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Jump Start Savings Initiatives

Procurement is the source of significant cost synergies in a merger. Determining purchasing synergies in the pre-merger phase will result in savings much sooner after the merger is completed. In a typical merger, a procurement analysis focuses narrowly on the economies of scale made possible by acquired spend. Companies presume that more volume automatically equals better price. In a Jump Start Savings Initiatives, integration teams look at best practices and negotiation strategies that lead to better prices.

Our process enables organizations to realize synergies and savings immediately after change in control.


  • Best supplier pricing
  • Gain external perspective on best practice and prices
  • Identified synergy areas by spend pool
  • Implementation/ sourcing wave plan
  • “Quick Wins”, “Standard Sourcing” and “Complex Sourcing” projects identified
  • Launch kits and project charters for priority projects
  • Spend baseline for the combined entity
  • Synergy benefits realization from the merged companies begins on the first day of the newly merged company
A.T. Kearney’s JumpStart methodology involves two key components: Assessments and “Synergy Summits’.

Assessments
  • Build combined spend profile based on category tree and contractual constraints
  • Interviews and/or workshops with select supply managers to validate data and understand company specific context
  • Analyze like item pricing and evaluate ‘quick win’ opportunities
  • Refresh merchant / captive split for those products currently being sourced from both companies
  • Identify priority spend pool areas
  • Develop benefit targets based on market conditions and benchmarks
  • Develop ‘wave plan’ to evaluate synergies across the combined spend pool, globally
Synergy Summits
  • Joint, face-to-face workshop with Supply Managers, Category Leaders and Directors from both companies
  • Business and/or functional stakeholders as appropriate
  • A synergy summit will be focused on one Commercial Area or Category, based on complexity of spend and opportunity
  • Identify synergy areas, prioritize initiatives and develop implementation plan
    • Quick wins
    • Rapid sourcing projects

 
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