Supply chain planning technology provider JDA Software announced today its intention to acquire German based Blue Yonder software.

No additional details relative to terms and monetary particulars have been released at this time. The transaction is expected to close in August, subject to competition agency approval. Blue Yonder technology

Founded in 2008, Blue Yonder received early-stage backing from anchor investor Otto Group and equity investment firm Warburg Pincus. Based in Karlsruhe, Germany, this provider’s expertise has been on artificial intelligence and machine-learning capabilities focused on retail industry needs. The firm claims to have one of the largest teams of PhDs/data scientists focused on supply chain and retail merchandising. According to a Factsheet, Blue Yonder currently employs 115 people, most of which are located in Germany.

According to the JDA Software press release, plans call for leveraging Blue Yonder’s AI and machine-learning capabilities into JDA’s Luminate applications, including the Luminate ControlTower™. Blue Yonder’s intelligent Demand Forecast & Replenishment and Price Optimization applications to complement and enhance JDA’s own retail planning capabilities, including opportunities for JDA’s retail customers to dynamically improve their pricing, promotions, markdowns, and replenishment capabilities. Blue Yonder’s advanced forecasting will also likely be leveraged to support benefits to fast and short lifecycle products, optimized labor, and improved product sustainability.

Both companies count UK grocery chain Morrison’s as a joint retail industry customer

The Blue Yonder technology is targeted to fill gaps in actionable, autonomous intelligence, cognitive planning, replenishment optimization and advanced forecasting  capabilities specifically targeted for retail supply chain and customer fulfillment process capability needs.

The announcement and provided Factsheet indicates that Blue Youder will retain its branding and operate as a subsidiary of JDA Software.  The company’s founder, former CERN physicist and KIT professor Dr. Michael Feindt will provide ongoing thought and innovation leadership to both companies, and CEO Uwe Weiss will join JDA’s Operating Committee.

Our First Take on this Announcement

Our first impression is that this announcement reinforces the desire by current supply chain planning and response management technology providers to add more and broader capabilities for supporting machine-learning focused capabilities in planning and more automated decision-making capabilities. Digital supply chain transformation capabilities are indeed becoming a more important topic for many businesses, but timing and change management readiness remain an important factor in the timetable for transformation.

On paper, the addition of Blue Yonder can indeed accelerate JDA Software’s development and deployment efforts in AI and machine-learning enabled capabilities, which was lagging. An open question lies in the synergy of the two corporate cultures.

Candidly, we were not completely familiar with Blue Yonder’s detailed AI-based capabilities in the market, and we anticipate a more detailed briefing after this transaction receives formal approvals. Providers that specialize in AI based technology deployments sometimes have the tendency to provide unique process support scalabilities that may or may not be scalable to other industry settings. The company’s web site features but a handful of customers, that in addition to Morrison’s, include retailers Kaufland, Ersting’s, Magazine zum Globus, Otto, among others.

One again, JDA has initiated a strategic move that is clearly focused on online and physical retail industry support. That again begs the question of how strategic JDA’s existing manufacturing industry support areas will become down the road.

Supply Chain Matters will provide additional perspectives and insights at a further date pending more detailed briefings and discussions.

 

Bob Ferrari

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