Acquisitions introduce many new challenges for manufacturers, layering additional demands onto already complex operations. To make these new challenges worth it, acquisitions must diversify portfolios by adding complementary services or products, increasing market share, and fostering healthy business growth.
Success hinges on effectively integrating the acquired business into the organization. However, established manufacturing facilities come with their own personnel and culture, processes and procedures, and systems and operational technology infrastructure.
So, how can acquiring companies integrate acquired businesses efficiently and smoothly without disrupting operations or production? Where should they start to make the most of their investment? Keep reading to find out.
People & Culture
Change management is a crucial yet frequently neglected aspect of integrating operations. For new processes, technology, or cultural shifts to be adopted, it’s essential to form a team that will champion the shared goal. This team should comprise not only management but also operators, supervisors, and technicians who have a deep understanding of daily operations and machinery.
It’s important to recognize that not all leaders have “manager” in their title. Employees often look to experienced peers for guidance and direction. These individuals take pride in their jobs and their company and are motivated to make improvements. They are often key to making impactful progress.
Once you’ve identified a well-rounded team, explain the purpose and planned changes, and how they can contribute. Through this process, you’ll discover their areas of expertise and knowledge.
As you embark on this journey, be mindful of locations that may suffer from “analysis fatigue.” This occurs when they’ve been through similar exercises multiple times without seeing any changes. It’s best to start at a site that is open to the process, receptive to change, and ready to take action. Achieving a quick win can also serve as a significant motivator for continuing efforts at other sites.
Processes & Procedures
The existing processes and procedures present a significant challenge during integration. Each organization has its own methods, including how they manufacture products, implement safety protocols, and maintain OT network security standards.
Organizations often have both formal and informal procedures, and adherence to these can vary. When standards are inconsistently followed, the result can be poor production outcomes and vulnerabilities, including risks like cyber-attacks.
For example, some facilities may still record downtime events on paper instead of digitally or lack a preventative maintenance program. These practices often lead to unplanned downtime and equipment failures. While such practices are common in older facilities, they present opportunities for improvement.
Addressing these gaps not only drives efficiency but also cost savings. Additionally, reducing the need for late-night call-ins can prevent burnout, frustration, and workforce depletion, contributing to a more sustainable and satisfied team.
Systems & Operational Technology Infrastructure
The next step is to understand the technical debt you’ve inherited. While you may be familiar with the business’s financials and the products or services offered, it’s crucial to know what keeps the plant operational. Understanding technical debt helps identify vulnerabilities and risks, areas for improvement to meet safety and other standards, and potential long-term cost savings.
Once identified, you can strategize about how to integrate the site(s) into your organization. This plan should outline which legacy systems need replacement to align with corporate standards, what new solutions should be added to the corporate library, and what might need to be deprecated. Reducing the number of systems to support, and thereby minimizing technical debt, is a positive step towards realizing ROI.
Key areas to evaluate in the technical environment include Enterprise Resource Planning (ERP), Manufacturing Execution System (MES) or Manufacturing Operations Management (MOM), HMI/SCADA (Supervisory Control and Data Acquisition) systems, and the equipment controls layer (e.g., PLCs).
A thorough analysis of these systems helps determine the age and condition of the equipment, identify any safety or security risks, and uncover existing vulnerabilities. It also reveals whether the systems comply with both company and industry standards and best practices.
This process allows you to document user and functional requirements, which are essential for establishing a foundation for integration activities. By identifying these factors and avoiding common pitfalls, you can significantly reduce monetary and time waste and mitigate the risk of rollout failures and disasters.
Ensuring a Successful Acquisition
By assessing the people, processes, and technology infrastructure of the acquired business, you gain a clear view of its digital maturity, which is crucial in the age of Industry 4.0, digitization, and enterprise connectivity. This understanding will help overcome the challenges of integrating a new manufacturing facility into your organization.
If you’re navigating a merger or acquisition and need clarity on where your operations stand, our team can help. We can assess your current state, identify the most critical areas for improvement, and provide a structured starting point for building an effective integration roadmap. Contact us to learn more.
