When companies increase focus and resources on core capabilities to improve their service offerings and increase shareholder value, divestitures can often occur as a result. Divestitures are major transitions that impact all areas of a business, including supply chain reliability and efficiency.
With today’s increased regulations, unstable market conditions, and capacity concerns affecting shippers, it can be challenging for a newly divested company to sustain supply chain performance.
In our recent Whitepaper: Overcoming the Challenges of Divestitures in Chemical Supply Chain Performance, we discuss in detail the impacts that divestitures can have on the chemical supply chain and the strategies you can impart to lessen the impact, including leveraging your 4PL.
Here, we’re giving you some of the highlights.
Third- and fourth-party logistics (3PL and 4PL) partners are often fully ingrained in the divested company’s supply chain. Chemical companies, specifically, that must abide by stringent regulations and compliance standards, often rely on this partner even more. With knowledge of the company’s warehousing, transportation management, freight rates, analytics, and more—a 3PL or 4PL can help the newly divested company ensure a seamless transition with sustained supply chain performance.
An existing 3PL or 4PL offers the newly divested company:
- Immediate expertise and support in areas where a divested company has lost talent and insight
- Valuable carrier relationships and advanced knowledge for optimizing supply chain performance
- Input on best practices based on experience with similar transitions with other shippers
- Assistance with rapidly evolving shipping requirements, domestic and international
- The potential opportunity to convert a significant portion of operating costs from fixed to variable
M&A activity is a common business tactic and logistics services companies are involved with divestitures all the time. They likely have a process with tips for transitioning the company. Our new Whitepaper walks you through the four steps that any successful divestiture rollout should have, including:
- Assessing “New World” Needs, Requirements, and Capabilities
- Leveraging the Support of a Transitional Service Agreement
- Developing a Customer-Centric Supply Chain Model
- Integrating New Model, Reviewing Progress, and Improving Performance
These steps not only set up an organized support structure for a successful transition but allow both organizations to achieve their divestiture goal: to focus more strategically on high-growth assets.
Are you a newly divested company or about to be one?
As you prepare or work to strengthen your newly acquired asset, feel relieved knowing you have a knowledgeable 3PL or 4PL partner on your side. Then, read our Whitepaper: Overcoming the Challenges of Divestitures in Chemical Supply Chain Performance for a complete understanding of how a logistic services partner can help you capture your full divestiture value.