From 24 Months to 16 Weeks: Fast-Track M&A SKU Integration

The Accumulated Product Data Debt

Industrial manufacturers aren't monolithic entities. They're the result of decades of organic growth, acquisitions, and regional expansion. Each phase adds another layer of incompatible product coding:

• Original operations (1970s-1990s): SKU structure designed for mainframe batch processing, organized by manufacturing plant
• First acquisition (1998): Competitor's product codes follow completely different logic, never harmonized
• ERP implementation (2005): New codes created for SAP/Oracle, old codes maintained in parallel for customer compatibility
• European expansion (2012): Regional offices create local SKU variants for compliance and customer requirements
• Digital transformation (2020): E-commerce platform needs modern product hierarchies, legacy SKUs don't map cleanly

The result: multiple overlapping SKU structures, none authoritative, all required for different operational contexts. Then you acquire another company with its own 30-year accumulation.

Seven Ways SKU Chaos Destroys Value

1. M&A Integration Paralysis

Post-acquisition integration depends on matching products between systems. When SKU structures are incompatible, everything stalls:

The financial model assumed 6-month integration. Reality: 24 months. The delay costs more than the mapping work itself - lost synergies, prolonged dual systems, customer confusion.

2. Stranded Inventory (The Working Capital Trap)

Immediately post-close, you theoretically have combined inventory from both companies. Practically, you can't use it:

• Legacy company customer orders reference old SKUs
• Acquired company inventory uses different SKU codes
• No automated cross-reference exists
• Order fulfillment systems can't find equivalent stock

3. Multi-Site Manufacturing Inefficiency

Even without M&A, manufacturers with multiple plants face SKU coordination challenges. Acquisitions multiply the problem:

• Each plant historically managed as independent P&L
• Local SKU structures optimized for plant-specific processes
• Corporate production planning can't optimize across facilities
• Quality data doesn't aggregate (system thinks each plant makes different products)

4. Variant Explosion (The Governance Failure)

Without formal governance, SKU counts grow organically through product proliferation:

• Sales wants custom SKUs for key accounts
• Engineering creates variants for minor design changes
• Regional offices add local versions for compliance
• Nobody retires obsolete SKUs (might still have customer orders)
• M&A doubles the variant count overnight

5. ERP Migration Becomes Impossible

Companies invest £10M-50M in modern ERP systems (SAP S/4HANA, Oracle Cloud, Microsoft Dynamics). These systems assume clean, hierarchical product masters. Most manufacturers have nothing of the sort:

• No formal product hierarchy
• Attribute definitions inconsistent
• Product relationships undocumented
• Business rules exist only in employee heads

Data migration budget: £2M. Actual cost: £8M. Timeline extended 12-18 months. Go-live with partial functionality because product data isn't ready.

6. Customer and Supplier B2B Integration Breaks

Large manufacturers have hundreds of EDI relationships with customers and suppliers. All tied to SKU structures:

• Customer purchase orders reference your SKUs in their procurement systems
• Supplier ASNs (Advanced Shipping Notices) use your part numbers
• VMI (Vendor Managed Inventory) programs track your SKUs at customer sites
• Quality certifications tied to specific SKUs

Post-acquisition, you want to rationalize SKUs. But changing codes requires:

• 6-12 month customer notification (they need to update their systems)
• Parallel running of old and new codes (customer transition timelines vary)
• EDI mapping maintenance (every transaction needs cross-reference)
• Risk of losing customers who won't update their systems

Result: Legacy SKUs persist indefinitely because B2B integration coupling makes rationalization too expensive/risky.

7. Digital Transformation and AI Blocked

Modern manufacturing depends on data-driven capabilities:

• Demand forecasting AI (needs consistent product hierarchies)
• Predictive maintenance (requires equipment/parts taxonomies)
• Digital twins (need product/component standardization)
• Quality 4.0 (IoT sensor data needs to map to product codes)
• Supply chain visibility (partners need consistent product references)

All discover SKU chaos 3-6 months into implementation:

Why Legacy M&A Debt Compounds

It's not just recent acquisitions. Many manufacturers have unconsolidated data from deals closed 5, 10, even 20 years ago:

• 2005 acquisition: SKUs never fully integrated, systems still running in parallel
• 2012 acquisition: Partial integration completed, but original SKU codes maintained for "legacy customers"
• 2018 acquisition: Integration started but stalled, cross-reference tables manually maintained
• 2023 acquisition: Current integration project discovering all the accumulated debt

Each layer adds complexity. Each unfinished integration creates technical debt. By the time of the next acquisition, you're not integrating two systems - you're integrating six.

What FireCherry Does

FireCherry specializes in manufacturing SKU integration where precision and operational continuity are critical. Our manufacturing-specific expertise covers:

• Post-acquisition SKU mapping and consolidation
• Multi-site product harmonization (discrete and process manufacturing)
• ERP migration product master preparation (SAP, Oracle, Dynamics, Infor)
• BOM standardization across acquired companies
• Aftermarket parts cross-referencing (OEM, supplier, distributor codes)
• Private label and configuration variant management
• Regulatory compliance preservation (lot traceability, quality certifications)

Our Approach for Manufacturing M&A

Phase 1: M&A SKU Integration Assessment (3-4 weeks)

Rapid post-close assessment to scope the integration challenge:

• Map SKU structures from both companies
• Identify equivalent products across coding systems
• Document business rules and relationships
• Quantify stranded inventory and working capital impact
• Assess customer/supplier EDI dependencies
• Deliver phased integration roadmap with cost/timeline estimates

Deliverable: Integration roadmap showing quick wins (weeks 4-8), core standardization (weeks 8-20), and long-tail rationalization (months 6-12+).

Fixed price: £13,500

Phase 2: SKU Mapping and Consolidation (16-24 weeks)

Core integration work to enable unified operations:

• Automated SKU matching where structures allow (typically 30-40% of SKUs)
• Expert-assisted mapping for complex cases (configured products, variants, BOM relationships)
• Unified product taxonomy with formal specifications
• Cross-reference tables for transitional period
• Integration with ERP, PLM, WMS, and MES systems
• Customer/supplier notification and transition planning
• Validation and quality assurance

Deliverable: Operational product master enabling cross-company fulfillment, production planning, and procurement consolidation.

Typical engagement: £180k-£350k

Phase 3: Multi-Site Harmonization (14-20 weeks)

For manufacturers operating multiple facilities (whether from M&A or organic expansion):

• Cross-plant product reconciliation
• Unified production planning enablement
• Quality data aggregation (same product across sites)
• Cost accounting standardization
• Supplier consolidation support (volume leverage across equivalent SKUs)

Typical engagement: £150k-£280k

Phase 4: ERP Migration Preparation (12-18 weeks)

Pre-implementation product master cleanup for ERP projects:

• Product hierarchy definition (matches ERP data model requirements)
• Attribute standardization and enrichment
• BOM structure validation and cleanup
• SKU rationalization (eliminate duplicates, retire obsolete)
• Migration tooling and validation frameworks
• Go-live support and data quality monitoring

Typical engagement: £120k-£220k

Why Manufacturers Choose FireCherry

Client Infrastructure Deployment

All work performed on client infrastructure:

• No data leaves your environment
• Complete control and IP ownership
• We deliver specifications, tooling, and governance
• Seamless integration with existing ERP/PLM/WMS/MES systems
• Training and knowledge transfer to internal teams

"M&A value creation depends on operational integration. Operational integration depends on product master unification. Most acquirers discover this 6 months too late."

Related reading: See our guide on why enterprise codesets need formal specifications, or explore how M&A integration challenges extend across industries.