16 June, 2022
The Pandemic, Brexit and war in Europe have wreaked havoc on our supply chains. Outsourcing used to be the ultimate business model, outsourcing ancillary activities at an arm's length so that businesses could focus on what they do best. It was efficient and it was affordable. However, all of that changed when the rules on everything from the supply of goods to human contact and international travel began to fluctuate. From the very top of national and international governance, the rules have chopped and changed and are yet to settle. Outsourced services (in particular, cross border services) have experienced delays and even cancellation, causing knock on disruption to their customers. The cost has increased when efficiency has decreased.
In response, a growing number of businesses have turned their backs on outsourcing, instead looking to develop their in-house capabilities for every aspect of their supply chain. To do this organically would be a huge undertaking, in time and money, however one method is fast developing as the forerunner for manufactures wishing to bring their supply chain in house due to its pre-packaged and simple feel - supply chain mergers and acquisitions.
A business can merge with or acquire another business to provide key services such as financial, technological, media, telecoms, consumer products, industrial products, or materials. Rather than hiring and training new staff or retraining your current workforce in areas beyond your expertise, you could acquire a business with experienced staff who already know the area. Acquiring or merging with such businesses is beneficial because they will belong to you and exist to serve your Company Group rather than various other customers.
There is some essential groundwork which is required to synergise the businesses, but this should be viewed as a chance to redesign your business strategy. You could overhaul the lines of communication between the two businesses and align the business values. You could design a combined way of working to harness the best from each supply chain.
Mergers and acquisitions require planning and preparation, but this is light work when compared to hiring and developing the services from scratch and far more efficient than relying on third party services which you have little control over.
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