My business recently went through an acquisition. What steps need to be taken for supply chain integration? Specifically, how can software help with this process?
During a merger, many companies consolidate the back room type processes and often leave the brand and products intact. The supply chains may maintain distinct raw material suppliers if the company's product lines are diverse.
For example, Estee Lauder Inc. owns many cosmetic brands, and the company uses very distinct packaging designs. It consolidated many of the bottle and container purchases, although some unique raw materials still come from specialty sources.
The goals of a merger may be to recover investment capital as well as build a foundation for future streamlined operations. Companies expect to save working capital, so of course this means streamlining IT and administration. With the supply chain, that means reducing suppliers, facilities, systems and consolidating data.
More on supply chain management
Find out how to decide whether to buy supply chain visibility software
Understand global supply chain risks, opportunities
Learn how to implement SCM abroad
The first step is to map the processes and create a systems portfolio. A neutral facilitator is important since, ultimately, a particular practice or system will be selected as the superior practice to adopt across the business, and a professional facilitator can help maintain constructive dialogue.
Software helps in the following ways:
Supplier sourcing and spend management
A view of the total spend by various cuts can really highlight how and illuminate where dollars are spent. Supplier risk management should also be considered.
Supply chain network design and optimization
Create a total review of the network -- plant and warehouse. Look at how much capacity you need and examine the best locations to produce, hold inventory and distribute. Existing approaches may not work, and this would be the time to evaluate whether the new network will support your business goals.
Once you know who your suppliers are and where your facilities are, consider the transportation spend. Most companies, even without the catalyst of an acquisition, are hard pressed to know their spend. Consider subscribing to a transportation management system (TMS) that can help with spend analytics and optimize logistics operations.
Integration service providers can create a neutral platform to pull data together from other applications and source any new or legacy applications that might be selected to support the business. Rather than purchasing an expensive integration suite from a larger integration company, you might look at the leading managed file transfer (MFT) companies that support both application-to-application and enterprise integration.
I advise multisite capability, not just hosting multiple versions. Cloud computing can provide a company-wide view of the supply chain operations, which helps reduce IT operational costs in the short run and provides greater control over the long run. There are many cloud-based supply chain systems that allow users to plug in their disparate systems and let each operation maintain their legacies.
Follow SearchManufacturingERP on Twitter @ManufacturingTT.
Dig Deeper on ERP and supply chain management
Related Q&A from Ann Grackin
As the manufacturing sector produces and incorporates more IoT technology, companies must create strategies to protect their data. Here are six ways ... Continue Reading
Discrete manufacturers face challenges related to demand forecasting and inventory management, to name just two. Here's a look at why -- and what can... Continue Reading
Process manufacturers must deal with a number of supply chain management challenges. Here's a look at the top seven and why they're so tricky. Continue Reading