The synchronization and management of the Omni-channel customer fulfillment experience has fast become a complex problem for retail industry business management and supply chain teams. The added dimensions of taking orders online or from physical stores and fulfilling from multiple channels adds complexity and needs for smarter and more-informed decision-making. Cost to serve and determining impact to profitability become ever more a challenge.
Yesterday, in conjunction with the Focus Connect 2014 event being held in Barcelona, JDA Software and IBM made a joint announcement that Supply Chain Matters believes demonstrates the ongoing importance and continued evolution of Supply Chain Control Tower (SCCT) support capabilities in the supply chain technology market. This announcement could also portray a possible broader relationship among these two technology providers in the months to come.
The specific announcement involves a joint collaboration among JDA and IBM development teams to address the need to process and fulfill retail industry Omni-channel orders in a more efficient and more intelligent manner. The approach calls for combining the elements of JDA’s warehouse management, demand planning and workforce planning business support capabilities (JDA Intelligent Fulfillment and Labor Productivity) with IBM’s Sterling Distributed Order Management network platform capabilities. In essence, this approach marries elements of supply chain planning and execution with an end-to-end order management and fulfillment platform that connects all channel participants. The combined capability is expected to be offered in either an on premise or cloud deployment option, the latter being supported by IBM’s SoftLayer business arm. The joint development effort is currently underway and according to the announcement, is expected to be available in late spring of 2015.
This author had the opportunity to speak with IBM regarding the joint announcement. Discussions among these two technology providers began in January of this year at the National Retail Federation (NRF) conference. Both companies have a rather strong market presence among global retailers and each was hearing customers speak to the increasingly complex challenges currently manifested in Omni-channel customer fulfillment, including the dynamic aspects of having to manage the tradeoffs of inventory, appropriate fulfillment location, transportation and labor requirement needs. In May of this year, our Supply Chain Matters commentary associated with attendance at IBM’s Smarter Commerce Summit highlighted the evolving dimensions of Omni-channel and the needs to provide more predictive and prescriptive decision-making capabilities into the process.
The joint press release includes a quote from joint customer Lowe’s Home Improvement, and we were informed that both firms have identified interest from other unnamed retailers as well. Apparently, the original timetable called for announcement of joint product integrating JDA and IBM elements later in 2015, but it was obviously pushed-up to coincide with this week’s JDA customer event.
Our supply chain and B2B business community education series regarding SCCT has articulated that the concepts of control towers involve efforts to bring together supply chain planning and execution business process elements with enhanced intelligence and more predictive decision-making that can be provided in near real-time dimensions. There have been a number of strategic movements underway among multiple supply chain, enterprise and ERP technology vendors to build, broaden or position SCCT capabilities. We view this JDA-IBM joint announcement as yet another dimension of such efforts. JDA has the potential to leverage a broader more feature-rich distributed order network platform that supports more dynamic process parameters while IBM garners access to deeper retail-specific supply chain planning and execution support functionality. We have been informed that JDA is building and architectural framework that supports plug-in capabilities from other vendors, similar to what we have heard from supply chain planning providers such as Steelwedge and its connection to the Salesforce.com platform. Similarly, supply chain business network provider E2open augmented supply chain planning and product management support capabilities with the acquisition of Icon-SCM and Serus Corporation respectively.
As noted in our previous commentaries, IBM has been integrating elements of Sterling order management and B2B messaging capabilities with its IBM Emptoris sourcing and procurement business suite, and has communicated efforts to bring the predictive elements of Watson decision-making to online fulfillment and supply chain synchronization challenges. Thus, the SCCT business process support elements continue to broaden from many dimensions and are a sign of what will transpire from SCCT support technology down the road.
In the meantime, readers and joint JDA and IBM customers should watch the ongoing joint efforts among both providers for further signs of what is to come. Just like the prior announcement of the partnership among IBM and Apple, both parties provide the potential to remove the information integration burden for today’s highly complex supply chains.
Disclosure: IBM, E2open and Steelwedge have current or prior business relationships with the Ferrari Consulting and Research Group, parent of the Supply Chain Matters blog.
There have been some noteworthy announcements related to both supply chain B2B network and PLM technology providers this week which Supply Chain Matters highlights in this news roundup commentary.
JDA Software Names Permanent CEO
In the press release, CEO Dail states: “The potential for JDA now, and into the future, is tremendous and I am excited about the opportunity to continue leading this innovative company.”
Since assuming interim CEO leadership, Dail has instituted a sorely needed Global Industries and Solutions Business unit responsible for product portfolio and industry support strategies, established an Innovation Lab to build transformational technology leveraging next-generation platforms, including cloud, and appointed a new leader for global sales.
JDA is also in the process of unveiling a new look and brand identity over the coming months and readers can anticipate broader industry focus and clearer messaging.
