The joy of new neighbours
Jasper has left me another parcel, right between the rose bush and the daffodils. Now and again, I come across his unpleasant and unwanted gifts. Jasper is our new neighbours' cat. Our old neighbour did not have a cat. I miss our old neighbour.
We tend to focus on the financial aspects of house moves. What we never know in advance is what it will be like to cohabit with the new environment. How many more cars will the new family bring to the street? How tall a fence will they put up or take down between us? How many cats do they have?
I guess the supply chain people at Kraft and Cadbury feel the same right now. At planning and operational levels, it is like having a new neighbour. There's a lot of unknowns, with the only certainty being that they will have to live close to one another from now on. Whether your company is taking over a business or whether you are the one being taken over, the deal is in financial hands at first. The reality of planning process integration, systems compatibility and general supply chain structure only reveals itself afterwards and often slowly. For example, you may end up with a demand planning process working on a 12-month rolling horizon at stock keeping unit level, which you must now try to connect to a top-down budget-driven forecast. Hours of fun!
Surely the steps followed after a merger or takeover are simple. First, independently evaluate which firm is closer to best practice in supply chain planning; use the best models to set new group standards; then roll out these improvements across the other businesses. Thus, everybody is happy.
Who am I kidding! Acquisitions may start well. But most end up imposing the processes used by the many on the few, because it's quicker. It's a crime, as aside from missed chances for continuous improvement (and so savings), this creates huge frustration among the supply chain practitioners.
Talking of frustrations, where is that cat ...?
Hugh Williams is founder of supply chain planning specialist consultancy Hughenden. www.hughenden.net
