WEEKLY NEWS


NEW LOOK, SAME SUPPLY CHAINS


BY Anastasiya SIMSEK


MERGERS and acquisitions (M&A) can be transformative for businesses, providing pathways to new markets, strengthened balance sheets, and operational synergies. Yet, behind every successful merger lies a complex and often underappreciated task: integrating supply chains. “At SCALA, we’ve worked with countless businesses during M&A


transitions, and one thing is clear: the supply chain is where value is realised—or lost,” Phil Reuben, Executive Director at SCALA, said. “The decisions made during integration can either amplify the benefits


of a deal or create inefficiencies that haunt a business for years.” One of the most intriguing aspects of post-M&A supply chain


integration is the human factor. “People often underestimate the cultural challenges,” Reuben noted. “You might have two organisations with completely different ways


of working, and those differences can quickly lead to friction. One company might value agility and informality, while the other relies on rigid processes. Bringing those cultures together takes more than a top- down directive; it requires communication and genuine engagement.” The operational challenges, however, are just as daunting. “Time is


02


rarely on your side,” Reuben said. “During M&A, initial due diligence often skims over supply chain details. Once the deal is closed, gaps become glaringly obvious. It’s not uncommon to discover overlapping suppliers, redundant warehouse networks, or incompatible IT systems. These issues can lead to inefficiencies and increased costs if not addressed


swiftly and strategically.” One of SCALA’s most impactful interventions occurred during the


acquisition of a UK snacks brand by a German group. “The client came to us needing clarity on logistics scenarios and their


associated costs,” Reuben recalled. “We conducted a deep dive into their supply chain, exploring the financial and operational implications of every decision. Ultimately, we identified over £2 million in logistics savings and uncovered capacity constraints that needed immediate action. It was a stark example of how supply chain planning can turn a good deal into a great one.” Communication with suppliers is a critical success factor during


integration. “Engaging suppliers early is non-negotiable,” he stressed. “When two businesses merge, it’s not just about cutting costs;


it’s about finding the right partners to move forward with. Whether you’re consolidating suppliers, renegotiating terms, or onboarding new partners, transparency is key. Suppliers need to trust the new entity, and that trust comes from clear, consistent communication.” But what happens when contracts need to be terminated or


transitioned? Reuben advocated for a phased approach. “Wherever possible, gradual transitions reduce risks. If you’re


bringing in new suppliers or logistics providers, a phased rollout allows for smoother


integration. However, there are times when speed is


necessary, particularly if a legacy supplier isn’t equipped to meet the needs of the new organisation. Flexibility is critical.”


Another pivotal challenge lies in IT integration, a notoriously complex


aspect of M&A. “IT systems are the backbone of modern supply chains,” Reuben explained. “The decision to integrate, replace, or retain systems must be made


early, ideally during due diligence. Poorly managed IT integration can lead to everything from data loss to operational bottlenecks.” SCALA advises businesses to focus on seamless data migration,


comprehensive training, and robust cybersecurity as foundational elements of IT integration. The environmental dimension of supply chain consolidation is also


gaining prominence. “Today, companies can’t afford to overlook their carbon footprint,” Reuben said. “When we conduct post-M&A reviews, we’re not just looking at costs


and efficiencies; we’re also evaluating sustainability. Streamlining transport operations, for example, can significantly reduce emissions, which is a win for both the planet and the bottom line.” For businesses navigating the complexities of post-M&A supply


chain integration, Reuben offered three core pieces of advice: conduct a thorough audit, prioritise communication, and monitor continuously. “The audit reveals where the risks and opportunities lie.


Communication keeps everyone—from employees to suppliers— aligned. And monitoring ensures you can adapt to any challenges that arise during integration.” Ultimately, the supply chain isn’t just a backend function in M&A; it’s


a strategic lever that determines whether the promises of a merger become reality. “If you get the supply chain right, you can achieve incredible results,” Reuben concluded. “But if you get it wrong, the costs can spiral quickly. For businesses


embarking on M&A, the supply chain should never be an afterthought— it’s the foundation of your future success.”


Did You Know ? THE FIRST AIRLINE BY Michael SALES


On 7th October 1919, a group of Dutch investors,


including Frits Fentener van


Vlissingen, founded Koninklijke Luchtvaart Maatschappij, better known as KLM, with Albert Plesman appointed as director. KLM’s first endeavour with a De Havilland DH-16 was to fly from London to Amsterdam carrying two British journalists and some newspapers. During 1920, KLM transported a total of


440 passengers and 22 tonnes of freight, followed in 1921 by scheduled services with Fokker F.II and Fokker F.III aircraft. On 1st October 1924,


the


Batavia which continued up to the outbreak of World War Two in 1939. Cargo has always played an important


part in the development of KLM’s business mix, especially animals. The first animal was transported in 1924, when a bull named Nico flew from Rotterdam to Paris to avoid the foot and mouth epidemic. KLM was the leading combi user and, from


1971 operated Douglas DC-8 combi aircraft from Schiphol Airport, serving Amman, Anchorage, Bangkok, Brazzaville, Chicago O'Hare Airport,


Airport, Houston Jakarta,


fledgling


KLM's first trial intercontinental flight with a Fokker F.VII took off from Batavia, now Jakarta.


In September 1929, scheduled services started between Amsterdam and Johannesburg,


simultaneously. Combi aircraft usage grew into the 1960s


and 70s, with the 747-200M, one of the first combi aircraft produced by Boeing, followed shortly by the -300M and -400M. By 1977, 40 Boeing 747s had been adapted for combi capability. The B727 and B737 combi aircraft were also in use. KLM retired its last 747-400M combi


aircraft in 2020. Today, the Air France/KLM group, serves 295 destinations.


Intercontinental Kuala


Lumpur, Mexico City, Montreal, New York City JFK, Singapore, Tehran, Tokyo, Tripoli and Zürich. Airlines like Northwest Orient, Air France also


Lufthansa operated Douglas DC-7 combis to transport passengers and cargo


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ACW 16 DECEMBER 2024


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