According to a recent media report, global electronics giant Panasonic plans to acquire American supply chain software company Blue Yonder(formerly JDA) for $6.5 billion, in order to enhance the value added and market competitiveness of its products through supply chain enhancements. If the deal goes ahead, it would be Panasonic's biggest acquisition in a decade and the biggest in the history of the global supply chain software industry. In December 2020, software company Coupa announced that it was acquiring supply chain planning company LLamasoft for $1.5 billion. Why enterprise giants frequently enter the market, so optimistic about the supply chain software market?
The global market is growing rapidly and supply chain is becoming digital
Across the international market, the potential of the supply chain software market is already visible: valuates.com reported that the global supply chain software market was worth about $15.85 billion in 2019, and is expected to grow by about 10% annually to reach $37.41 billion by 2027. Such exponential growth cannot be achieved without integrating emerging digital business innovations, such as intelligent algorithms, machine learning, Internet of Things and other technologies, according to the report.
In addition, in the context of globalization and the impact of COVID-19, many companies have to focus on the company's resilience to risk events. In order to restore the global economy, enterprises need to achieve local autonomy of supply chain, so as to enhance the anti-interference ability of enterprise supply chain.
At the same time, it is worth noting that the modern supply chain is still faced with many challenges, including rapid changes in market demand, over-personalized consumer demand, inventory pressure, labor shortage, weak sales and low operating efficiency. Enterprises need to reconstruct "people, goods and fields", and obtain more optimized solutions through new technologies such as artificial intelligence, big data and cloud computing, so as to make more accurate forecast demand and delivery time, route planning, production scheduling and storage location. According to the relevant data forecast, in the next few years, the application of digital supply chain will reduce the operating cost of enterprises by more than 30%, increase the accuracy of sales by 50%, and reduce the inventory by 75%. It can be seen that supply chain digitization is the general trend and the focus of global enterprise competition.
China's supply chain market enters after us
In contrast, China's supply chain market, the leapfrog development of Chinese Internet e-commerce enterprises has promoted the take-off of China's supply chain software market. Under the new retail scenario, the "digital" innovation ability of Chinese enterprises is far better than that of foreign countries. In terms of information technology for commodity and supply chain management, China's retail technology is also developing very fast: whether it is sales planning, category portfolio management, pricing and promotion optimization, demand forecasting and inventory optimization for the front desk, or supply chain management, route planning and logistics transportation for the back office, it puts forward higher quality requirements for enterprise development.
Similar to the overseas situation, Chinese enterprises also face the urgent demand of supply chain transformation and optimization: In China, both the retail and fast-moving consumer goods industries with first-mover advantages and the industrial manufacturing industries that come after US are in urgent need of optimization and upgrading of the whole chain from prediction to sales to production. However, China lacked similar supply chain service providers before, so it was forced to choose European and American brands with high prices and "not suitable for local conditions".
In addition, the construction of digital supply chain is not the simple superposition of various new technological means, but the key point is that the management needs to change the way of thinking from the traditional way of "firefighter" to the idea of overall coordinated development, to break the barriers of all links of the supply chain, to the collaborative management of the whole scene and process of the supply chain, to let the data flow in the whole chain, and to realize the closed loop of business.
Local brands are emerging to create supply chain software belonging to China
In fact, with the expansion of the market demand, our local service providers in the field of supply chain has emerged. Taking the artificial intelligence decision-making technology as an example, Sanshu Technology has successfully served nearly 100 enterprises in retail, fast moving consumer goods, logistics, e-commerce, industrial manufacturing and other industries by relying on its leading ability of large-scale optimization and complex decision-making. The digital supply chain upgrade capability has been implemented in many benchmark customers such as Xiaomi, Jingdong, SF Express, Deppon, Yonghui, AB InBev, Carlsberg and Holliyou.
Sanshu Technology intelligent decision solution platform is independently developed, including revenue management, inventory optimization, production planning, network optimization, transportation optimization, intelligent location and a series of intelligent decision solutions in the industry, has a strong solution to the supply chain end of the diversification management problems. The company built an intelligent supply chain management system for a well-known domestic fast-moving consumer goods brand, greatly improved the efficiency of supply chain planning, realized the real-time and seamless connection of business in all channels, increased the accuracy of demand forecast by 10%, increased the inventory turnover rate by 7%, reduced the out-of-stock rate by 5%, and reduced the transportation cost by 10%.
From products to services to customers' revenue, it is not difficult to see that building a digital supply chain can not only help enterprises reduce costs and increase efficiency in operation, but also create more revenue and profits for enterprises. At the same time, it also confirms that the local intelligent decision service provider represented by Shanshu Technology has been comparable to European and American brands in overall technology and service ability. The move of Panasonic's planned acquisition of Blue Yonder tells us how enterprises can maintain long-term rapid development in the future, how to create differentiated market competitive advantages, and the upgrading and transformation of supply chain becomes an important part.
