Panasonic And Blue Yonder: Going All-In On The Automated Supply Chain
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Last week, supply chain solution provider Blue Yonder simultaneously ended its annual ICON/DEVCON conference and announced its acquisition by Panasonic for $7+B. The acquisition put a final exclamation point on Panasonic’s mid-2020 purchase of 20% of Blue Yonder’s stock. But it also signaled to the supply chain world that Panasonic intends to be force that drives widescale adoption of the “digital twin” that will in turn enable autonomous supply chains.
The notion of a “digital twin” has been around for a long time now, and is an outgrowth of research related to artificial intelligence (or “AI”). Basically, the concept is this: any physical thing can have a digital equivalent, and data generated by that digital equivalent can be analyzed. Internet-of-Things (or “IoT”) technologies (that help create digital twins of physical things) and AI go hand in hand to help monitor, maintain, and optimize physical systems.
Panasonic, as the world knows, is a huge consumer electronics company (3rd in size behind Sony and Toshiba). In 2017 the company created the Panasonic Connected Solutions Company division, with the “desire to contribute to our customers’ businesses, by connecting with them and by providing solutions that connect products and people using IoT technology.”
Blue Yonder is the former-JDA, an amalgam of several companies (Arthur, E3, Intactix, Manugistics, i2) which was acquired by RedPrairie in 2012 (retaining the “JDA” name), and which in turn acquired Blue Yonder in 2018 (and retained the “Blue Yonder” name). In 2020, Blue Yonder acquired Yantriks, a customer-facing order management solution.
Now Blue Yonder will be part of the Panasonic Connected Solutions Company, and be called Blue Yonder, a Panasonic Company, according to Blue Yonder CEO Girish Rishi. The focus of the new entity will be to accelerate the implementation of autonomous supply chains.
RSR is among the chorus of voices that has been saying for some time that supply chains must be re-designed in response to the massive changes that the digitalization of the customer-facing side of the retail ecosystem triggered beginning in 2007. The pandemic of 2020 accelerated the need. Consumer demands for localized and even personally relevant assortments and offerings from retailers and their partners have tended to undermine the optimized “mass merchandising” model of the last 40 years. Our company has described the change simply by explaining that, “demand (consumers) used to have to go to supply (the store); now supply has to go to demand.”
At the ICON conference, Blue Yonder CEO Rishi explained it this way: “All business needs a business-to-consumer mindset… Blue Yonder is thinking past you to your consumer.” Blue Yonder’s vision is that “everything” is connected and visible from the point of manufacture all the way through to the consumer’s home. What’s visible can be analyzed and optimized, and that level of visibility plus Blue Yonder’s machine learning (“ML”) engine will enable what Rishi called a “predict and pivot” approach. Mr. Rishi explained that these capabilities make it possible for retailers to make “cost-optimized inventory decisions” (as is being implemented at Sainsbury in the UK).
“Visibility” is where Panasonic comes into the picture. According to Panasonic, the move would combine its internet of things (IoT) portfolio with Blue Yonder’s artificial intelligence and machine learning tools, in response to rising needs for “more intelligent, autonomous, and edge-aware supply chains…”. Logistics and supply chain e-magazine DC Velocity explained that the combination of Panasonics IoT technologies and Blue Yonder’s AI-enabled portfolio should, “…let users unify their supply, demand, and commerce solutions with IoT and edge technologies, and better utilize predictive business insights to pivot their operations in real-time. That vision of an autonomous supply chain has seen rising importance over the past year due to the Covid-19 pandemic, the rise of e-commerce, and the proliferation of data…”.
On the same day that Blue Yonder was winding up its annual conference (this year in a virtual gathering), it was also putting ink to the purchase agreement with Panasonic, but the pending transaction wasn’t openly discussed at the conference. Still, googling the headline on the following Monday didn’t uncover any hyperbolic commentary – in fact, the news seemed barely to cause a ripple. Perhaps that’s due to the former-JDA’s head-spinning path to this moment in time. Or perhaps it is because the business community had already absorbed the idea of Panasonic and Blue Yonder working together.
Maybe the news was not greeted with any particular “noise” is because the retail ecosystem “gets it” – the world needs much more agile and responsive supply chains. That fact was clearly demonstrated several times in the Year of the Pandemic 2020 with its constant parade of disruptions, affecting everything from toilet paper and yeast to COVID vaccinations to semiconductors. Now even consumers know what a supply chain is. And that in turn means that expectations for speed and reliability are on the rise.
Panasonic is betting on that energy to tip the scales towards action by the actors in the retail ecosystem.