Why a post merger integration strategy must include a strong maintenance plan

Mergers can be a hectic time, especially when it comes to facility maintenance planning. They require that companies compare and consolidate lists of information on all facilities and industrial assets, not to mention lists of employees, job functions, suppliers and more. Redundancies must be eliminated, decisions regarding repairs versus replacements must be made, and valuable assets previously belonging to one company must be maximized for the other.

The newly formed company needs to determine the best strategies for cost savings. As supply chain expert Gary Marion pointed out, one of the largest sources of potential cost savings during a merger is combining supply chains. An important aspect of combining supply chains is creating a maintenance plan that makes sense for all facilities involved.

Supply chain efficiency is key in post-merger maintenance planning

Most companies have a core business model that does not focus on their warehouses, truck fleets or manufacturing facilities. Rather, these assets support the core business, which includes the products being sold and customer acquisition and retention.

Despite this, any company that specializes in physical products will tell you that supply chain efficiency matters. If your manufacturing plant pushes products out too slowly, maintains convoluted or messy warehouse operations or suffers from other major issues that prevent products from reaching your customers, you will definitely experience an adverse impact on your company’s bottom line.

As such, closely examining the many facilities and assets across both companies is critical to ensuring a smooth and successful post-merger integration. In comparing newly combined assets, don’t forget to compare maintenance schedules. Collect service histories for each asset, then determine which pieces of equipment were serviced last and why. This will help you decide which pieces need an inspection or repair in the near future, which don’t and which may need replacing.

Examining risk when integrating facilities and assets

Every company has different needs when it comes to facilities and physical assets, and every newly formed organization will approach these assets differently. It’s important that the final result of a merger is a well-functioning system of facilities and assets that doesn’t drag down the new business model. Leadership must ensure all warehouses and facilities are working efficiently, examining everything from the types of equipment used at these locations to their current condition to their service histories. Modernizing and bringing facilities up to code may be in order.

One example is the merger of Whole Foods and Amazon. The deal gave Amazon access to Whole Foods’ 465 physical stores. Using these physical locations, Amazon was able to push and promote its own products. Plus, more physical locations that are within a short distance from its consumer base can only benefit Amazon’s promise for fast delivery.

“Merging companies must ensure their existing facilities can meet growing demands.”

However, for Amazon and Whole Foods to both benefit from the deal, all acquired facilities must be properly equipped to handle various aspects of the newly formed company. Although making space for new products on in-store shelves, for example, isn’t the most complicated task, in other situations where major components will need to be added to facilities, such as a factory taking on new items to manufacture, it’s critical that all equipment and supporting assets are in good condition.

Additionally, merging companies must ensure their existing facilities can meet the growing demands of the new company. According to Retail Dive, foot traffic in Whole Foods locations increased 25 percent within the first two days following the acquisition. If a store isn’t designed to support additional customers, employees, equipment or inventory, it could become a challenge that must be addressed.

A major reason Amazon was interested in Whole Foods in the first place was because of the store’s success in the food industry, a scene Amazon had had its eye on for some time. But with the new industry comes new needs, namely in the form of cold storage. In any merger that involves taking on a new type of storage or aspect of the supply chain, partnering with people who are experts at that unfamiliar part of the new business. Maintenance planning professionals like Miner can help businesses in similar situations get up to speed and help them ensure their new facilities are in top condition.

Ensuring consistent maintenance at acquired facilities

Not every issue that comes up as a result of the merger will be predictable; company cultures may clash, or pricing strategies may differ significantly. However, there’s one thing that every company has in common, no matter how different they appear: facilities that require regular maintenance.

During the hectic buzz of merging forces, having a maintenance plan and partner already in place can make a big difference. Turning to experts such as those at Miner can pave the way to having a core set of well-functioning facilities.