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When supply chains merge: 5 mistakes to avoid

The desire to quickly merge two separate supply chains into one is strong ““but don't let that desire cloud your judgment. There are plenty of reasons to slow down and understand the risks that come during the process of merging supply chains, and this article by Dr. Harpal Singh examines 5 mistakes that can be avoided if recognized and understood. To begin with, once the supply chain is merged the supply chain managers must come to a decision on the metrics to be used. This isn't a simple matter of selecting the metrics that worked well in the past. Companies should start with metrics in three areas: financial, supply performance, and delivery performance. These three represent general metrics areas and can help with the more troublesome decisions around specific metrics. Another mistake is attempting to consolidate systems as soon as possible. This is dangerous because system consolidation can become very expensive and counterproductive. Each supply chain assuredly had different business processes, and expecting a single consolidated system to serve those different processes is unreasonable. Dr. Singh has a suggestion however: There is an alternative. We recommend that companies build a common database that combines transactional data from the inherited systems. Every modern database program provides relatively simple tools that can be used to bring together disparate transaction systems. Often it requires as little as four to six weeks to address key supply chain management reporting requirements around production, production reliability, inventory allocation, demand variability, and order fulfillment performance. The database can serve two purposes. First, the new database becomes a repository for documenting the differences in how the merging entities interpret their data. It provides a platform for addressing transactional discrepancies like duplicate product names, different cost allocations, and alternate data interpretations. Other mistakes include paying too little attention to the planning process and coming up with what a completed merge looks like without defining how to get there. Each of these mistakes can fundamentally slow or derail a smooth merge of supply chains, making this article valuable for any supply chain manager who wishes to avoid some of the troubles and mistakes of merging.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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