2007 has got off to a great start – the weather in the North East US is unseasonably warm and people are not complaining although there is underlying concern about "global" warming. It’s interesting that we have started looking at weather with a "global" perspective. Switching gears, I just finished a research paper on global alliances and innovation in high tech -high change sectors. High tech sectors like biotech,pharma,certain types of engineering involve lots of trials and rapid change. Global alliances have become a particularly useful and flexible organizational option to deal with expert knowledge domains on a "short term" basis. Joint Ventures (JV’s)have become less favored organizational forms because of rigidity ,high failure rates and the need of partners to fight over "control". Thus 90’s have seen a decline of JV’s and a rise in alliances. With the growth in Internet and web based "visible" global supply chains the demand for supply chain visibility can now be met.
Mergers and acquisitions on the other hand are driven by all kinds of reasons that look financially good (say one partner has valuable real estate,great scientists, a great new product pipeline) with one big downside. Merged organizations have huge management problems including managing combined personnel and supply chains. M&A’s are therefore the opposite end of a working alliance in terms of being able to make the supply chain work in a non-duplicated and integrated fashion. Things become more challenging when prior due diligence does not have Supply Chain integration as a top priority as this report by Robert Malone suggests. I tend to agree with Jay Welsh of Accenture when he says that Supply Chain executives get involved after the merger deal is done. It’ll be nice to know how many acquiring companies really provide for adequate money and time that is required to integrate global supply chains particularly with multiple locations in multiple countries.