Supply chain integration

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Optimizing the supply chain

Integrating the supply chain during mergers and acquisitions can vary greatly from industry to industry, but a Golden Rule applies: No disruption in service to the customer. To minimize disruption to the product flow, supply chain synergy capture efforts must be balanced with integration priorities, taking execution complexity into consideration. Companies that effectively execute the tactical requirements of supply chain integration will create operational efficiencies and capturing deal value.

The primary objective during Supply Chain integration is to preserve relationships with key customers and strategic vendors.  Being aware of the transaction, customers and competitors will look to realign their strategies to their benefit.  

Minimize the disruption to the product flow

Setting the course for Supply Chain integration requires immediate attention to address critical matters important in the early stages of a merger or acquisition. Setting the course typically addresses the following areas.

  • Business insights are developed based on analysis to meet and exceed initial synergy targets sooner than planned. This includes assessing the target to determine what to keep, defining the combined operating model, identifying the Supply Chain footprint, outlining Supply Chain processes (plan, source, make, deliver, and return), enabling systems infrastructure, and interacting across functional teams.
  • No customer disruption is the Golden Rule in Supply Chain integrations and critical to making the M&A process seamless to customers. Day One readiness planning is a crucial component to ensure operations continue without disruption, minimizing the impact on forward and reverse flow of products and materials; aligning the organizational structure, leadership selection, and roles and responsibilities; identifying key employees that need to be retained; developing a Supply Chain roadmap to smoothly migrate to common processes; and rationalizing third party providers and suppliers.
  • Synergy realization is about identifying, optimizing, and realizing synergies across the Supply Chain. Evaluating and prioritizing synergy opportunities against “Speed of Implementation” and “Financial Impact” will help maximize deal value for shareholders.

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Michael Giguere

Principal, PwC US

Amit Verma

Principal, PwC US

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