Private Equity’s big bets are paying off with supply chain automation initiatives

How private equity is delivering attractive investment return value with supply chain automation

By Eric Bragg and Ben Bacon

The unprecedented scale of supply chain disruptions has exposed massive operational gaps. Operations became more costly, and systems lacked flexibility to address the troubles effectively. To solve this puzzle, stakeholders are urgently reexamining current strategies, capabilities, risks and opportunity areas to significantly streamline supply chain operations.

Supply chain automation is in its infancy with huge growth potential. Smart investments in modernizing outdated systems and modifying dysfunctional business processes are driving big results in the form of improved supply chain management and planning capabilities. The impact is significant, not only in near- and long-term operational performance but also in how these investments and related initiatives are really contributing to EBITA growth.

Where Private Equity is seeing investment value returns

Leveraging supply chain technology to strengthen the resilience of supply chains is driving significant operational efficiency gains, flexibility, and improved visibility.

For example:

• Robust data, analytics and related reporting is providing organizations increased visibility into the supply chain, putting companies in a much stronger position to anticipate potential disruptions and minimize costs.
• Process automation provides the ability to improve connectivity across networks, allowing the value chain to quickly respond to demand fluctuations, changes in production and distribution. Improved information sharing in real time helps drive more-informed decision making, as data associated with demand, inventory, and capacity is coordinated and shared.
• Improved supply chain automation significantly improved customer experiences with the ability to manage expectations more effectively. As growth in e-commerce continues to increase, so will the consumer and commercial demand for visibility and control over delivery of goods and returns.

Summing up

Attractive returns on supply chain automation investments are being realized through a combination of best-practice adoption and advanced technologies that are effectively reducing dwell and detention expenses, improving forecasting, lowering inventory costs, and delivering more consistently positive customer experiences. When effectively implemented, these initiatives become an integral part of the fabric of an organization and their critical supply chain network of partners. This builds a level of resilience that will allow organizations to weather future disruptions more effectively and build more long-term, sustainable value for their private equity firm owners.

Eric Bragg is a Senior Managing Director with Infor’s Private Equity Practice. Eric’s 30-year career in private equity includes roles as Managing Director at Deloitte Consulting’s HCM and SAP practices. As Alliance Director at Kronos, he collaborated with colleagues to establish private equity as a channel.

Ben Bacon is a Senior Managing Director with Infor’s Private Equity Practice. In his 20-year career, Ben has worked alongside hundreds of brands as a member of a variety of advertising agencies, global technology companies, and software leaders. He is in his fourth year with Infor, where he helped establish the analytics practice for private equity.