Strategic Procurement Approaches in Post-Merger Integration PPT

This PPT slide, part of the 106-slide Complete Guide to Post-merger Integration (PMI) PowerPoint presentation, outlines key considerations for procurement during post-merger integration (PMI), emphasizing the necessity of a structured approach to sourcing components. It presents a framework that categorizes procurement strategies based on the relationship between component similarity and supplier differentiation.

The left side of the slide lists 3 post-merger priorities for the procurement function: tactical integration aimed at enhancing net present value (NPV), quick cost-reduction initiatives, and longer-term design improvements. These priorities highlight the need for immediate action while also planning for sustainable enhancements.

The quadrant diagram illustrates 4 strategic options: Migration, Consolidation, Aggregation, and Competitive Tension. Each strategy corresponds to varying degrees of component similarity and supplier differentiation. Migration focuses on shifting to the lowest-cost supplier, which is a short-term tactic. Consolidation aims to match the lowest price among suppliers, suggesting a more stable approach. Aggregation involves transitioning from a common price structure to a design that prioritizes cost-efficiency over time. Competitive Tension reflects a longer-term strategy that necessitates adjustments in specifications and designs to optimize costs.

The slide conveys that the short-term goal of procurement during PMI should be the tactical integration of standardized components from a single supplier. This approach not only streamlines operations, but also ensures that the merged entity can leverage its purchasing power effectively. Understanding these dynamics is crucial for executives looking to navigate the complexities of procurement in a post-merger context.

This slide is part of the Complete Guide to Post-merger Integration (PMI) PowerPoint presentation.

This framework is created by former McKinsey, BCG, Deloitte, EY, and Capgemini consultants and details a robust framework to managing the complete Post-merger Integration process.

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