Like bacteria on a warm petri dish, economic conditions have created a breeding ground for mergers and acquisitions. However, it's not the usual private equity firms that are forking out the cash. It's the corporations themselves that have been hoarding cash, waiting for the right moment to seize the opportunity.

For those who are planning an M&A, beware: Not having a comprehensive approach may be toxic to your supply chain.

I know, I know, I always preach "strategy." But, in many cases where M&As fail--and they fail a whopping 50-80% of the time, depending on where you get your information--a strategy was present. The piece they were lacking was knowledge--or, at least, knowledge of the full picture. So, it is imperative to have strategy as well as know-how.

Acquiring or merging with another company requires a robust practice. To come clean with you, this is what stimulated this blog. I saw an e-blast from a firm claiming to be your solution for M&A when what is really being offered is the consolidation of distribution operations. Wow, some folks need to check their medical insurance as they are certainly headed for a long hospital stay. The reality is there are many business-related processes that also need to be accounted for--marketing, finance and employee communication, for example.

Although there is a smorgasbord of different areas to address before and after a merger or acquisition, your Board expects a smooth flow of processes between the combined companies to be done quickly, leaving those in charge of making it happen, who may sometimes be one of the last to learn of the M&A, very little time.

 To start your company off on the right foot with M&As, here are seven strategic issues for supply chain integrations that need to be addressed:

1. Supply chain strategy for the integrated business

2. Operations strategy (e.g., low-cost supplier or high-service provider, or both?)

3. Organization of the integrated supply chain processes

4. Functions or levels to outsource

5. Differentiation through supply chain performance

6. Supply chain technologies utilization

7. Employing change management

These seven are often at the core of success (if done well) or failure (if done poorly).
Tompkins Associates