JDA’s user conference highlighted importance of managing omni-channel fulfillment profitably, and where transportation management fits in that equation.
If you’re a retailer and you haven’t thought about the way omni-channel delivery is affecting your business, you’ve probably been living under a rock the last couple years.
Simply put, omni-channel is the “single biggest disruption since the dot.com era,” JDA Software Vice President of Global Logistics Fab Brasca told American Shipper this week. “There is no trend or issue in manufacturing that currently rivals it.”
Brasca was chatting in the aftermath of JDA’s massive user conference, Focus, which wrapped up this week in Orlando. JDA was unified in its message to retailers, which make up about half of its customers, about what it dubs “intelligent fulfillment.”
Of particular interest was a session on how JDA is partnering with IBM on distributed order management, a discipline that will become increasingly important as retailers seek to figure out ways to make their omni-channel initiatives not just effective for customers, but also profitable.
As previously reported, a survey commissioned by JDA found that fewer than one in six executives believes they are profitably fulfilling omni-channel orders.
At Focus, Brasca and others talked about the way transportation management, warehouse management and order management need to be harmonized with each other. But more than that, they talked about the granularity needed from a solution to address all the dynamics at play in a single order. To those ends, Brasca enthusiastically discussed JDA’s new capability to dynamically split orders.
At the heart of JDA’s proposition is, Brasca admits, the robustness of its engine. It allows companies to run virtually continuous optimizations of its transportation network, in a way that JDA argues is not possible with most TMSs. These days, it seems JDA is intent on layering new products and services aimed at omni-channel retailers to really maximize the power of that engine.
The typical JDA customer – whether retailer or manufacturer – is big, with lots of modes and routes and complexity to manage. This is why they turn to a big, enterprise-class system. What is really striking is the sheer breadth of JDA’s suite, much of which sits outside the scope of what is typically addressed in American Shipper. But those pieces are critical to multinational shippers and logistics companies.
Some other notes from the conference:
- Jon Washington, senior director global supply chain – critical care at Edwards Lifesciences talked about how his company had transformed its supply chain.
Washington said Edwards, which primarily makes heart valve replacements, had excess inventories for some products, back orders for others, and rising logistics costs. Much of the problem was lack of clarity on the demand side.
“Sales forecasts tend to be aspirational, and supply chain tends to forecast based on stats,” Washington said. “We had lot of variability in terms of manufacturing and delivering product. So we increased lead time, which increased inventory but helped customer service. It allowed us to circle back and figure out how to reduce cycle time.”
The company began using JDA in 2009, but began re-engineering its supply chain in 2012. Since then, the company has reduced inventory 13 percent and its expedited logistics cost by 57 percent, and increased its U.S. forecast accuracy by 87 percent.
“We had to understand our customer needs and design our supply chain to meet those needs, then figure out the constraints to get there,” he said. “Corporate is not going to give us unlimited funds to get product everywhere. (When Edwards first began using JDA) people were worried about doing something within JDA for fear of impacting something else. But some risk is fine. You can’t be paralyzed by fear.” An executive with Valeant Pharmaceuticals said his company manages 20 to 40 million serials within JDA at any one time due to cradle to grave regulations on their products. “That’s big data,” the exec said.
- Todd Johnson, JDA’s global vice president, 3PL business unit said some shipper customers explore with them whether to run a warehouse management system themselves or seek a 3PL with that capability through JDA.