Gartner Research

Increasing M&A Activity in Life Sciences Requires Strong Supply Chain Leadership and Preparation

Published: 11 November 2015

ID: G00290860

Analyst(s): Stephen Meyer, Jan Kohler

Summary

Merger activity in life sciences continues at a rapid rate, and companies involved often differ in core technology and corporate culture. This adds complexity, and means chief supply chain officers and integration leaders must be well-prepared in advance of activity involving their companies.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Mergers and acquisitions in the life science industry have increased in frequency and size, driving CSCOs to seek ways to improve supply chain integration capabilities to deliver synergy benefits
    • Ensure supply chain is well-represented in due diligence activities
    • Build close relationships with colleagues responsible for M&A strategy and execution
    • Prepare by assembling tools, drafting teams, and creating what-if scenarios, and project plans
    • Prioritize communication with your team to minimize disruption on supply chain talent and organizations
  • Increasing complexity of life science mergers requires supply chain integration leaders to follow a structured path to integration
    • Determine which of the four types of acquisitions your situation is most similar to
    • Keep an open mind and consider best practices from all sources involved in the integration
    • Leverage demand-driven supply chain self-assessments to provide high-level guidance to the integration
  • High expectations to deliver deal value through synergy cost savings and revenue growth can pressure supply chain integration teams to be too aggressive with savings and timeline estimates
    • Set realistic synergy expectations, and resist pressure to overcommit or overstate timing and impact
    • Emphasize customer-facing activities to avoid disruption to order fulfillment and revenue capture
    • Understand the regulatory impacts of changes, and establish timelines accordingly

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