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Technology Will Drive the Future Supply Chains

Umesh Gaur
23, Oct. 2020

Umesh Gaur –M D, Blue Yonder India, Speaks to Dr. Rakesh Singh from ISCM on how technology will drive the future supply chains.

In a world where demand and supply are dynamic and uncertain, supply chain managers have their task cut out for them. From the planning to the execution, real-time insights will empower supply chain professionals to respond faster, and orchestrate better. Slowly, technology is becoming the framework for efficient and effective supply chains. In an interview with Dr. Rakesh Singh, Chairman ISCM, Umesh Gaur, Managing Director, India, Blue Yonder dwells on the technology imperative and Blue Yonder’s offerings.

How has corona virus disrupted supply chains across world? Will the supply chain planning world move from a deterministic world to one which is resilient? What are the main gaps in supply chain planning today? 

Today’s supply chains are facing a new era of uncertainty exacerbated by COVID-19.  Global disruption, channel complexity, trade concerns, and supply chain skill shortages are the new normal, and new levels of supply resiliency are required to respond effectively.

Traditionally, supply chains have been tuned based on lean manufacturing concepts such as minimizing inventories, optimizing asset utilizations, etc. What companies should take away from COVID-19 is that their customers’ experiences are becoming more reliant on supply chain execution with higher levels of resiliency needed than ever before.

What companies should take away from COVID-19 is that their customers’ experiences are becoming more reliant on supply chain execution with higher levels of resiliency needed than ever before.

The top 10steps for tomorrow’s resilient supply chains: 1) diversify sourcing, 2) synchronize silos, 3) drive commerce with IoT, 4) add automation, 5) require end-to-end visibility, 6) find new roads for logistics travel, 7) end seasonality, 8) consolidate SKUs, 9) reimagine promotions and 10) support booming e-commerce.

What are your views on demand, S&OP, and IBP as an approach to planning? What capabilities do you see are needed to make planning during uncertainty more responsive and useful?

Analysis by the Aberdeen Group[MR1]  shows that Sales & Operations Planning (S&OP) leaders are more profitable. Senior management engagement, business-wide collaboration, and high levels of forecast accuracy ensure that the business can be steered by corporate objectives. By comparison S&OP ‘laggards’ are aligned and resourced to resolving forecast errors and unanticipated issues. It is no wonder that the top supply chain initiative that organizations are planning to pursue is the deployment of ‘best in class’ S&OP and Integrated Business Planning (IBP) into their corporate processes.

Manufacturers would need to entail the following four capabilities to make planning more responsive:

  • Connected: Tight integration of forecasting systems, processes, and data across all relevant teams and functions.
  • End-to-End Visibility: A data-centric understanding of forecasts and how they influence — and are influenced by the forecasts of interdependent teams and processes.
  • Planning & Forecast Agility: The ability to nimbly identify and respond to unpredictable swings in demand, production, materials availability, labor, and customer preferences.
  • Intelligent Automation:  Elimination of outdated manual processes and improved speed and accuracy of reporting tools.

How is the SCM 4.0 changing the world of supply chains today? Is autonomous planning or connected planning the future?

With operational disruptions taking effect, companies need to put into perspective all possible countermeasures to weather the crisis. Staying agile, focusing on operational and supply chain initiatives and planning for the rebound are few imperatives for the industry. Summarized below are the four[MR2]  key responses we have received from supply chain practitioners on their need for an autonomous supply chain…

What do you think is the future of forecasting? Is forecasting really dead? What’s your views on this? Is Blue Yonder approaching this very differently?

Forecasting has become more important than ever because of the growing uncertainties in the product and customer profiles. The best-in-class organizations have a 20% better forecast accuracy (29% at the SKU level). This means that all other organizations are spending at least twice as long expediting issues back through the supply chain, while the ‘best in class’ organizations are in control, focusing on achieving the business plan. In fact, per McKinsey & Blue Yonder industry analysis, for a $1billion business, driving a 5-10% forecast accuracy improvement can potentially materially impact business results with up to a 2-3% revenue gain and a 10-30% P&L savings.

Staying agile, focusing on operational and supply chain initiatives and planning for the rebound are few imperatives for the industry

So what’s the future of forecasting? Blue Yonder’s demand planning is a SaaS solution that deliver game-changing forecast accuracy using artificial intelligence (AI) and machine learning (ML) for exacting precision and insights to better align forecast decisions with your business priorities. The solution ingests hundreds of demand-driving variables and uses machine learning to provide a unique demand projection with calculated business impact and risk. This enables higher planner productivity, better inventory management and an improved understanding of demand drivers and customer behavior.

Differentiators:

Predictions are calculated on lowest granularity (per item, per day, at the point of consumption)

Daily forecast updates to capture fluctuations

Includes prescriptive recommendations for exception management

End-to-end supply chain solution footprint

Broad ecosystem of digital partners with expertise across supply chain planning and execution

Probabilistic demand predictions evaluate uncertainty associated with forecasts

With the uncertainty caused by the COVID-19 pandemic, the logistics and distribution world is slowly and speedily moving towards omnichannel. Has Blue Yonder taken cognizance of this trend? Which are the organizations which have benefitted from this capability of Blue Yonder?

COVID-19 has accelerated a significant shift in consumer buying behavior– more “comfort,” more local, more community – and has changed how consumers are shopping. We are moving from omni-channel to multi-channel with offers such as subscription, rental, made-to-order, and direct to consumer. Blue Yonder is working with retailers and fast-moving consumer goods (FMCG) companies to help them integrate all these new sales channels without disrupting the existing. This is true for FMCG companies looking to set up direct-to-consumer operations, as well as for retailers investing in manufacturing companies to secure their private label.

