Six Strategies for Shippers to Achieve Seamless Continuity During M & A

Highlights from a recent LinkedIn Live event co-hosted by Tony Wayda & Brian Carlson 

Supply chain professionals are almost always problem-solving. Whether they are navigating the latest disruption, negotiating new routes, or dealing with a customer service issue, they are inundated, and when it comes to mergers, acquisitions, and divestitures, it is no different. Those situations are fraught with tension, particularly when it comes to supply chain management.

In this LinkedIn Live event, Tony Wayda, Principal at JBF Consulting, and Brian Carlson, Principal at Cornerstone Edge, discussed the complexities of navigating these M&A issues, with a special focus on the transportation and warehousing angle. Read below for key highlights of their discussion, or click here to watch a recording of their conversation.

Watch a recording of the 16 minute session here (and be sure to stay for bloopers at the end)!

 

Key Takeaways:

• Thorough planning, risk mitigation, and proper communication are essential for successful supply chain management during mergers and acquisitions.
• Companies often have to reevaluate their distribution center footprint and reduce the number of warehouses to streamline operations.
• Divested companies may face challenges such as finding new 3PL providers, redesigning warehousing systems, and transitioning to industry-standard processes.
• Change management and retaining key team members with knowledge of company processes are crucial during mergers and acquisitions.
• Divested companies must decide between rebuilding custom transportation management systems (TMS) or adapting to standardized platforms, which impacts transportation operations.
• Regular review of contracts, warehousing setups, and distribution models can help identify potential risks and inefficiencies in advance, preparing companies for unexpected external challenges.

Challenges in Supply Chain M&A

The fact is, most companies don’t plan for mergers and acquisitions, when they do occur, they are almost always a surprise. When this happens, companies are forced to act quickly. They must reevaluate their distribution center (DC) footprint and usually end up having to reduce the number of warehouses in their supply chain to streamline operations. As Brian shared, this can be done successfully, when:

• There is ample time for thorough planning
• A risk mitigation plan is in place and in play
• Proper communication is enforced during the transition to maintain business continuity

Unfortunately, ample time for planning isn’t often a reality during mergers and acquisitions. Instead, operations are forced to act quickly and move fast. As Tony shared, most companies have a much harder time after being divested. An operation he worked with had their 3PL cease to provide services, this left the business in a bind. They had to:

• Scramble to find new providers in a short amount of time
• Redesign their warehousing systems and business processes
• Abandon custom-built systems to transition to industry standards in a completely new setup

If companies are better prepared for an eventual M&A change, they can work toward making the transition a smooth one, but that can’t be done without proper planning.

People and Change Management

The people who make up your operation are critical to its success, they keep everything moving and functioning as it should! This is why prioritizing change management within your operation is critical. Amid a merger or divestiture, this becomes even more essential.

The people within the company with knowledge of its processes are critical. You want to have their unparalleled expertise at all times, but especially during a stressful time of forced transition. Without those indispensable team members, companies are forced to rebuild their team from scratch, a costly and lengthy procedure. Ensuring that internal teams and external partners are well-prepared for the shift is crucial to a company’s success. 

Technology and Custom Systems in Transportation

Transitioning to new systems often requires a comprehensive reevaluation of business processes. Divested companies must decide whether to rebuild their custom transportation management systems (TMS) or adapt to industry best practices through standardized platforms. This decision has direct implications for transportation operations, particularly in managing fleet optimization, routing, carrier selection, and distribution across multiple regions.

The choice between custom and standardized systems can significantly impact delivery efficiency, cost management, and the ability to scale operations to meet customer demands.

The Impact of External Forces

As if mergers and divestitures weren’t enough, there’s the added layer of uncontrollable external forces that may have an impact on a business, like market conditions or government regulations. Divestitures could be delayed due to national security concerns, and unexpected events like labor strikes or overcrowded ports can throw off the most perfectly planned transition.

Tony and Brian agree that the best action a supply chain manager can take to prepare for these unpredictable events is to regularly review contracts, warehousing setups, and distribution models. By identifying potential risks and inefficiencies in advance, companies can prevent last-minute crises when unexpected challenges arise.

Summary

Mergers, acquisitions, and divestitures present major challenges to transportation operations. Whether it’s coordinating diverse fleets, integrating new transportation management systems, or managing the human impact of organizational shifts, the complexities are significant. The best approach is to plan for unpredictability, ensuring that contracts, technology, and teams are equipped to adapt and maintain seamless transportation operations in the face of change.

It’s not always easy to know which way to go. We’re JBF Consulting and we’re here to steer you in the right direction. Reach out, and let’s see how together, we can find the road that’s right for you.