Internal supply chain integration after horizontal

2022-09-19
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Internal supply chain integration after horizontal mergers and acquisitions Abstract: horizontal mergers and acquisitions have become an effective means of rapid expansion of enterprises, and the integration of internal supply chain will determine the success or failure of horizontal mergers and acquisitions. In order to avoid the original two supply chains fighting each other and lay the foundation for the integration of external supply chains, enterprises after horizontal mergers and acquisitions must integrate internal supply chains. By using business process reengineering, advanced forecasting methods, supplier managed inventory and delayed product differentiation, the internal supply chain integration purpose of improving the efficiency and response speed of the internal supply chain and enhancing the flexibility of the supply chain can be achieved

key words: horizontal mergers and acquisitions; Internal supply chain; Integration

Introduction

with the further development of economic globalization and the increasing market competition, enterprises have taken mergers and acquisitions as a form and means of their rapid development, especially horizontal mergers and acquisitions have become an effective means for enterprises to expand rapidly and form scale effects. In recent years, especially since China joined the WTO, domestic enterprises have taken mergers and acquisitions as a way to enter the world market. The outward horizontal mergers and acquisitions of Chinese enterprises have attracted world attention, such as Lenovo's acquisition of IBM's PC business, and Minmetals Group's acquisition of Noranda aluminum, Canada's largest mining company. However, the existing statistics generally show that the success rate of mergers and acquisitions by acquirers is less than 50%. The success rate of enterprise mergers and acquisitions is not high, and the important reason for the failure is the problem of integration management after mergers and acquisitions. As we all know, mergers and acquisitions are more difficult than integration. In the process of integrated management, from the perspective of business needs, the supply chain is complementary to improve the energy utilization efficiency of the plastic granulator process and prevent and control environmental pollution. The requirements for synergy and integration depth are the highest. It requires a high degree of collaboration among professional departments and branches. Therefore, the systematic integration of the supply chain is considered to be the most difficult part of the business integration of horizontal mergers and acquisitions

since the 1960s, people began to study the problem of enterprise mergers and acquisitions, the theory of enterprise mergers and acquisitions has been quite rich, but the research on the integration after mergers and acquisitions is relatively small. Although the integration of enterprises after mergers and acquisitions has attracted more and more attention, most of the research on the integration of enterprises after mergers and acquisitions has also focused on the integration of human resources and culture, while there is little research on the integration of supply chain, especially the integration of internal supply chain. As a core of enterprise management, internal supply chain integration after horizontal mergers and acquisitions will even determine the success or failure of the whole enterprise mergers and acquisitions

1 the necessity of internal supply chain integration after horizontal mergers and acquisitions

1.1 avoid the situation that the two supply chains fight each other after mergers and acquisitions

although the two enterprises of horizontal mergers and acquisitions usually have great similarities in business and products, most of them are competitors in the same industry or even substitutes for each other before mergers and acquisitions. However, before the merger and acquisition, there are great differences in the selection methods and standards of suppliers and the distribution channels and sales models of consumers between the two enterprises. Before the merger and acquisition, the two enterprises were divided into two independent parallel supply chains

the supply chain after mergers and acquisitions will not automatically integrate with the completion of mergers and acquisitions. Since the supply chain systems of the two enterprises before the merger and acquisition were based on completely different architectures, the enterprises in the initial stage of the merger and acquisition could not use unified business data, which could easily lead to the two supply chains fighting each other in the new enterprise. Therefore, the horizontal M & A enterprises must integrate the internal supply chain of the new enterprise in order to achieve the purpose of combining the two supply chains into one, and reverse the situation that the supply chain fought independently in the initial stage of M & A

1.2 premise of external supply chain integration

supply chain can generally be divided into intra enterprise supply chain and external supply chain

with the diversification of customer demand, the intensification of enterprise competition and the strengthening of market uncertainty, the competition between enterprises has gradually changed into the competition between supply chains [3]. The truly effective supply chain management should be, and only in the state of organic unity of business processes within the enterprise, and then integrate or cooperate with other enterprises to give full play to the overall performance of the entire industrial supply chain. Through horizontal mergers and acquisitions, new enterprises have rapidly expanded their scale, improved their core capabilities, and mastered the key elements of supply chain operation. They can usually serve as the core enterprises of the supply chain to lead the integration of external supply chains. Therefore, horizontal mergers and acquisitions enterprises should integrate the internal supply chain to provide conditions for enterprises to integrate the external supply chain

2 objectives and Countermeasures of internal supply chain integration after horizontal mergers and acquisitions

facing the increasingly competitive market environment, the evaluation of the quality of the supply chain can no longer be limited to cost indicators, but should focus on the efficiency, response speed and flexibility indicators of the supply chain. Improving these performance indicators is also the goal of internal supply chain integration of enterprises after horizontal mergers and acquisitions. We can adopt advanced supply chain management methods and means in the process of internal supply chain integration, so as to achieve the goal of internal supply chain integration

