How mergers and acquisitions affect supply chains

Mergers and acquisitions have topped headlines in 2015. In the first half of the year alone, Investopedia listed the top 10 mergers and acquisitions, which totaled over $230 billion.

Among these was a $78.7 billion merger between Charter Communications and Time Warner Cable – the biggest of 2015 and in recent history, according to the list.

Investopedia noted that 2015 marks the most active year for mergers and acquisitions since the Great Depression and generally points to good signs of economic growth for the U.S. as a whole.

Deals this big have effects on countless people, from consumers to business owners, but the most significant impact doesn't lie with a single person rather the supply chains that exist within these respective companies. 

Mergers and acquisitions affect on supply chain management
Every merger carries important consequences within supply chains, and how seriously those consequences are taken into consideration can deeply affect success rates.

Wall Street Journal contributor Foster Finley noted that any business that has a heavy focus in manufacturing or distribution should pay close attention to the affects its merger has on its supply chain. Finley, who works as managing director of AlixPartners' Enterprise Improvement practice, stressed that supply chains have an impact on every facet of a company's overall performance. As such, mergers and acquisitions need to account for supply chains in a very direct and purposeful manner.

Finley offered a handful of suggestions as to what needs to identified and handled in order to successfully integrate supply chain management into your overall merger plan.

For starters, a company should spend ample time reviewing and working to comprehend the intricacies of any new supply chain structures that have come about as a result of the merger. Leaders should also assess whether there are points in the supply chain that are duplicated. This allows for the elimination of repeat distributors.

Most importantly, Finley advised any merging companies to assure there are employees assigned to the implementation of the supply chain plan. This will allow for a seamless and relatively speedy transition.

Merger supply chain management does not end here. There should be a series of follow-up assessments to assure the system is working smoothly and effectively.

According to Dr. Harpal Singh, in an article for Supply Chain Quarterly, post-merger supply chain assessments should focus on three major aspects: integration, optimization and acceptance. All three posts are intended to assure that supply chain systems exist on all levels, present themselves in their best form and are widely accepted company supply chain policy.