Operational due diligence for a cosmetics acquisition
Opyflow assessed the supply chain behind a consumer health and cosmetics acquisition. The buyer would inherit two dependencies: supply-chain knowledge that sat largely with partners outside the company, and one external provider the business could not quickly replace.
There was no clear answer on how much of its supply chain the target itself understood and controlled, or on whether its partners could carry the growth plan.
Opyflow mapped the whole supply chain. The main contract manufacturer was assessed on site and the main distributor reviewed.
Supply chain assessed end to end · Critical partner dependencies identified · Recommendation to proceed delivered
The challenge
Underneath the business's growth was an operating model an acquirer could not easily see into: about half the range made by contract manufacturers, the other half imported, an external distributor, manual processes and limited performance visibility.
Opyflow's work
Opyflow mapped the supply chain from sourcing and manufacturing through warehousing and distribution, then went to the two places where the acquisition thesis could break. The team tested capability, capacity, concentration and continuity on site at the main contract manufacturer and with the main distributor. Across the partners and the company, the review covered demand and material planning, inventory, master data, supplier management and quality agreements. It also took in the product-support processes a cosmetics business depends on: formulation, stability, packaging compatibility and change control. The findings were turned into risks and corrective priorities for the acquisition decision and the post-deal agenda.
What changed
Neither dependency was a reason to walk away, and Opyflow recommended proceeding. The acquirer went ahead knowing about both, with the corrective priorities on the table.
What did the assessment add to the acquisition decision?
It sorted the capabilities into those that would come with the company and those the buyer could reach only through partners. Where a contract manufacturer holds the product knowledge, the buyer takes on the relationship and the knowledge stays with the manufacturer. The corrective priorities were set on that basis.
See the capability: Rapid operational diagnostic and due diligence →
Related case studies
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