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Hewlett Packard Now Operating as Two Separate Companies: Supply Chain Test Comes in the Coming Weeks


Today marks the official first day of high-tech firm Hewlett Packard operating as two separate and distinct companies.  One company, Hewlett Packard Enterprise Company will oversee operations of the former HP Enterprise division, a $55 billion dollar entity. The other, HP Inc., will oversee operations of the former HP Printer and PC divisions, of equivalent revenue size. Supply Chain Matters commented on this proposed split, along with supply chain implications in a July commentary, as we envisioned a very busy summer across the company.

The massive HP split involved separating balance sheets, facilities, IT systems and applications, including those related directly to the support of HP’s end-to-end supply chain.  Purchase agreements among various suppliers would have to be recast foe each new company along with various special agreements.

A published article from the San Jose Mercury Times provides perspective on the scope and efforts that went into this split, which overall involved 300,000 employees among 651 global locations. Formal planning began last February and initially involved a flow chart that consumed a 40 foot length, 10 foot high wall. Approximately 60,000 employees had to be moved to separate locations, along with a reported 2700 bank accounts and IT systems.

An interesting perspective brought out in the article was the planning could not be a consensus-driven decision-making process. Instead, a small group of executive decision-makers were supported by a separation project team that grew to about 400 people.

The real-test of this separation comes over the coming weeks as the spilt processes and systems begin efforts as two separate enterprises. From a supply chain and product management perspective, key sensitivities will be seamless uninterrupted operation of both order fulfillment, supply chain planning and execution systems.  A further perspective will be how inbound direct material and indirect materials contracts are structured, implemented and managed under the split. The Mercury Times report indicates that HP Labs will remain as a separate research and development center shared by both companies.

Obviously, the good news here was that the November 1st separation milestone was completed as required.  The systems shakeout period will hopefully occur without major snafus.


Supply Chain Matters at Oracle Open World 2015- Reflection on the Importance of Accurate Information


We continue with our series of Supply Chain Matters commentaries concerning this week’s Oracle Open World Conference being held in San Francisco. Our previous commentaries can be viewed here and here.

While attending enterprise vendor related conferences, I make it a point to attend sessions that provide updates on new functionality and inputs from customer advisory councils. Attending two such sessions at this year’s Open World provide some consistent evidence that technology consumers are becoming far more concerned with ongoing data management, discovery and maintenance. That is clearly good.

While attending a session related to the latest 12.2.5 release of Oracle E-Business Suite Order Management (OM) application, a reflected theme was customer advocating for information discovery tools. A product manager described Oracle’s prior acquisition of Endeca as the “greatest acquisition that Oracle has made” regarding the ability to leverage its information discovery capabilities across order management capabilities. With its latest release, OM includes the ability to perform 360 degree customer views of information related to orders from various channels including online. There is added application in quoting, where users can explore which quotes were the most successful along with product pricing attraction trending.

One of Oracle’s more popular applications in the area of supply chain management is Oracle OTM (transportation management), the result of the prior acquisition of G-Log. The session related to the latest version of Cloud OTM reportedly responded to customer council input related to more simplified, automated tools to update freight rate changes. Rate simplification maintenance includes the ability to easily download rates to a spreadsheet for easier user update. Also included were needs for improved dashboards, data visualization and adoption of Oracle’s standard ADK web user interface that can accommodate a wider variety of computing platforms including tablets and smartphones.

The session related to the current release of Oracle Value Chain Planning (VCP) outlined four development themes in the 12.2.5 release which all touched upon easier data management, update and discovery. VCP has now adopted the Oracle ATK web user interface, while the look and feel among the Oracle Demantra and VCP has been unified. There are now new, user-configurable, Oracle ASCP workbenches including the ability for planners to view key information they need to review on a daily basis. VCP now includes simplified export to spreadsheet capabilities, another customer advisory input. Users further requested workflow enhancements that help enable group workflow collaborations and quickly recover data from a stalled workflow.

With the current clock-speed of business across multiple industries, supply chain teams are managing the realities that planning and execution information synchronization are new table stakes for more responsive Sales and Operations Planning (S&OP). Applied use of more predictive analytics to anticipate events and better respond to events is only effective as the accuracy of the data and information fueling applications. A emphasis on easier and more automated means to insure data is accurate and timely is arguably a wise and prudent investment, and technology vendors such as Oracle are responding to such needs.

Insure that all of your on-premise and Cloud based applications software vendors are similarly sensitized to the reality that the velocity, clarity and accuracy of data and information are now rather important in insuring more contextual, relevant and timely decision-making. Tools that automate-simplify-enhance-alert to information management, discovery and maintenance will pay dividends.