Before I go into few more questions, what is the philosophy behind the name change from JDA to Blue Yonder? What’s going to be the business model of Blue Yonder in future? What capabilities are you building to provide end-to-end capabilities in future?

As we headed into our 35th year in business, we reached an inflection point where we needed to pivot from being the long-recognized leader in supply chain to becoming the world leader in providing the next- generation digital fulfillment platform, powered by AI/ML.

The company has perhaps transformed more over the past three years than at any other point in its history, which started with the acquisition of Blue Yonder GmBH, which kicked off our autonomous moonshot. The transformation has included the infusion of AI/ML expertise and technology, SaaS transformation and the journey to cloud, critical partnerships with Microsoft and MuleSoft, our pivot to becoming a platform versus a set of products/applications, a more integrated and agile services and support organization – just to name a few. We file more than 30 patents in year from India and innovation is in our company culture.

This means that all other organizations are spending at least twice as long expediting issues back through the supply chain, while the ‘best in class’ organizations are in control, focusing on achieving the business plan

As a result, we conducted an extensive process to look at our name, which included a 360-degree brand immersion assessment; a nine-month brand identity review with the leadership team, associates, customers, partners and industry analysts; and a brand audit across the competitive and industry landscape.

It was determined that we needed to evolve the JDA brand identity – and name – to Blue Yonder in order to further support the burgeoning impact of AI and ML technologies across the supply chain, logistics and retail. Aspirationally, Blue Yonder references the expanse of the clear blue sky and discovering new frontiers —offering endless innovation and possibilities. “Cloud” attributes associated with Blue Yonder are built right into the DNA of our name. And, the Blue Yonder brand has many existing positive brand equities including being known for innovation, disruption, and agility.

Can you give more insights in to Blue Yonder’s Control Tower solution?

Luminate Control Tower is a next-gen SaaS solution powering end to end visibility of your supply chain for faster, more accurate, and more informed decision-making. It gives you insights to see, understand, act and learn on real-time information from the entire digital ecosystem, including third-party data sources. Machine learning empowers prescriptive resolutions to supply chain challenges, taking prioritization and impact analysis into account.

Key features

See

• End-to-End Visibility: Visualize the entire flow of goods upstream and downstream with one version of the truth.

Understand

• Supply Chain Intelligence: Augment visibility with diverse data sources, including partner data to offer more accurate intelligence.

Act

• Machine Learning: Leverage machine learning to surface recommended actions, weighing impacts and prioritization with what-if scenarios.

• Collaboration: Share and discuss issues and insights with trading partners to quickly and effectively resolve situations.

 Learn

 • Self-Learning: Gain increasing insight as your supply chain evolves to improve future recommendations

Key benefits

• Empower and engage planners to be more productive and effective decision makers.

• Improve customer experience with higher and more consistent on-time delivery.

• Reduce costs from expediting shipments due to disruption by an estimated 30%.

 • Improve resource utilization through prioritization of issues and actions.

• Reduce inventory write-offs for excess, obsolete or damaged goods by an estimated 20%

Blue Yonder has entered into many collaborations and partnerships in recent times. Do you think these partnerships will provide you a strategic edge over competitors?

From a growth strategy standpoint, we moved ahead on a couple of significant initiatives recently. This includes our strategic equity investment with Panasonic and the acquisition of Yantriks.

What began as a customer relationship with Panasonic two years ago has evolved into a strategic equity investor relationship. From customer to ecosystem partner, to joint venture, Panasonic now has a 20% investment in Blue Yonder as of July 2020.  We will move forward together driving sales and market growth in Japan, while continuing to jointly develop IoT and edge solutions that build on our Luminate Platform.

From a growth strategy standpoint, we moved ahead on a couple of significant initiatives recently. This includes our strategic equity investment with Panasonic and the acquisition of Yantriks.

In late July, Blue Yonder announced it acquired Yantriks, a SaaS provider of commerce and fulfillment microservices. This acquisition combines real-time transactional systems with supply chain planning, forecasting and fulfillment solutions to power modern customer experiences. With this combined offering, companies can integrate all their supply chain assets to deliver a differentiated experience to their customers right from the start of the shopping journey.

Yantriks order fulfillment solutions will be combined with Blue Yonder’s Luminate Commerce (previously Luminate Retail) solution. Luminate Commerce is a dynamic set of capabilities that span pricing and promotions, store execution, space and floor planning, assortment planning, micro fulfillment, and workforce management. Luminate Commerce delivers real-time visibility and actionable insights to source, promise and fulfill orders while being able to deliver a differentiated shopping experience to end consumers.

Together, the combined companies can offer a way for retailers to predict and fulfill demand and deliver personalized experiences to consumers all the way through to the last mile. No other supply chain vendor can do this today with one, modern technology stack.

How is Blue Yonder as an organization coping with the challenges posed by this pandemic? How is the Blue Yonder workplace changing?

Like many companies, Blue Yonder made the pivot to working from home for all 5,300 of its associates during the pandemic. Our APAC associates were the first to be impacted by COVID-19 so we learned a lot from that experience that we were able to implement across the globe.

We are continuously tracking and assessing the COVID-19 pandemic, while diligently evaluating our ability to safely return to the office based on local key indicators and readiness considerations. Our future return to office strategy will be based on the lifting of government shelter-in-place or lockdown regulations, community readiness, and the completion of our own workplace preparation.

Throughout all this, our associates have never missed a beat as they continue to provide the best-in-class service to our customer and partners while caring for their families and each other. ♦♦♦♦♦

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