SAP Announces Expanded Cloud Relationship with IBM
This week, SAP announced that its SAP HANA Enterprise Cloud services will be made available through IBM’s global cloud infrastructure. The joint announcement came with enthusiastic statements issued by both tech CEO’s. The expanded partnership provides broader global hosted options for moving business applications from on premise to the cloud. According to published reports, this deal provides SAP with access to near 60 data centers between those SAP has deployed and the addition of IBM’s centers.
According to a specific report from IDG News Service, revelations over the past year about domestic surveillance by U.S. intelligence agencies has raised data sovereignty and data privacy sensitivities among several countries, and this arrangement with IBM provides SAP with a greater ability to accommodate such concerns by cloud services hosted in designated domestic countries. It is therefore little surprise that the joint announcement emphasizes security for enterprise customers. Broader cloud infrastructure and open standards based approach inherent in the footprint of IBM Cloud additionally provides SAP more scalability options in growing HANA Enterprise Cloud.
Arena Solutions Announces PLM Collaboration Platform
Mid-market PLM technology support provider, Arena Solutions announced two new modules plus enhanced functionality incorporated in its fall product release.
Arena Scribe provides a collaboration platform that supports comment and collaboration in the context of each individual process or record within Arena PLM. Users or suppliers can follow comment streams and receive dashboard and email alerts to stay up-to-date with fast-moving information. Arena DataExtract supports the ability to extract process datato a standard, flat file format, which can be analyzed using a variety of analytic tools from the range of basic spreadsheetstosophisticated business intelligence and analytics applications. This type of functionality provides enhanced ability to identify trends and solve problems related to product development, trends in engineering change orders or cycle times.
The new fall release includes what is described as significant ease-of-use enhancements to Arena Quality, a module introduced earlier this year. This module supports broader visibility, cross-functional team collaboration and tracking of product quality resolution.
Readers can gather detailed information related to Arena’s fall release in the news announcement.
Last week, commercial aerospace manufacturer Boeing announced an increase for its monthly production rate of 737 aircraft starting in 2018. The designated production rate will increase to 52 airplanes per month in order to sustain a production goal of 620 finished 737’s per year, the highest ever volume for this particular aircraft. This boost amounts to a near 24 percent increase from the current pace of producing 42 of the 737 aircraft per month. Boeing is providing an ample two year notice to its supply chain and ecosystem partners in ramping the 737 supply chain to sustain this level.
With a reported 4000 unfilled orders for both the named Next-Generation 737, and even more fuel-efficient 737 MAX models, Boeing has to crank-up the pace in order to satisfy customer operational and business timing needs. Once more, the global economic environment can change very quickly. We suppose our readers among other industries would relish a two-year window for planning.
Meanwhile, Boeing also announced its report of aircraft deliveries in Q3. Deliveries included 120 of the Next Generation 737 aircraft and 31 of the 787 Dreamliners, which reflect meeting current quarterly production goals. Year-to-date, Boeing has delivered 79 Dreamliners utilizing two final assembly sites with quite a ways to go in reducing the current backlog of that aircraft family.
As many of our readers may be aware, the Supply-Chain Operations Reference Model (SCOR) was developed by the Supply Chain Council (now APICS Supply Chain Council) to assist multi-industry and organizational supply chain organizations make meaningful and rapid improvements in supply chain business processes. This model’s methodologies describe the Plan, Source, Make, Deliver and Return activities associated with supporting customer and business fulfillment needs and have become a common language to articulate industry supply chain capabilities.
We all know that today, industry supply chains are driven by customer requirements and service needs, and the SCOR model is a tool that helps organization’s with a single standard reference upon which to understand the processes that make-up the supply chain along with their relationships to performance metrics. The power of SCOR is that it does not document the supply chain in the lens of functions (planning, procurement, manufacturing, logistics, etc.) but rather that of business process inputs and outcomes.
This author has been both trained in SCOR methodologies and has volunteered in various positions of the Supply Chain Council, including being a prior member of that organization’s North America Leadership Team. I can therefore attest that SCOR is a rather versatile tool that has assisted many industry and service focused supply chain teams to describe the depth and breadth of their supply chains as well as provide the basis for supply chain improvement or transformational initiatives.
The multi-level SCOR framework maps all customer interactions, all physical and informational transactions, planning and fulfillment processes. SCOR is a hierarchical and highly defined model which can capture the detail of supply chain processes with their relationships to the all-important performance attributes of responsiveness, agility, cost or assets associated to a supply chain. Those teams that have had experience with SCOR know that the real power of the tool is in understanding how all processes relate to one another and where processes need to be adjusted or modified to meet changing business or customer requirements. SCOR is an important tool that brings detailed understanding of the entire makeup of a supply chain, including best practices derived from other multi-industry supply chains.
