Companies urged to cut back-office overlaps

Companies should focus on cutting excess sales, distribution and support services when integrating an acquisition, according to Gary Turner, automotive specialist at consultant PricewaterhouseCoopers.

Speaking at a recent seminar in Birmingham for the automotive industry, he said: `When making an acquisition, get rid of the new back office and use the existing one to service the new business.

`Companies with manufacturing plant in several countries tend to have separate sales, distribution and support divisions in each location. This may have worked well for the past 20 years but it won’t work for much longer,’ he warned.

Turner believes manufacturers should centralise their back-office function into a single service provider for all their factories.

IT is the foundation of the new way of working, according to Turner, with advanced communications allowing many back-office functions, such as call-centre support, to be centralised across Europe. This creates economies of scale and cuts fixed costs, he added.