Now that the economy appears to be recovering, more and more companies are looking at mergers and acquisitions as a means of further reducing costs, expanding markets, and creating possible synergy.
In a study, Multi-product Horizontal Supply Chain Network Integration: Models, Theory, and Computational Results, published in the International Journal of Operational Research, (2010), vol. 17, pp. 333-349, we developed a framework for the identification of potential synergy associated with network integration in the case of multi-product firms. The perspective was that of system-optimization and total cost reduction associated with the sharing of resources, such as facilities (from manufacturing plants to distribution centers) within a general supply chain network framework.
The study was conducted with two of my former doctoral students, who are now professors at Business Schools: Dr. Trisha Woolley, who is a Professor at Texas Wesleyan University, and Dr. Patrick Qiang, who is a Professor at the Penn State Great Valley Campus.
The network approach that we developed can be applied to assess the potential synergy a priori of different potential mergers and acquisitions, from airlines to consumer product companies and even financial services and oil companies. Since the perspective is that of system-optimization, the tools can also be applied to the assessment of teams as in the partnering of organizations in humanitarian logistics operations.
The paper is also available at the Virtual Center for Supernetworks website.