This post showcases how a business performance improvement plan, when coordinated with ERP evaluation, is an effective strategy for manufacturers going through an acquisition.
In our work with US-based mid-market manufacturing and distribution companies, we often speak with companies that are heading into an acquisition. Typically, the acquiring entity might be a venture capital firm or a larger parent company, looking for the right business performance improvement plan.
In the case of manufacturing venture capital firms, acquiring targets can include manufacturing companies in a range of sectors – from pharmaceutical or food processors to fabrication and metalworking operations.
We’re seeing an uptick in this type of activity as domestic manufacturing becomes increasingly more attractive than offshore operations, due to cost spikes in material costs, labor rate fluctuations, and transportation costs coupled with the fact that extensive lead times can be a critical factor for making or losing the sale.
As independent ERP consultants, our team serves as a valuable resource to venture capital firms and parent companies as they consider the best strategies to maximize the valuation of their investment — especially for venture capital firms looking to restructure the companies to optimize financial performance via a business performance improvement plan.
Ultra supports Business Performance Improvement plan efforts through our proven methodologies, which are proven to set the new acquisition on a path of transformation in a systematic fashion that maximizes return on investment (ROI).
A Business Performance Improvement Plan to Maximize Efficiency
Ultra’s business performance improvement plan methods are designed to drive improved efficiency across the entire scope of business activities including: operations and production, supply chain, transactional activities, sales, service, engineering, distribution and ongoing customer satisfaction.
Ultra’s depth of expertise and execution model can help the acquisition set the course for achieving new levels of profitability, margin, and growth.
It’s important to consider that ROI is realized from process enhancements made possible by effective implementation of ERP software.
A well-managed ERP project focused around the right business performance improvement plan, including targeted selection, insightful negotiation and experienced implementation, can be a continuing source of cost savings and operational improvements, both of which help companies survive and thrive by maximizing their valuation and performance potential.
Focus must expand to include ROI of ERP projects in order to justify continued investment and maximum benefits, and a thorough business performance improvement plan project helps make the justification.
If it’s business integration that is needed, Ultra has a proven track record for harmonizing the “future state” processes according to best practice, and driving performance improvement along with the inherent efficiencies of operating with a consistent technology infrastructure and ERP business system framework.
With acquisitions comes change. Managing change is of critical importance and can make or break a business transformation initiative. Ineffective change management activities can cripple an acquisition and severally impact and devalue the parent company’s investment portfolio. In these situations, key resources become uncertain, frustrated, and often times leave with the necessary “tribal knowledge” required to maintain existing business activities.
Ultra’s Change Management services and expertise are designed to ensure the “people” assets are well maintained and continue to deliver the expected results that made the company an attractive buy from the beginning.
Business Process Improvement Plans and ERP: Looking Further
As investors continue to acquire manufacturing enterprises — whether in automotive, aerospace, food processing, distribution, retail, or other sectors — it becomes increasingly important to work through effective BPI and change management efforts.
When these key considerations are kept in mind, strategic use of BPI, change management and independent ERP expertise helps fuel the growth of VC-backed companies.
Please contact our team to explore these issues further. Download the timely white paper “A Roadmap for Business Performance Improvement” for a further look at what it takes to drive business performance improvement.