Bob Ferrari

A Logistics Confidence Index Continues to Turn Downward

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Last week, Material Handling and Logistics called attention to the Stifel Logistics Confidence Index indicating that the first eight months of 2015 have not been positive indicators to the logistics and transportation universe. The report indicates: “Fierce competition, volatility and overcapacity have all taken their toll and driven the Index to its lowest point since September 2013.”

From our Supply Chain Matters lens, this report should not be a surprise to transportation and procurement teams and is a reflection of further industry turbulence ahead.

The report touches upon the airfreight sector and notes that the Logistics Situation Index for airfreight fell 4.1 points, its lowest point of the year because of lackluster volume. Likewise, the Logistics Expectation Index for airfreight was reported as troubling despite the upcoming holiday shipping period. It is yet another indication that capacity cutbacks from carriers will continue.

The Logistics Situation Index for sea freight was noted as slightly positive, as three of the four major lanes examined recorded some growth.  The Europe to U.S. lane reportedly declined sharply, and puzzling indication of the effects a far stronger U.S. dollar which would make European imports more attractive. However, exports from North Europe to North America were reported growing by 8.4 percent over the first five months of 2015, but considerable capacity increases on the lane are threatening to outstrip shipping demand.

For Supply Chain Matters, this latest index related report reflects further evidence of the significant overcapacity situation for both seaborne and airfreight that is currently driving industry spot pricing and other dynamics. We recently called attention to announcements of ocean container consortium cutbacks on Asia to Europe ratings that take effect in September.

Supply Chain Matters Commentary Regarding Infor’s Acquisition of GT Nexus

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While we were away on a two-week summer break, there was a significant acquisition announcement related to cloud-based supply chain technology, one that warrants a Supply Chain Matters perspective.

Last Tuesday, ERP provider Infor announced that he had entered into an agreement to acquire supply chain logistics and commerce network provider GT Nexus for $675 million. GT Nexus technology supports the ability of buyers to transmit order information across a connected supply chain business network, linking various suppliers, logistics providers and financial institutions.

According to the announcement, this deal is expected to close within 45 days, pending regulatory approval. GT Nexus is expected to operate as an independent division of Infor.

This author was not at all surprised at this announcement concerning GT Nexus. It was just a matter of time, and which ERP or enterprise software provider would pull the trigger.

In early January, The Wall Street Journal had reported that two supply chain business support providers, one being E2open, the other GT Nexus, were being pitched as potential acquisitions. Readers might recall that E2open, a publically traded firm at the time, was subsequently acquired by private equity firm Insight Venture Partners and has since been taken private. That transaction was valued at $273 million, approximately three times current revenues. The GT Nexus transaction value of $675 million however, is a surprise, in terms of overall amount paid.

The core of GT Nexus has always been its end-to-end supply chain execution connectivity with ten of the largest third-party logistics (3PL) services providers along with the largest ocean transportation providers as part of its supply chain execution network. Its customer base that includes names such as Adidas Group, Caterpillar, Columbia Sportswear, Pfizer and Procter and Gamble were motivated by needs for deeper supply chain wide execution synchronization.

In January of 2013, GT Nexus merged with cloud-based sourcing provider TradeCard in a strategy focused on adding financial services connectivity to supply chain networks. That included pre and post export financing and payment protection services. At the time of the merger, TradeCard had deep relationships among retail, apparel and consumer soft goods industry players who require such needs in financial supply chain services.

In the view of Supply Chain Matters, that merger moved GT Nexus further towards financial services business support opportunities as opposed to opportunities for broader supply chain planning and execution control synchronization. TradeCard CEO Sean Feeney assumed leadership of the combined companies after the merger.

For many years, GT Nexus had an on again, off again partnership with supply chain planning provider Kinaxis, in an attempt to add deeper planning and control capabilities. That relationship brought little in joint customer deployments and was broken off several weeks ago.

According to the announcement, Infor plans to leverage GT Nexus for its cloud-based capabilities in integrating direct procurement processes. Infor additionally has an existing ERP customer base anchored in fashion and retail customers which focuses this acquisition as an industry concentration strategy facilitating the integration of merchandising, marketing and online Omni-channel fulfillment needs across an extended supply chain business network. The ERP provider further hints of the ability to utilize the GT Nexus cloud-based network in the support a two-tier ERP strategy that utilizes the combination of Infor and GT Nexus capabilities in support of extended supply chain business process, S&OP and other decision-support needs. Once more, Infor is no stranger in M&A activity, and has demonstrated a track record of aggressive technology platform and application integration of its prior acquisitions.

