CSCMP's Supply Chain Quarterly
April 28, 2017
Supply Chain Executive Insight E-Newsletter
Each month the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
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Separation without the anxiety

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When companies divest or acquire a business, it has all kinds of implications for supply chain professionals. Our special three-part series provides an idea of what may be expected of you.

When one company buys another, the news tends to focus on the acquisition part of the deal, especially if a hefty price tag is involved. But that's just one side of the transaction; for every buyer, of course, there's a seller. Although it may seem that the latter has it easy compared to the buyer, which has to absorb and integrate the new acquisition, divesting a business is a pretty complicated matter, too.

This is a timely and relevant topic for supply chain managers. With the number of mergers, acquisitions, and divestments swiftly increasing, more and more of us will be tasked with preparing our companies' supply chains to accommodate those momentous changes. That is why we decided to publish "Getting Ready for Acquisitions and Divestments," a special, three-part series of articles in CSCMP's Supply Chain Quarterly and on our website, supplychainquarterly.com.

In those articles, a team of consultants from the professional services firm Ernst & Young LLP looks at the supply chain implications of mergers and acquisitions from both the seller's and the buyer's side of the deal. In Part 1 ("Divesting an asset? How you can maximize its value and sale price," Q3/2016) they examined how supply chain executives can create value and prepare assets for sale in order to maximize the value for the seller. Part 2 ("Buying or selling an asset: How to prepare for the handoff," Q4/2016) considered the sign-to-close phase, including how to develop a transition plan. We're just now putting the finishing touches on Part 3 ("Supply chain integration and optimization: The keys to realizing a deal's value"), which discusses executing on those plans, including stabilizing the assets and integrating them.

The past two years have seen mergers and acquisitions worth nearly US $5 trillion, by some counts. Things aren't likely to slow down, either: About half of all companies surveyed in EY's 2016 "Global Corporate Divestment Study" said they plan to divest a business unit in the next two years.

Your company could very well be involved in one of those deals. And as the EY team points out, how well supply chain organizations manage their responsibilities can make the difference between a deal's success or failure. So if you haven't read the series, you may want to pull out your back issues or go online and check it out.

Toby Gooley is Editor of CSCMP's Supply Chain Quarterly.

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