Resumen de Mergers impact on supply chains in ramp-up and mature industries: preliminary system dynamics simulations
Olli-Pekka Hilmola, Andreas Norrman, Lauri Ojala
Merger mania in the manufacturing related industries is going to continue, as companies tend to shift to compete in global scale. This phenomenon has been around for decades, even if the motives for it have changed during the years. For example, in the 60�s the motivation for a merger was possible diversification of business areas. During 90�s it has been totally opposite, companies are concentrating to their core competencies and then horizontal merger is the major form of integration. Despite of these paradigm-shifts, synergies have been expected to appear during different times in joint purchasing, distribution, marketing, administration, product development and/or production. However, several empirical studies have already shown that these benefits are not easily realizable and most often performance before merger is better than after.
The purpose of this paper is to analyze further, how synergies are going to be realized in the horizontal merger of two equally sized supply chains. The used system dynamics model consist two phased production (primary and secondary) structure as well as physical distribution to markets. Approach is tested in the following two different situations: (1) when demand exceeds slightly average throughput of separate or merged supply chains (ramp-up industry) and (2) vice versa when demand is slightly below average (mature industry). According to preliminary simulation results (including only single simulation run), it could be concluded that there exists justification for the merger activities in the supply chains, but synergies do not appear in the consequence of merger. Decisions set by the management will give significant influence on the results.
