Tax Reform

Supply Chain: The US Tax Reform Impact

Jill-Marie Harding, Managing Director

jmharding@alvarezandmarsal.com

March 28, 2018 / North America

With Cyndi Joiner, Managing Director, A&M Corporate Performance Improvement

In the wake of U.S. tax reform, many companies are uncertain on how to navigate the complexities and business implications of new tax laws. The law changes are sweeping and may have a dramatic impact on how and where companies do business.

Prioritize. While there are several tax law changes to keep in mind, certain changes are more pertinent to address. For supply chains, the following provisions should be addressed:

Supply chains are not exclusive to just one industry. Because of this, the implications of the current tax reform will be far and wide, particularly affecting many in these industries below:

Further, there are key aspects of a company’s supply chain that may be disrupted by tax reform:

• Order Fulfillment & Service Delivery Management
• Manufacturing & Operations
• Integrated Demand and Supply Planning
• Strategic Sourcing & Procurement
• Logistics & Distribution

Simply put, if a company fit within any of the above parameters, it must manage expectations and anticipate:

• Potential impact on synergy capture
• Potential decrease in free-cash-flow available for capital expenditure spend, M&A, and working capital
• Reduced efficiencies of current capital structures

Companies should proactively prepare by (1) modeling the effect of the U.S. tax reform changes to their supply chain; and (2) evaluating alternatives to mitigate risk and improve operaitonal efficiencies; (3) develop integrated implementation planning.

Tax reform’s influence on a company supply chain is critical and complicated. Our team will sort through this complexity with a comprehensive approach, including the use of our modeling tools, to help a business understand the financial, tax, and operational impact.

To learn more about our services, visit: https://www.alvarezandmarsal.com/expertise/tax


North America