2.1 improve the efficiency of internal supply chain

more and more enterprises have realized that time and speed are one of the key factors affecting whether enterprises can win in the market competition, and time or speed has become the main source of competitive advantage [2]. At present, people pay more and more attention to the requirements of supply chain efficiency in reducing inventory levels, "zero inventory", material demand planning, and distribution demand planning

business process reengineering is an effective way to improve the efficiency of internal supply chain. The efficiency of an enterprise mainly depends on the effect of the process. The integration of the internal supply chain of horizontal mergers and acquisitions should usually start with the process integration and transformation. Business process reengineering is a structural improvement of the existing business process of the enterprise based on the needs of customers, which combines the whole and part, so as to ensure that the division of labor of various businesses based on the process is reasonable, clear, the process is controllable, and the monitoring is effective, and finally improve the operation quality and economic benefits of the enterprise [4]. For example, the business process reengineering of Ford's accounts payable department reduced the number of employees by 75%, from more than 500 to 125. IBM credit card company reduced the issuance cycle of credit cards from 7 days to 4 hours through business process reengineering. Kodak's new product development business process reengineering has shortened the development time of 35mm disposable camera from 38 weeks to 19 weeks. It can be seen that business process reengineering can greatly improve the efficiency of the internal supply chain

business process reengineering emphasizes the overall consideration of internal and external management of the enterprise with the view of system optimization and the main orientation of meeting customer needs, introduces new process improvement concepts and tools, and redesigns business processes [5]. The key business processes of enterprises in the supply chain include: customer relationship and customer service management process, customer order fulfillment process, procurement and supplier relationship management process, product development management process, demand/supply management process, production management process, return and reverse logistics management process [6]. Horizontal mergers and acquisitions provide new resources and opportunities for business process reengineering

horizontal mergers and acquisitions make the scale of enterprises expand rapidly. After mergers and acquisitions, enterprises will gain greater voice in the whole supply chain due to unified procurement and unified sales, and will have greater influence on the supply chain and distributors. Therefore, horizontal mergers and acquisitions enterprises should make full use of these advantages in the process of internal supply chain integration, strengthen customer relationship management, improve customer relationship and customer service management processes and customer order fulfillment processes; Establish and prepare strategic alliance relationship with suppliers, optimize procurement and supplier relationship management process. At the same time, integrate the advantages of the first two enterprises or take the benchmark enterprise as an example, introduce new process improvement concepts and tools to reengineer the business process of product development management process, production management process, demand/supply management process, etc. Horizontal mergers and acquisitions should focus on meeting the personalized needs of consumers. The third industrial revolution will create a large market value and space, and promote business process reengineering with efficiency and efficiency as the goal, so as to improve the efficiency of the internal supply chain of enterprises

2.2 improve the response speed of internal supply chain

in order to cope with the reality of intensified market competition, enterprises are trying their best to meet the personalized needs of customers in order to strive for greater market share. At the same time, due to the continuous development of science and technology, the speed of product upgrading is accelerated, and the life cycle of products is increasingly shortened. Especially in some high-tech industries, if the production is not determined according to the needs of customers, resulting in a large amount of inventory, it will directly increase the inventory cost, occupy a lot of funds, and have a high spiritual loss. Just in time production (JIT) regards excessive production as waste. Nowadays, most enterprises are committed to customer demand-oriented pull production, which requires production enterprises to organize production and arrange procurement according to the quantity, variety, quality standards and delivery time ordered by customers or required by the market. Therefore, the internal supply chain serving the enterprise must have the ability to respond quickly to meet the needs of enterprises to respond quickly to the market

for pull manufacturing enterprises, since all pull processes operate according to the response of market demand, it is necessary to improve the level of product supply and demand [7]. In this case, the first step taken by supply chain managers is to predict the future demand of customers. Therefore, in order to achieve the integration goal of improving the response speed of internal supply chain, enterprises must improve the accuracy of market prediction. Take Dell computer company as an example. Although Dell company produces personal computers according to customer orders, it needs to order spare parts and arrange production lines according to the prediction of customer demand. The production manager must ensure that the company orders an appropriate number of parts according to the prediction of customers' needs. He must also ensure that the production line has the production capacity to meet the assembly needs. To make the above two decisions, supply chain managers need to predict the future demand more accurately in order to ensure the response speed of the supply chain

production enterprises after horizontal mergers and acquisitions should fully integrate the advantages of the first two enterprises, make full use of modern information technology to build a modern information technology platform, adopt appropriate prediction methods, and combine demand planning and prediction, so that the integrated internal supply chain has a faster response speed

2.3 increase the flexibility of internal supply chain

supply chain flexibility can be defined as the whole supply chain responding to the changes of market and customer demand quickly with the lowest possible cost and the highest possible service level. In order to adapt to the highly uncertain competitive environment with increasingly differentiated and rapidly changing customer needs, enterprises must make their supply chain respond to market changes as quickly as possible, while maintaining cost advantages and improving customer service levels. In other words, we should improve the overall flexibility of the supply chain. In the internal supply chain integration of horizontal M & A enterprises, the flexibility of supply chain should become an important indicator to measure the performance of supply chain integration

supply chain flexibility refers to the ability of the entire supply chain system, including all supply chain members, to respond to changes in customer demand. This ability does not only depend on each

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