Turbulence in the global economy in recent years has caused uncertainties across the in the merger and acquisition market, which witnessed stagnation in 2023. Yet despite these challenges, thanks to falling interest rates and a renewed sense of business optimism, the outlook for M&A is positive.

The sector has experienced a resurgence of activity in recent months. Businesses looking to improve balance sheets, expand into new markets or simply improve their operations are increasingly turning to M&A as a solution. However, the process can be complex — not least for supply chain and logistics operations which, by nature, comprise many moving parts. Businesses often face a limited period of time for conducting due diligence prior to conclusion of the deal.

Following is a four-step approach to ensuring a smooth post-M&A supply chain integration, and setting up the new entity for success.

Conduct a comprehensive post-M&A assessment. It should focus on identifying any gaps that might have been overlooked in the often short due-diligence phase. Business leaders may find that the buildup to M&A can be a whirlwind of contract signing and getting the finance and legal aspects right, which can result in critical operational areas being overlooked. It’s essential to pinpoint these blind spots — whether it’s the need to restructure staffing, adjust supplier networks, or overhaul IT systems to cope with new capacity — and address them in a comprehensive post-M&A plan.

The assessment should also highlight any potential synergies on which M&A can capitalize. This means identifying opportunities to avoid duplication, streamline operations, and consolidate suppliers or third-party logistics providers. Such actions can enhance operational efficiency, reduce costs, and increase revenue.

A post-M&A integration roadmap should then be developed, detailing specific actions, timelines and accountability measures to ensure that synergies are identified and deployed to their maximum potential. This plan should also clearly establish the desired outcome of the deal, with strategies in place to monitor specific targets. 

Delegate responsibility. The human element of post-M&A management is one of the most important — and sensitive — parts to handle during the transition period. At the end of the day, all elements of a business are ultimately managed by people, from technology and transport to procurement and finance. Employers should not underestimate the amount of attention needed in this realm.

Responsibilities should be delegated, with talent retention prioritized where possible. It’s likely that there will be some impact on personnel, with the potential for job losses or culture clashes between distinct teams coming together. Furthermore, there may be individuals whose job role increases in importance or responsibility. In some cases, depending on the size of the integrating enterprises, the creation of a designated integration team is a good idea to oversee integration.

One option for particularly large or complicated projects is undertaking a phased transition period. This involves retaining duplicate systems and overlapping teams to allow time to navigate contract exits and negotiate new ones. Such an approach facilitates the gradual integration of logistics networks and supplier relationships, taking employees along the journey, supporting operations, and ultimately leading to a more efficient, resilient and unified supply chain.

Prioritize communication. This plays a critical role throughout the integration process. Communicating with employees, suppliers, and 3PLs is imperative for a smooth transition period. It can involve establishing further channels for open communication, along with regular company-wide updates.

All individuals and entities should feel engaged with, respected, and supported throughout the transition.

Evaluate targets and look to the future. Now it’s time to return to the initial M&A plan, and evaluate whether the newly acquired entity is fulfilling its initial objectives. For larger entities or those with a considerable number of employees, a post-M&A survey is a good idea at this point. Said survey should identify any operational hitches, missed opportunities for collaboration, and general areas for improvement. With a bit of adjustment and communication, these wrinkles can be ironed out, and a newly merged entity can look to the future, reaping the benefits that M&A has to offer. 

Business leaders who follow these four steps post-M&A are on the road to a smooth integration. This approach not only helps to mitigate risks and capitalize on synergies, but also sets the foundation for long-term success. 

Phil Reuben is executive director at SCALA.