Supply Chain Business Merger Ideas Your Distribution Business Can Use

When two global business giants merge there are going to be some challenges. The merger between Kraft and Heinz is a great example. It’s a merger and a process other businesses in the supply chain industry should watch closely.

Are you planning to grow your distribution business by acquisition? Or, are you considering merging with another distributor with a complementary product line? Start your planning process with the list of actions taken by Kraft and Heinz as they complete their analysis and next steps.

Mergers and acquisitions always lead at some point to:

  • A consolidation of assets,
  • Removing redundant groups, services and processes, and
  • Reviewing and implementing the best, most cost efficient practices.

The supply chains of both of these companies are enormous and encompass everything from transportation and warehousing to 3rd party vendors and information systems. The best suppliers, processes and systems in each of these categories will come out the winner (so to speak), and the choices made by these giants may provide ideas for improvements to your business operations and your approach to mergers and acquisitions. Their merger might even affect your business through changes in their supply chain relationships due to consolidation.

Clearly, supply chain data and trends from each companies Enterprise Resource Planning (ERP) system will be extracted, compared, and discussed. Decisions for consolidations will be made based on the data of warehouse space available for products with similar storage requirements, volume and cost contracts for freight, even the speed of customs clearance and Third Party Logistics (3PL) provider capabilities. Their supplier relationships in each category will be reviewed and probably renegotiated. Even smaller supply chain businesses like yours can learn from and emulate the path these giants follow over the next several years.

These two supply the world with hundreds of products and will be the 5th largest food company in the world. A recent article in Logistics Management “Predicts that analyzing data will be front and center in the decision making process”, and “Master data management is both a significant challenge and an enabler to order, shipping and billing processes as these two companies become one vendor”.

Keep an eye out for more news about this major logistics merger! Is your ERP system up to date and ready to provide the data and analysis required for your merger and acquisition plans?