Last week, I attended JDA’s user conference, JDA FOCUS 2013. There were more than 2,600 attendees there — a bigger event than last year because of the JDA/RedPrairie acquisition. One of the things I value about this conference is not only the opportunity to listen to smart customers talk, but also having conversations with some of JDA’s sharp executives who test my thinking.
Here were some interesting tidbits:
A top executive from Walmart gave a keynote presentation the first day. Walmart is famous for building RetailLink and providing manufacturers with point-of-sale (POS) and other forms of downstream data. This executive said this was no longer good enough. Walmart needs to work toward providing its manufacturing partners order forecasts that go out 30, 60, and 90 days. There is a great opportunity, which he called “the great unlock,” to do much better joint promotion planning if they can do this.
In the past, we’ve written about the need to include the transportation team in the Sales & Operations Planning (S&OP) process. That is starting to occur. A large equipment manufacturer talked about how it is using JDA Transportation Modeler to support this process. One goal of a S&OP process is to help a company forecast how it will do in relation to its financial targets. If the S&OP process is showing that order volume will go up 20 percent over the next three months, for example, it would be foolish to assume transportation costs will also go up 20 percent. Those costs might actually go up much more — or much less — than 20 percent depending on the network and transportation capacity.
A large retailer that had never done demand planning is now carrying 20 percent less inventory in its distribution centers (DCs). The factoid that caught my attention was that it costs the retailer 5 to 6 cents per case per day to hold inventory in its DC. Assuming the retailer stores tens of thousands of cases per DC on any given day, my back of the envelope math shows the retailer is saving tens of millions of dollars per year from implementing demand management. Yet the retailer admits it is still fairly immature in this area; there are more savings to be had as it gets better at this.
In the “test my thinking” category, I’ve changed my mind in two areas:
I told JDA’s CTO that I knew software vendors had to invest in mobility, but it did not excite me. So, you can show an application screen on an iPhone or tablet computer — big deal. The CTO pointed out that the real opportunity from investing in mobility is based on creating more efficient workflows and business processes. Their first big area of investment is using mobility to make store operations more efficient. In an omni-channel world, where goods might be ordered online but delivered from the local store, some of those workflows may have a supply chain flavor.
- I’d always presumed that e-fulfillment is best done from a dedicated dot-com warehouse. JDA is signing WMS deals where both e-fulfillment and store replenishment are done in the same warehouse. My longtime WMS product manager/marketing buddy tells me they have 11 retail customers doing store replenishment and dot-com out of the same warehouse. His point is that segregating the case-pick part of a warehouse (store fulfillment) from the each-pick portion (dot-com fulfillment) is not that hard. It is also probably much less expensive to expand an existing DC than build a dedicated greenfield dot-com warehouse.
Finally, one of the things I appreciate about the JDA conference, in contrast to other supply chain events I attend, is that many of the speakers are from operations instead of IT; operations/business folks are much better speakers.