Industry 4.0 Technology Integration Is Key to M&A Success

Industry 4.0 Technology Integration Is Key to M&A Success

Mergers and acquisitions (M&A) attracted big headlines in 2022 with nearly 50,000 deals globally. Considerably less attention, however, was paid to the importance of integrating supply chain technologies for M&A success. Consider these all-too-common examples:

  • A U.S. automotive component manufacturer is running separate systems to manage production in its facilities more than a year after its latest acquisition.

  • Businesses acquired by a consumer packaged goods company have yet to integrate supply chain technologies with the parent company.

  • A global manufacturer that has experienced several mergers finds siloed data from the acquired companies a significant roadblock to scalability.

More than 90% of respondents to a Deloitte survey believe M&A outcomes are highly dependent on effective transformation planning and execution. Focusing on digital transformation early in the process allows technology to play an even greater role in improving process efficiency and effectiveness of the merged organizations.

“M&A can provide companies with much-needed digital capabilities even when they’re not the centerpiece of a deal,” according to McKinsey. “Proper due diligence not only enables companies to identify potential sources of digital value in a deal but also provides the groundwork for effective integration.”

Industry 4.0 provides enterprise-wide visibility

Industry 4.0 is based on a digital convergence of operations, in which processes and data can be integrated across multiple supply chains and product life cycles. It can be a powerful enabler for organizations of all sizes, and in all industries, as they make strategic acquisitions for growth and efficiency.

Manufacturers of global brands with complex supply chain challenges benefit most from the use of integrated solutions with an end-to-end view across their entire enterprise. Whether it is planning strategy, material procurement, order allocation, or warehouse and container management, real-time insight into the supply pipeline through intelligent solutions and software can form the basis for more efficiency and productivity for manufacturing operations.

Modern APS systems, for example, can process information in real-time give planners an up-to-date picture of the demand situation or make the current capacity utilization transparent for transportation planning. Planning changes from one business unit can alert planners in other units immediately. Imagine the benefit of seeing sales orders as they come in, monitoring the supply of parts in real time, and comparing inventories, shipments, and production on a detailed dashboard that allows planners across the enterprise to drill down to the parts level to identify potential problem areas.

Having the information at decision-makers’ fingertips is particularly important in aligning an enterprise, enabling teams to have access to the same real-time information and work together more collaboratively to make the right decisions, at the right time, for the business.

Cloud-based solutions for smoother integration

The modular structure of networked cloud-based solutions can speed up implementation and simplify operations by reducing the data silos that are so common following a merger or acquisition. Cloud solutions can help planners visualize the entire operation with one dashboard. This is especially important for companies with multiple locations across different geographies or those with complex, decentralized organizations.

In addition to providing cross-enterprise visibility, solutions that integrate with Microsoft Azure, AWS or other popular suppliers of cloud services can be a catalyst for bringing disparate organizations together under one technology umbrella due to their widespread familiarity.

To stay competitive as supply chains, technologies, and consumer and market expectations change, industrial manufacturing businesses must embrace new technologies, says PwC. With M&A activity projected to rise in the second half of 2023, organizations should seek industry 4.0 solutions that drive value from their strategic acquisitions through smoother, more seamless integrations.

If you want to learn more get your Guide to Industry 4.0

In this Guide you will learn:

  1. Key facts about Industry 4.0
  2. Benefits of implementing the Industry 4.0 framework
  3. How your company can move to the future of the supply chain industry