Brains Meet Brawn in Retail & Supply Chain
The changing supply chain landscape
The emergence of AI and Machine Learning in the supply chain is changing the way managers approach managing inventory, production, distribution and selling to optimize the customer experience. Data from customer promotions, weather, local events and holidays also present a plethora of variables to account for in estimating demand across hundreds or thousands of demand points (stores, web sites, catalogs, etc.) and across hundreds or thousands of SKUs/items. Further, this estimate will never be 100 percent accurate, so making decisions about how to manage inventory must incorporate this uncertainty and the potential risk of lost sales or potential spoilage.
This poses a significant challenge for an average supply chain or retail planner who can likely think of 3-10 variables across a handful of products to make rapid inventory decisions, usually assuming some mid-point of a demand estimate, which ignores a significant portion of the potential outcomes. Improving the quality of such decisions to incorporate these factors, at the scale of an enterprise supply chain, is beyond the capacity of the human brain to address in any timescale feasible to drive a modern supply chain environment.
Introducing JDA Luminate
JDA’s Luminate platform is intended to be the cornerstone of the next generation of supply chain systems – one that constantly ingests data and the events from the environment, understands the ramifications to the supply chain, and reacts with the optimal decision to improve enterprise performance and delight customers. Truly an “autonomous” supply chain™.
To power this new platform, a new breed of algorithms is needed. Algorithms which incorporate machine learning to better model demand, to understand the tradeoffs of different actions in this environment. And do so at an unprecedented scale.
JDA, Blue Yonder and the Autonomous Supply Chain™
Once regulatory approval has been obtained, the acquisition of Blue Yonder will be a major step ahead for JDA in realizing its vision of the truly autonomous supply chain. Blue Yonder brings a mature AI/ML engine, combined with decision logic to optimize business results that has been validated at a number of customers. Built on Microsoft Azure, its solution is an efficient, cloud -native architecture that is compatible with and will power JDA Luminate SaaS solutions, and will provide JDA’s leading solutions portfolio – spanning supply chain/retail planning, execution and delivery – with a rich set of ML/AI capabilities.
Blue Yonder’s proven AI technology had its origins in particle physics research at CERN. There, the need was to filter through a huge amount of event data to detect the true underlying signal and to predict yields in different experiments. That same challenge applies to retailers and manufacturers today in finding the drivers to demand; Blue Yonder has developed techniques to identify the factors that really contribute to the process, and the result is a model which is both accurate and efficient to apply on a very large scale.
Today, Retail. Tomorrow, Many Vertical Applications
Blue Yonder has enabled its largely retail and CPG customers to derive real value by applying these techniques in the areas of demand estimation, retail replenishment, and markdown pricing. Going forward, with the broad footprint of supply chain capabilities of JDA and 4,000 global customers across manufacturing, logistics, retail and more, expanding the usage of Blue Yonder’s technology across JDA’s portfolio will enable JDA to deliver to its customers the next generation, autonomous supply chain at both scale and speed.
#Offwego into the wild blue (digital) yonder indeed!
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