Business integration projects are usually the result of an organisation identifying opportunities to grow their own business or consolidate to create a stronger fiscal position. This may be in the form of a merger, acquisition or takeover where a vertical business integration or horizontal business integration approach is reflected in the organisations strategic plan.
Whether the strategic direction is expansion for growth or consolidation for cost control, importance must be placed on synchronising information technology, business culture, business processes and business goals to support the new supply chain strategy.
A formalised business planning structure with a proven project management methodology incorporating project governance, project scope and business requirements are core components for a successful project. Depending upon the scale of an organisation, the business planning process can be simplified specifically for their project. The diagram above outlines the a number of paths an organisation could follow to vertically integrate with another organisation.
Vertical Business Integration
- Backward integration could represent a retail organisation that wishes to control their source of supply and product cost, by simply acquiring a primary vendor. Change can be limited to synchronising the procurement function and leaving all other business functions as autonomous.
- Forward integration could represent a manufacturer, with an existing warehouse capability, seeks to become a specialist in 3PL warehousing and distribution. Business integration is on a greater scale as all aspects of systems, business processes, and business culture will need to be blended or established.
- Optimum Business Integration is a combination of functions that will require complete or partial integration. A sub assembly manufacturer for a pharmaceutical company could be acquired where all aspects of the business can be consolidated within the pharmaceutical organisations premises. This would provide increased capability to respond to demand, manufacturing schedules and reduce inventory investment.
Horizontal Business Integration
Horizontal Business Integration project brings together organisations within the same competitive space that would seek to merge and create a larger enterprise with increased capability, market reach and financial strength. In this type of integration, there is a considerable level of duplication across all aspects of each organisation from ERP systems, business processes, resources and equipment. The challenge is to remove this duplication and introduce a single business standard for each area.
Its the overarching policies, regulations, processes, procedures, rules, responsibilities and protocols that control the life of the project. A framework for business integration that clearly defines the roles and responsibilities of all stakeholders, the existing state of the business (BAU) and the likely future business state after capital investment or other forms of investment that transform the business.
A governance model also embraces the methodologies, tools and standards for the organisation's resource pool. Modern governance models are a practical way of applying oversight for organisations decision making and change control protocols for effective business integration. A PMO (Project Management Office) is typically used by larger organisations to manage your business integration project.
A project scope statement is defined by the organisation after an extensive review of high level business requirements. As project scope documents can vary depending upon the type of project, the team should formulate the project deliverables and outline the core objectives against specific metrics which form the measurement criteria for the project. These are depicted in a milestone schedule and relevant costs associated for expenditure control.
Business Requirements Document
As a compliment to the project scope, the business requirements document represents a more detailed understanding of a future state solution and becomes the baseline for commercial contracts and variation management. The aim is to link the core items from the project scope document, undertake an AS-IS review, understand limitations/constraints and work towards a detailed design brief for the development phase. This is a typical phase for a systems project and will go through a number of iterations between project team members and relevant external parties.
A well structured, high quality business requirements document will determine the path of success for your project. Multi level collaboration will create a more favourable outcome during each stage of the project as people are being heard, their ideas formulated and can directly contribute to the final state solution. This is essential for managing large functional teams as the pressure will build around cost controls, time creep and scope creep issues that require escalation and resolution.
Testing and Implementation
All technology based projects follow rigorous compliance testing, verification testing and deployment protocols to ensure that what was designed will function as planned within a sandbox environment. Issue resolution continues to be managed as part of this sandbox testing environment to provide a clean and fully functional product. Cutover and migration planning supports the next phase of the project for deployment into a live environment as part of the change management program.
A Turn Key Solution offers your organisation the same opportunities to improve the health and direction of your supply chain, logistics function or warehouse operations. We provide supply chain assessment modules, process simulation, warehouse automation, business integration and quality supply chain resources for project management or interim support to build a sustainable supply chain for your organisation.
Supply Chain Assessment Modules
Select from our range of supply chain assessments and take the opportunity to validate your supply chain and logistics processes, practices, metrics and technology systems. We offer flexibility with our modular approach, content area focus at the right cost for your business. Our supply chain consultants, logistics consultants and warehouse consultants are experienced and will work through these assessments at your pace.
- Supply Chain Strategy Assessment (Develop a supply chain strategy that balances cost, service and efficiency within a dynamic market place)
- Supply Chain Planning Assessment (Sales forecasting, planning and execution for managing inventory investment for the business)
- Inventory Management Assessment (Manage inventory investment with the right tools and controls within your warehouse or distribution centre)
- Warehouse Management Assessment (Warehouse operation can increase throughput and efficiency with the right layout, storage and processes)
- Performance Measurement KPI Assessment (Supply chain capability increases with regular performance measurement focussed on the right areas)
- 3PL Outsourcing Assessment (Moving to an outsourced 3PL is a significant step & requires careful consideration, planning and implementation)
- Supply Chain Technology Assessment (The right supply chain technology mix will drive performance across the core areas of your supply chain)
Our supply chain consulting practice uses advanced 2D or 3D simulation modeling tool's to provide our clients with the latest process based integrated solutions to improve supply chain performance in real-time, identifying issues and bottlenecks within a virtual environment. Take a look at our supply chain simulation, logistics simulation, warehouse simulation and distribution network model.
Quick process wins are delivered much faster, while structural supply chain changes require capital investment in warehouse automation and distribution solutions for your operation. Advanced supply chain optimisation is the aim by integrating ERP, WMS or Manufacturing systems to achieve real time visibility.
Supported by a strong industry specialist network, we are able to meet the supply chain challenges your company is facing today. Strengthen your supply chain, distribution centre, warehouse or manufacturing facility with integrated warehouse automation systems and distribution solutions. Custom made materials handling, storage and retrieval systems range include: Conveyors, Fulfillment, Robotics, Packaging, Sortation, Shipping Systems, Software and safety equipment.
We also offer a comprehensive review of your warehouse operation to make sure that the right solution is identified, planned and implemented. Depending upon the outcome of the review, we also offer a range of services that support the final automation solution, namely: a warehouse layout and design service, warehouse process modifications, warehouse systems or a warehouse layout design for a specific area.
Business Integration and Consolidation
We assist organisations to create a "Right Sized Supply Chain Model" for their business. This may involve consolidating your supply chain network, merging multiple businesses, establishing a new warehouse facility or assessing 3PL viability and outsourcing options. Our experienced has contributed to delivering a range of quality supply chain solutions for our customers.
project management | interim management support
We provide a project management service or interim management support to assist any supply chain initiative. Qualified and experienced supply chain managers, warehouse managers, distribution centre managers and project managers are available to meet your interim project requirement needs or longer term resource placement strategy.