The power of a comprehensive process definition tool is in providing common taxonomy and detailed cross-organizational and management understanding of the many supply chains that can exist within a particular company. Too often, teams get bogged down in documenting and updating the SCOR framework models which takes away from broad cross-functional support and from the timeliness or effectiveness of the framework as a reference to support decision-making. This is where technology can provide needed assistance.
Supply Chain Matters has previously called attention to highly focused system integrators, such as Bristlecone, who have developed self-contained service offerings that address very specific business needs. These are fixed-cost, managed scope application accelerators developed from prior successful implementations and industry best practices.
To assist firms that utilize SAP’s supply chain management applications the BristleconeStore offers ProcessesNow, a series of pre-built process maps based on the SCOR framework. ProcessesNow provides a central repository of process maps that extend the SCOR model by additional three levels . It uniquely links these processes to the various transactions within SAP’s APO or Oracle’s Demantra planning application helping teams to better align the process maps with the transactions that enable them, hence, enhancing user adoption of the related planning solutions. Teams can interact with SCOR models both online and offline utilizing an easy to navigate expand and collapse structure.
Another neat feature is that Bristlecone has augmented ProcessesNow to support certain industry unique process needs. According to Bristlecone, this tool can typically save 4-8 months of framework documentation efforts, allowing teams to more productive time to analyze and iterate their SCOR models, and the tool itself typically can be installed in about a week. As with DemandPlanningNow which has previously highlighted, this application is built upon acquired knowledge, best practices and technical expertise acquired from prior supply chain implementations.
Disclosure: Bristlecone is a client of the Ferrari Consulting and Research Group
Supply Chain Matters stumbled upon a rather interesting development, one that perhaps provides somewhat of a perspective on today’s economically distressed consumer. By our lens, it is also another reminder to Sales and Operations Planning (S&OP) teams supporting consumer products supply chains that planning for promotional demand spikes based on point-of-sales (POS) data may be fraught with some distorted or inflated data.
The Publix Supermarket chain, primarily concentrated in Florida, which is in a head-to-head competitive battle with Wal-Mart, has implemented new policies regarding the use of coupons among shoppers. According to a published report by the Tampa Bay Times, Publix will limit shoppers to redeeming a maximum of eight of the same coupon per day, per household. There are other noted restrictions, including that if an individual coupon is valued at more than $5, it will require a manager’s approval. The report points to both consumer abuse and shopper feedback as motivating this type of policy.
Several questions come to mind.
How do consumers amass eight of the same coupon? Is this a flaw in the current world of online advertising and promotional offers when digitally savvy consumers have the where-with-all to secure such numbers? From the product demand planning perspective, the question often debated is whether a coupon promotion amounts to a one-time spike or a reflection of consumer attractiveness to that product, and does that indicate a longer-term increase in that product’s demand. One might suppose that S&OP teams would be conducting such debates, particularly the folks representing sales and marketing. Perhaps some of our readers involved in S&OP and demand planning can weigh-in on these questions and whether coupon abuse can be tracked.
Another thought on the potential economic conditions with which Florida or other geographically based consumers are struggling. Is amassing and utilizing such a high number of coupons per household a worrisome economic sign or just a local practice? That, in itself, may be a place to begin.
Perhaps some readers are not struck by such trends. It certainly caught our eye.
Supply Chain Matters has queued-up a series of follow-up postings related to previous supply chain related commentaries we have featured on this blog related to important supply chain and B2B/B2C network fulfillment capabilities.
The following six updates provide updated developments.
We, along with other business and social media outlets called attention to the problematic last minute postponement of the scheduled release and availability of these new models across China. There was widespread speculation as to the cause of and potential length of the delay. Despite this situation, Apple had a rather successful first weekend of shipments. However, arch competitor Samsung countered with a quick maneuver in offering its new Galaxy Note 4 smartphone initially within China before other countries.
Today, various published reports now indicate that China’s Ministry of Industry and Information Technology has indeed granted the iPhone 6 models their network access permit.
The latest from Apple is that pre-orders for the new models will begin on October 10 and the phones will be made available by all three state-run mobile carriers. However, these state-run carriers have reduced the subsidies for high-end smartphones such as the iPhone 6, which implies that the higher-end iPhone will retail for 6088 yuan ($990).
According to a published Bloomberg report, the approval process included scrutiny on potential leaks of personal data, with Apple having to take measures in the new release of iOS 8 to eliminate risks from three background diagnostic tools. Apple reportedly continues to provide specific comment related to specific changes having to be made in the OS to satisfy Chinese regulators.
This latest development places Apple’s channel plans for China back on-track, albeit with a month’s delay in planned product availability. Apple supply chain planners will be adjusting inventory movement plans once again. While all of this is occurring, a robust grey market of product demand has been underway to get the new iPhone models into the hands of eager Chinese consumers who can afford them. That should ease in the coming weeks.