Interim Management Case Study
This case study focuses on the benefits of using interim management to deliver synergies during mergers and acquisitions, whilst also managing "business as usual".
Delivering Purchasing Synergies During a Post-Acquisition Integration
More than half of all mergers and acquisitions fail to meet the expectations of investors, because of a lack of a structured approach to the integration of the merging/acquired business. Interim management enables the flexing of a team so that post merger or post acquisition synergies can be delivered successfully, whilst ensuring that "business as usual" doesn't suffer. The return on investment for the client is usually extraordinarily high.
Client
Global Commodity Chemicals Manufacturer
Assignment Type
Mergers and Acquisitions (M & A); Post Merger/Acquisition Integration
Duration of Interim Management Job
1 year.
Client's Return on Investment
More than twenty times or 2,000%.
Background to Interim Management Job
During previous mergers and acquisitions the client had developed a significant competence in successfully integrating acquired businesses. On this occasion, the client acquired four additional chemicals manufacturing plants from Shell, in the UK, France and the Netherlands, tripling its European manufacturing capacity. The incumbent European Purchasing & Logistics Leader wanted to concentrate entirely on delivering the targeted logistics synergies by integrating the logistics operations of the two businesses; a significant challenge in its own right, and in doing so he became the European Logistics Leader, leaving a vacancy for a European Purchasing Leader.
In previous mergers and acquisitions the client had used the strategy consultants McKinsey to support the delivery of purchasing synergies. However in this case the client decided to use an executive interim purchasing manager as the European Purchasing Leader to integrate the purchasing operations of the acquired business, implement a number of vital infrastructure improvements and deliver targeted post acquisition purchasing synergies.
Dimensions of the Mergers and Acquisitions Assignment
- Pan European
- $100m - direct spend
- $ 50m indirect spend
Executive Interim Purchasing Manager's Achievements
- Replaced McKinsey's usual role during the integration of purchasing activities. Client claimed $2m cost avoidance for this alone.
- Recruited additional interim members of the purchasing team
- Integrated European the purchasing operations of six chemical plants
- Implemented SAP 4.6 "Materials Management" (MM) module in all European plants
- Introduced purchasing cards
- Set up a major UK warehouse
- Held the first European supplier conference
- Base-lined pan European indirect/non-production purchasing expenditure
- Won business case for a new non-production purchasing organisation
- Delivered client's first pan-European category supply chain improvement project
- Delivered raw material savings 20% above annual target
- Had agreements in place to deliver targeted post-acquisition synergies after 12 weeks
- Presented with TWO formal awards from the client in recognition of achievements
- Supported the recruitment of the permanent European Purchasing Leader
Other
Because of the success of the assignment the client offered the executive interim manager the permanent role of European Purchasing Leader. The executive interim manager declined, preferring the particular challenges of interim management roles.
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