Business Change and Supply Chain Adaptation

Capturing and documenting tribal knowledge is vital for a company looking down the barrel of a divestiture.

For a healthcare company in a merger, acquisition or divestiture, there are tactical strategies to help ensure success.

Supply chains are seldom the primary consideration when companies in the healthcare sector contemplate a merger, acquisition or divestiture. But how companies prepare for such events, and how they manage the integration of the supply chain once restructuring is underway, is one of the main determinants of success. In fact, according to Harvard Business Review study, 70-90% of mergers fail – most commonly because the nuts and bolts of the integration fail.

The effects of a well-managed supply chain are far reaching, impacting the ease and duration of the transition, the capacity of the companies to serve and retain existing customers, and their ability to shape a NewCo that’s strongly positioned going forward. Having helped many companies navigate these periods of upheaval, UPS has observed several common practices that factored in the success of the ventures.

Given the continuing trend towards mergers, acquisitions and divestitures, we believe that healthcare companies can benefit from looking more closely at some practical strategies for managing their supply chains during large corporate restructurings. The specific challenges will depend mostly on whether the companies are engaged in a merger or acquisition, or are divesting or being divested. In these cases, there are specific practices that a logistics manager can put into place. These practices will accelerate the integration process, optimise the supply chain, eliminate pain points, reduce transition costs and enhance the value chain and overall competitiveness.

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