In many of my recent blogs and podcasts, I’ve been discussing the importance of supply chain due diligence and supply chain integration. And as you know by now, due diligence and integration go hand-in-hand.
To give you a big picture perspective of how supply chain due diligence and supply chain integration fit together, the list below shows a progression of the ten-step M&A life cycle.
Step 1: Get involved with acquisition opportunity
Step 2: Perform supply chain due diligence (Click here to listen to a podcast on supply chain due diligence and M&A.)
Step 3: Understand business strategy
Step 4: Develop supply chain strategy and supply chain integration plan (To learn more about supply chain integration, here is the link to a recent white paper by Gene Tyndall, Tompkins Associates’ EVP, Global Supply Chain Services.)
Step 5: Complete the acquisition
Step 6: Pursue supply chain strategy and supply chain integration plan
Step 7: Establish supply chain profitable growth plan (Listen to this podcast for more details on “profitable growth.”)
Step 8: Pursue profitable supply chain growth plan
Step 9: Get involved with next acquisition/divestment opportunity
Step 10: Return to Step 2
Looking at this process, I’d like to highlight Step 9: “Get involved with the next acquisition/divestment opportunity.” What I’m saying here is that M&A is not a one-stop process; rather it is an ongoing evolution. We need to grasp that, for better or worse, once organizations become involved with M&A, they never are “finished.” There is a constant evolution. Not grasping this can result in making decisions that may be good for the present acquisition, but not for the evolutionary life cycle of future mergers and acquisitions.
This can particularly be the case when forced to complete an integration plan on an accelerated schedule. However, if those going through the process do not understand that this M&A activity is just a stepping stone, the next M&A can often result in short-sighted decisions that require costly modification later.
So, also allow for some flexibility in your M&A process and be thinking ahead to the next step to help the integration continue to flow smoothly. I can assure you that the requirements will change sooner than you anticipate.
Go!Go!Go!
Jim
Download the White Paper: Integrating Supply Chains from Business Combinations - Principles and Best Practices of Mergers and Acquisitions.
http://www.tompkinsinc.com/publications/monograph/supply-chain-integration/
Global M&A Podcast - Transforming Supply Chains for Profitable Growth
http://www.tompkinsinc.com/podcast/transcripts/6-2-10_podcast43-profitable-growth.asp
M&A Podcast - Supply Chain Due Diligence and Mergers and Acquisitions
http://www.tompkinsinc.com/podcast/transcripts/4-6-10_podcast39-merger-acquisition-3.asp
Warning: Mergers and Acquisitions May Be Hazardous to Your Company's Health
http://gogogosupplychain.tompkinsinc.com/post/mergers-and-acquisitions-hazardous.aspx
Are You an M&A Sinner? Repent and Heed the Lessons Learned!
http://gogogosupplychain.tompkinsinc.com/post/mergers-and-acquisitions-mistakes.aspx
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