Ok, I am finally back as promised with part 2 of my trip report from the JDA Focus User Conference in Orlando a few weeks ago.

In part 1, I reported and commented relative to news about JDA the company, in this first conference post the major merger with RedPrairie late last year.

In part 2, I am going to summarize a number of the most interesting breakout sessions.
Why two parts for one software conference some (mostly JDA competitors) have asked? Pretty simple: with the merger, JDA has become an even bigger force ($1 billion in revenue, thousands of customers); (2) I needed almost a full column to describe the new JDA and its strategies; and (3) the breakout sessions I will summarize here I am confident will provide good insight for JDA and non-JDA customers alike.

First, I am a sort of unofficial member now of JDA's Demand Optimization Council (DOC), a group of many of JDA'S most advanced supply chain customers in the consumer goods to retail sector. It's a more than half day meeting on Sunday before the real opening day of the show, and it really is one of the best sessions I attend each year, run very capably by JDA's David Johnston.

I am very limited in what I can report, of course, but can summarize key trends and themes, with the focus of the DOC this year on the currently hot topic of supply chain segmentation. In general, I would say the company presentations largely suggested that for most, such segmentation largely equals different sales channels, which certainly makes sense and is easy to understand. There is also some segmentation in terms of products, either in terms of say service levels depending on velocity, and/or flow path optimization for how different SKUs get into and through a company's supply chain.

Certainly, in my view, the concept of supply chain segmentation is different and perhaps less relevant for retailers than it is for manufacturers, though the concept of "store clustering" some have embraced is certainly a form of segmentation.

On the manufacturing side, it does not appear many are really thinking yet about segmentation in terms of really breaking customers into groups based on what they really value (say within a channel), and then tailoring supply chain services and prices accordingly. More on this in a column soon.

Two other quick notes from the DOC: First, as it does every now and again, the question of why manufacturers need to even forecast at all if a retailer can give them a good forecast came up, and it is a fine question. Second, it appears some grocery chains (two large ones for sure) are embarking on programs relative to GS1-128 bar code labeling tied to advanced ship notices that have been around in other retail sectors for about twenty years. Fortunately, it appears the labeling will only be at a pallet not carton level, else the impact on manufacturers would be huge.

JDA's Fred Baumann and I basically repeated a presentation we had done together at CSCMP's annual conference last fall, on building the supply chain from the shelf back. The basic idea: improved computing horse power, some new algorithms, and the overall drive to a more integrated supply chain really now are enabling actual POS data at the store-level to drive manufacturing supply chains all the way back to the factory schedule.

But we are very early in the game. Most companies are really just getting started, and many haven't moved at all relative to embracing this vision. There are issues of trust on both sides. In fact, at the 2012 DOC meeting, some retailers that had started sharing POS and time-phased order forecasts were complaining that since this was supposed to drive savings at the manufacturers, why weren't they seeing any price decreases as a result?

Also noteworthy is that before the JDA-RedPrairie merger, JDA had such a store-level solution, as did RedPrairie through its joint venture with Andre Martin (inventor of distribution requirements planning three decades ago) on Martin's "Flowcasting" approach and technology. The new JDA now of course holds that 50% stake in the JV. Will Flowcasting be embraced by JDA? That is not yet clear, though the fact that Martin presented a Flowcasting case study on Kraft at last week's Gartner Supply Chain Executive conference under the JDA name certainly gives some indication where this is headed, though several sources told me that as of last week, a deal was not yet done.

I saw a very interesting presentation from Texas Instruments' Gushaman Baweja on how TI has rigorously standardized its supply chain processes and metrics across its 6 or 7 main business units, largely in reaction to the big disruptions the company like others saw first with a large (but it turned out short-lived) drop in demand in late 2008, and then supply disruptions in Japan and Thailand a few years later.

TI views such standardization as key to achieving greater flexibility, but what was most interesting was the company's development of supply chain "playbooks." What is a playbook? It is a prescriptive "how to" as to what a manager or executive needs to do when a given supply chain situation or scenario is encountered. The playbooks lay out a step by step process on what decisions or analysis need to be made (such as if a supplier goes down), and at each step what information is needed and where within TI's IT portfolio that information can be found.

Very cool. They have built many playbooks, with more to go. My only question is how they found the time to get it done.

Canadian retailer Loblaw's Chris Lucky gave a good presentation on the company's supply chain transformation. I always thought of Loblaw's as a grocer, but it turns out they own many "banners," a number of which are apparel or other non-grocery.

To put it bluntly, three to four years ago, Loblaw's operated a very backwards supply chain, far from any notion of demand-driven. DCs simply replenished back in whatever a store ordered, most supplier transactions were handled manually, inbound and outbound transportation weren't linked, etc.

Three years later it has completely transformed into an integrated, demand-driven supply chain, and the speed of that transformation, which involved deploying a slew of JDA products, is part of what is interesting about this story. From laggard to world class in three years - that's impressive. Forecast accuracy is up 20%, DC inventory is down 20%, 65% of all POs are created automatically now and other improvements.

The other point to me is that when you hear this, you just think "this is the way it has to be." Yet, many retailers have yet to really embrace this thinking. I am not sure why, but will say that in this era, you better do it yourself before a private equity company comes in and does it for you, which many have in recent years.

Amway's Jocelyn Josephson gave a very straight forward and very good presentation about the company's eventual success with JDA's inventory optimization (IO) solution. IO is pretty hot right now, and Josephson said Amway has been able to reduce its safety stock levels about 10%, with more to come as the roll out expands to other regions and into raw materials.

Her lessons for anyone considering IO: (1) get the data integration done first rather than try to deploy IO and do the data integration in parallel; you will have issues if you don't get the integration done first that will actually take longer in the end; and (2) do not develop the system from a US or whatever region's point of view only. That's what Amway initially did, and then found out the way business is done say in Asia required something different, so the modeling/config had to be redone. Very refreshing to hear someone admit where they went astray - most won't do that.

I am out of room. There was a good case study from OfficeMax on the company's very successful rollout of the former RedPrairie's workforce management solution both in store and in its DCs we will cover as an On-Target article soon


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