When two companies merge together, it tends to cause a major disruption in the flow of the supply chain overall. If the company plans well, it is quite easy to utilize a merger to benefit the supply chain. What many managers fail to realize is that adding another company increases the assets and potential for the company to utilize the supply chain to their advantage, (“Addressing Supply Chain Inefficiencies Following Mergers,” 2016). That being said, a merger would affect the facilities, inventory, pricing, information, sourcing, transportation, and manufacturing aspects of the two prospective companies that are merging, (“Addressing Supply Chain Inefficiencies Following Mergers”).
Regarding facilities, the facilities will essentially double, which could be a good or bad thing depending on what the management decides to do. Ideally, the managers should find a way to combine these locations effectively to affect inventory positively.
Referring to inventory, the companies will have double the inventory. There will need to be a new framework designed that will allow the company to transfer the inventory into the place that will make the most logistical sense on the supply chain.
Pricing will absolutely shift given the change in available inventory to produce the product. This could both affect the price in a positive or negative way depending on the inventory available for production.
Information is a crucial part of the supply chain that would be affected by a merger. What is going to be key is joining the two companies so that the supply chain does communicate effectively. This will eliminate waste in the supply chain.
Sourcing will need to be reassessed to see which areas of the prospective company would be best. There would need to be a strength analysis in order to ascertain how these companies can utilize their strongest divisions to promote efficiency.
Transportation is going to have a major shift depending on where these companies are located. The entire transportation framework will have to be redesigned in order to accommodate the new vehicles that will be added to the fleet of both companies joining together.
Manufacturing will also have a major shift due to the reality that both companies will have different levels of technology. An assessment will also have to be made to see which company is the most advanced and then there can be a plan made for manufacturing.
Works Cited
“Addressing Supply Chain Inefficiencies Following Mergers.” PartsSource. 2016. Web. 3 May 2016.
