Consolidated, global supply chain design unlocks M&A value. In some cases management teams are not fully aware of the latest power of global supply chain planning tools that can analyze entire networks with rigor, accuracy, and what-if analyses. INSIGHT finds that few firms institute the same type of continuous improvement programs for worldwide supply chain planning as they do for finished goods quality. For maximum impact, supply chain planning must comprehensively evaluate the global supply chain to capitalize upon the dynamics of global markets. Failure to integrate supply chains to take advantage of synergy is one of the reasons noted for the difficulties seen in the Daimler-Chrysler deal. Most importantly, excellence in supply chain design delivers superior results for shareholders and customers.

“A significant portion of the value of an M&A deal must be unlocked through reconciliation of product lines and high-level redesign of a consolidated supply chain,” said Jeff Karrenbauer, president of INSIGHT. “SAILS 21 from INSIGHT optimizes the most complex, global logistics networks – minimizing costs, streamlining operations, reducing inventory levels, meeting demanding customer service levels, and containing supply chain vulnerability risk.”

The benefits of a comprehensive global supply chain design that supports the most competitive delivery service levels include: a design that extracts the most from worldwide operations, regional and product flexibility to capitalize upon changing markets, low cost for profitability and pricing leverage, and the advantages of evaluating many what-if scenarios. Continuous improvement, a hallmark of corporate quality, mandates frequent review of the global supply chain network to account for significant change in demand, demographics, economy, product mix, manufacturing capacity, distribution network, assets, and so on.

In addition, relationships with and the nature of suppliers are changing as large firms have spun off vertical sub-assembly manufacturing as part of rolling back verticalization. Since then, these second-tier, mega-suppliers across many industries continue to grow in size, influencing the success of logistics to the end manufacturer, taking an increasing role in managing lower tier suppliers, and sometimes concentrating supply risk.

Currently, international mergers and acquisitions are common, with revenue growth and/or cost reduction the clear targeted benefits. Yet, few management teams are willing to guarantee cost savings from consolidation. Also, evaluating the best divestiture option, from a component of merged operations, becomes more important as firms stay true to core capabilities and shed non- essential operations. Strategically, the benefits from merger or acquisition may be clear, but firms can get distracted, consumed by the acquisition or caught up in competitive bidding, failing to execute by charting the course to a single supply chain. Single, global supply chains originate with global supply chain planning and design. Simply adding resources, logistical or Information Technology assets, which speed or automate supply chains, fail to unlock the value of true, worldwide synergy. Rigorous supply chain design tools do the painstaking work of determining the right assets, manufacturing facilities, warehouse locations, inventory levels, and transportation routes.

INSIGHT’s flagship supply chain design software solution, SAILS 21(R), enables executives to achieve millions of dollars in savings by consistently improving the supply chain in accord with the changing dynamics of global trade, merger or acquisition, customer expectations, facilities issues, or tough corporate profitability goals. This software tool optimizes the benefits from merger or acquisition, identifying positive and negative assets, and offering alternative scenarios, given management’s strategic view.

About INSIGHT, Inc.
INSIGHT provides optimization-based supply chain planning and network design software and consulting services developed specifically to meet the dynamic business challenges of globalization, disruptions, and mergers/acquisitions prevalent in today’s business environment. Founded by supply chain and logistics experts in 1978 with the goal of using world-class technology to add intelligence to decision making, INSIGHT solves the supply chain management issues of the world’s foremost companies, including Abbott Laboratories, BASF, Clorox, ExxonMobil, Goodyear, GE, Kellogg, Nestle, PepsiCo, Pfizer, Procter & Gamble, Toyota, and Unilever.

