Originally Published MX January/February 2004

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

A medical diagnostics manufacturing company acquired a smaller diagnostics manufacturer in order to gain access to several key technologies developed by that company. To integrate the two enterprises successfully would involve combining the supply chains and manufacturing operations of both, and rethinking overall operations strategy. A consulting firm helped the acquiring company to make adjustments in all five of the operational levers discussed in the article so as to realign its supply-chain strategy with its new order of operations.

Supply-Chain Configuration. The new, larger company reviewed all manufacturing operations and key technologies, identifying and eliminating a number of duplicate sourcing and manufacturing operations. These changes resulted in an 11% reduction in total manufacturing costs for the combined entity.