Consolidate or merge, a checklist
Equipment, facility and process issues
To consolidate or merge successfully, through choice or because it has been imposed by market forces, a company must properly integrate equipment, processes and facilities in the final entity. A well done facility project can create an effective, productive enterprise, maximize operating and distribution relationships, and achieve the original objectives. This checklist points out the major topics to consider.
In consolidation or merger, there are many management considerations to deal with other than facilities. But be sure to plan, and later integrate, equipment, processes and facilities because they affect not only the balance sheet but also future P&L results of the entity.
The following issues are often involved in facilities consolidation. Mergers are similar, built on the same framework. This article is a checklist of topics, but see also my article “Merger or consolidation; facility actions help it succeed” for elements of strategy. And when you are ready, Jackson Productivity Research Inc. will be glad to assist with the many details necessary for successful facility consolidation or merger both in the due diligence steps and later in implementation.
1. Background
In order to consolidate physically and integrate practically, the project team must clearly understand the strategic and logistical aspects of the project; strategy, scope and objectives, timetable, budget. Responsibility of the source facilities and of the destination facilities must be carefully set forth, and assigned to resources of the organizational chart after the change expected. At this point an appropriate plan should be established for both internal and external communications.
2. H. R. Issues
A merger by nature is likely to involve personnel actions. Address what H. R. actions will be taken to accomplish the financial objectives of the merger, what company policy is regarding the actions, and timetable for announcements and actions. Be sure to consider not only the final situation, but also the transition period.
3. Integrate electronic and manual systems of acquired company with existing company
Start with specs, part numbers, financial systems, inventory of product materials and supplies. Keep or change hardware, software, control systems? Location of final computer system and plan to reach the integration. Cutover plans for systems and communications.
4. Inventory plan during transition
Receive, use, store raw materials, ship products from multiple plants. Inventory drawdown to minimize shipment.
5. Customer relationships
Before, during, after to assure continuity of delivery.
6. Vendor relationships
Before, during, after to assure supply and minimum relocation.
7. Day to day operation
Source shut down plan, equipment transfer or dispose of, destination startup plan.
8. Status of destination facility
Physical characteristics of facility and grounds, capacities and limitations. Changes and timetable necessary to develop a more suitable facility.
9. Plan for relocation
Process and technology, equipment, inventories, administrative and support. Training plan for startup team.
10. Prepare the destination facility
Plan, modify or construct as needed. Add operators and train them.
11. Complete the relocation itself
Shut down, pack and ship
12. Start up the relocated equipment with the trained operators.
Jack Greene Jackson Productivity Research Inc.
Consolidate or merge, a checklist - To learn more about this author, visit Jack Greene's Website.
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Jack Greene
(Visit Jack's Website)
Jack Greene is president of Jackson
Productivity Research Inc. He writes about
practical business actions which even in
today’s economy will control and reduce
costs; plant layout; time study;
motivation; productivity improvement;
capacity, constraints, and utilization;
merger and consolidation of facilities;
cost justified relocation within or into
the US.
Jack uses his experience in dozens of
productivity improvement, work
measurement, cost reduction, and layout
projects; for large and small companies,
US and international, as a basis to share
insights. He recognizes that a business
must continue to satisfy customers and
produce quality product even while
controlling costs. The articles address
all businesses because they deal with
people and the elements of work; with
efficient facilities, tools and equipment;
with successful management practices.
Mr. Greene established Jackson
Productivity Research in 1991, and
previously headed division or corporate
industrial engineering for three Fortune
250 companies; ITT, Abbott Labs, and
Bausch & Lomb.
Jack Greene Jackson Productivity Research:
Productivity is our Middle Name jack@jacksonproductivity.com jac
ksonproductivity.com
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