are multiple supply chain options available to ease any shift in an organization’s supply chain. These options not only minimize or eliminate risk, they can help the organization provide world-class service to customers and other clients post-deal. After all, that is the mark of a successful organizational change – no disruption in business or in customer service.

For instance, Nexterus’ simulation software could easily calculate how many manufacturing and distribution facilities two recently merged companies need – and where they should be located. We can help you determine the right amount of inventory, and ensure the organization has it in the right place at the right time to serve fluctuating customer demands. Our software can even factor in unexpected shifts in product demand based on seasonal changes and other factors.

Optimizing with Supply Chain Management

Whether an organization is in the midst of a merger, an acquisition or a divestiture, business must go on if the organization is to survive. That means the supply chain must be optimized, which is why supply chain management software is so important. Traditional methods won’t cut it with today’s complex networks. There are too many moving pieces not to leverage technology.

Ideally, customers shouldn’t realize – unless they’re really paying attention – that a significant business change has occurred. They should still receive their goods as scheduled, or be able to access them without difficulty at the retailers they habitually frequent.

Customer fulfillment expectations must be met. Post-acquisition, for example, an organization will need to ensure that its logistics network isn’t compromised. The new, larger organization should continue to operate cost effectively and efficiently.

After the dust settles, and a company has absorbed the different challenges that may have cropped up as a result of a significant organizational change, it’s time to fine tune things. Should the company tweak inventory amounts? Or, would it be advantageous to review workforce numbers? Nexterus’ software can provide answers to those supply chain questions and more.

For instance, there may be an opportunity to reduce staff with some judicious reassignment to appropriate areas of the supply chain. Or, the company may need to add talent to ensure its network and processes are adequately staffed to function at their peak. Whatever the situation, our software will shine a light on an effective solution.

To find out how Nexterus’ expertise in supply chain management can help your organization run effectively – or better than ever – post-merger or acquisition, click here.

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