Supply Chain Matters has long advocated the importance for industry supply chains to leverage an end-to-end business network to synchronize supply chain planning, execution and customer fulfillment needs on a global basis. The fact that two of the more visible, independent cloud-based extended supply chain network providers have now been involved in acquisition activity involving nearly $950 million is testimony to the attraction and importance of this cloud-based technology area.

For existing customers of either GT Nexus or E2open, the open question remains how each of these providers will evolve under new leadership and differing perspectives.

For our part, Supply Chain Matters will continue to provide insights and recommendations regarding this important technology area, and how both of these network providers evolve under new management.

Bob Ferrari


JDA Software Moves Forward with Release 9.0

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JDA Software announced today that its latest product release, version 9.0 is now available. Supply Chain Matters previously provided some hints to this new release in our coverage of the JDA FOCUS 2015 customer conference in April.

This version 9 release is significant from three perspectives:

  • It marks a major stepping-stone in JDA’s plans for providing customers added support in connecting supply chain physical and digital planning as well as customer fulfillment execution processes. Release 9.0 further provides demonstration of JDA’s efforts to reorient the technology provider’s vertical industry support to provide continued support for Omni-channel and online focused retail industry needs as well as core discrete and process based manufacturing industries support. This strategy was re-iterated at FOCUS in April.


  • Release 9.0 features the initial introduction and utilization of new JDA FLEX integration platform, designed to connect applications and information sources across heterogeneous systems. It further provides new opportunities for integrating supply chain planning and execution applications including the integration of the RedPrairie warehouse management and supply chain execution applications which were acquired in 2012. The JDA FLEX technology is further being utilized in the support of Omni-channel end-to-end Retail Omni-channel fulfillment processes, including the awaited connections to IBM’s Retail Commerce and Order Management (former Sterling Commerce) platform that was initially jointly announced in November of last year.


  • The Release introduces what JDA describes as: “Risk Aware, Agile Supply Chain Planning.” Included in new enhancements are:
    • Automated parameter and level optimization in product demand forecasting, allowing the system to analyze available historical data and recommend most appropriate forecast parameters.
    • The addition of a termed Replenishment Interval Workbench that allows planners to analyze and factor risk mitigation and more effective vendor or supplier negotiations.
    • In-memory, constrained aware S&OP planning with significantly added system scalability and performance, along with enhanced in-memory scenario planning allowing comparison of multiple scenarios utilizing a form of scenario scorecard functionality.
    • An enhanced Agile Control Tower that adds guided-response forms of descriptive, prescriptive diagnostic and predictive analytical capabilities.
    • Enhanced scenario and task planning within Factory Planning and Scheduling.


Another noteworthy aspect for this product release is additional enhanced functionality added to JDA Intelligent Fulfillment for support of Click and Collect online fulfillment needs that include pick-up at designated retail store, destination-driven demand categorization to match the actual physical presence of demand such as a retail store or online channel with inventory placement needs.  Supply Chain Matters has previously shared our positive impressions with the current and planned functionality of Intelligent Fulfillment and we continue to believe that this application will be a strategic underpinning for JDA’s efforts in supporting online Omni-channel and multi-channel order fulfillment process needs.

More for more detailed information, readers can view an upcoming JDA Software webinar being held on July 23.

In the coming weeks, Supply Chain Matters will provide further, more detailed commentaries related to specific functionality and business process support aspects of this new JDA release.

Bob Ferrari

Disclosure: JDA Software is one of other sponsors of the Supply Chain Matters© blog.

Ocean Container Truck Chassis Scheduling Remains a Challenge for U.S. Ports

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Supply Chain Matters calls reader attention to an added backdrop to the State of U.S. Logistics during 2014, specifically continuing ocean container shipping challenges. Robert Bowman, Editor at SupplyChainBrain penned an article, Searching for a Solution to Chassis Management. 


The article observes that in a bid to cut costs and focus on the construction and launch of ever-larger container vessels, shipping lines began selling off intermodal assets such as owned truck chassis. The result is noted as some of the largest U.S. port complexes having a tough time managing the ocean container truck chassis flowing between terminals, attempting to figure out which entity has jurisdiction over inspection, maintenance and repair practices, and where chassis need to be scheduled to handle arriving vessels. Supply Chain Matters also called attention to this problem in our coverage of the U.S. West Coast port disruption in the fall of 2014.

While equipment leasing companies have stepped into the vacuum with various concepts of equipment pools or “pool of pools” the latest ratified labor agreement involving U.S. West Coast ports calls for dockworkers insisting that inspect chassis upon exit from a facility,  That has led to additional challenges and frustrations, and according to this report, federal cout action is a strong possibility as lessors balk at this added inspection step.

Bob Ferrari

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