SAILS, INSIGHT’s award-winning flagship product, can accurately represent a company’s current business practices, from raw materials sourcing to capacity planning through delivery to the end customer. The X-System(R), a proprietary optimization engine, powers a family of planning and scheduling solutions, from the design of a global supply chains to crew scheduling, troop deployments, inventory optimization, and transportation procurement. In addition, INSIGHT provides optimization components, partnering with third party software providers to deliver best-of-breed solutions. INSIGHT software and services help design optimal supply chain networks that minimize costs and free up capital, streamline operations, maximize profits, and increase customer service levels. For more information, please visit us on the Web at http://www.insight-mss.com/.

Each location and transportation link in a supply chain is a potential point of failure or disruption and recent catastrophes have reinforced the need for risk assessment as an integral part of supply chain strategic planning. Yet, recent studies (AberdeenGroup and others) indicate that firms often do not assess these risks. On the other hand, INSIGHT clients enhance both corporate profitability and supply chain resilience with these actions:

- Critically evaluate global sourcing options
- Plan strategically, implement tactically (Plan from the top down)
- Optimize, don’t just automate
- Acknowledge risk and “self-insure” with resilience
- Commit to continuous improvement

“What keeps INSIGHT’s clients at the top of their industries is their recognition of – and response to – supply chain issues, such as globalization risk,” said Jeff Karrenbauer, president of INSIGHT, Inc. “INSIGHT is in the fortunate position of creating strategic design and risk assessment tools coupled with expert consultative support that addresses the most complex and pressing needs of supply chain planners and executive management teams.”

Globalization Speeds The Pace Of Change
It is generally acknowledged that globalization has increased the rate of change, in the form of procurement decisions, strategic outsourcing of manufacturing, alliance partnerships, channel selection, product introductions, mergers and acquisitions, and so on. Yet in spite of these trends many firms cling to the outmoded practice of revisiting supply chain strategy only infrequently, perhaps every five years or so. By way of contrast, the current best practice of leading edge firms includes a program of continuous improvement with strategic reviews conducted on an annual basis, not ad hoc, one-off studies that are all-too-often forgotten.

Globalization is Not a Panacea
Many firms have rushed headlong into new markets and have made major commitments to the global outsourcing of procurement and manufacturing, enticed primarily by labor rate differences and the uninformed commentary of securities analysts. This myopia is gradually being replaced by a more comprehensive analysis which includes the true supply chain impact of such decisions and includes costs such as transportation, in-transit inventory, loss and damage, port handling, duties, and taxes. Some firms are actually reversing earlier global sourcing decisions based on these more sophisticated analyses, because the promised economic benefits vanished. Moreover, such studies properly include a comprehensive supply chain vulnerability audit/risk assessment, together with an explicit development and quantification of risk mitigating strategies. Risks may include political and/or economic instability, currency fluctuations, pandemics, natural disasters, sole or limited sourcing options, and premeditated attacks by intelligent adversaries.

About INSIGHT, Inc.
INSIGHT provides optimization-based supply chain planning and network design software and consulting services developed specifically to meet the dynamic business challenges of globalization, disruptions, and mergers/acquisitions prevalent in today’s business environment. Founded by supply chain and logistics experts in 1978 with the goal of using world-class technology to add intelligence to decision making, INSIGHT solves the supply chain management issues of the world’s foremost companies, including Abbott Laboratories, BASF, Clorox, ExxonMobil, Goodyear, GE, Kellogg, Nestle, PepsiCo, Pfizer, Procter & Gamble, Toyota, and Unilever.

SAILS, INSIGHT’s award-winning flagship product, can accurately represent a company’s current business practices, from raw materials sourcing to capacity planning through delivery to the end customer. The X-System(R), a proprietary optimization engine, powers a family of planning and scheduling solutions, from the design of a global supply chains to crew scheduling, troop deployments, inventory optimization, and transportation procurement. In addition, INSIGHT provides optimization components, partnering with third party software providers to deliver best-of-breed solutions. Our software and services help design optimal supply chain networks that minimize costs and free up capital, streamline operations, maximize profits, and increase customer service levels. For more information, please visit us on the Web at http://www.insight-mss.com/.