I'll consider a high risk to try to manage the merged company as part of the current supply chain system, a recovery plan must be stablish to oversee the lack of compatibility between both systems prior to the merge, however some companies will have a bigger lost on investment when they try to implement a system in less than two years. a transition plan must be develop with 20%-80% relationship in terms of maininting the supply chain in both companies up and running.
I've seen some unsuccesful merge specially when the bigger company invest a lot of money on managing the supply chain using the same methodolody that works for them, however software applications such as AGILE and Oracle will be a great help but the ROI will take some time.
re-qualifying supplier, components, sub-assemblies, FG, is part of the merge as much as part of the supply chain integration.
Barbara posed an interesting question regarding the importance of the merged companies being on the same IT platform. The most preferred scenario is that the IT platform strategy would be decided prior to the merger during the due dilligence. It is likely the companies will be on different platforms. Whether to migrate to one platform or meet communication needs through integration will depend on several variables, including; the state and qulity of the competing IT platforms, how similar or disimilar the product lines of the merging companies are, the size and scale of both supply chains and how the post-merger company IT strategy and business strategy (seperate products, under one brand, service levels offerered, sourcing, supply chain performance targets, etc.)
General speaking I've seen the most success with companies that make the tough decisions early and migrate to one IT platform. In good companies this happens with senior management buy-in. This approach will get people to work faster as the have a common goal and reduce concerns about the future and turf battles. This should happen aggressively, but not wrecklessly. Too short and problems will occur both technically and from a user perpective. Too long and the migrations get protracted, costs increase and the value of the merger decreases.
That's a pipe dream mostof the time. In a best-case scenario, the customer might not realize something's down. But more often than not, something breaks during migrations. In most cases, if 80+% of production is alive, it's a good exercise.
That is helpful to know. I know the IT platform is not a deal-breaker, but I've also known companies to shut down for four days to do an IT migration. As long as it's transparent to the customer I'd consider it a success
As far as my experience as IT manager goes, it is very unrealistic to expect that the merging company will have the same IT platform as the principle company. It does create initial hiccups - especially in supply chain. The main mismatches arise because of Different item coding schemes which means the item masters cannot be merged., inventories of common items can be clubbed together, shortages cannot be accurately found across the companies. Similar problem is with Vendor codes.
As IT manager what my team had done was to develop a bridge between the two IT systems which will map one system's data onto another systems data structures and vice versa. We were successfully able to operate the merged company without either changing its IT systems.
At the later stage both the companies migrated to a common IT platform.
In addition to the strategic aspects you mention, how important is it for the merged compnaies to be on a common IT platform? I've heard various opinions about this over the years: some believe it is sufficient that the systems "talk" to one another; others believe one system is the only way to go. As a 3PL, does UPS have any observations to share?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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