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Dan Gilmore

Editor

Supply Chain Digest

Gilmore's Supply Chain Jab

Gilmore is Editor and President of Supply Chain Digest, which he founded in 2003.

 



Feb. 2, 2017

In Modest Surprise, JDA Brings In New CEO Girish Rishi to Run Industry's Largest Supply Chain Software Firm


New Exec has Data Collection Roots, See Omnichannel and Last Mile Logistics as Key Market Opportunities

 

JDA Software, by far the largest supply chain focused software provider, with annual sales of somewhere around $1 billion, announced current CEO Bal Dail was stepping down, to be replaced by Girish Rishi, an experienced executive who has been on the periphery of supply chain but not really been at a major software company.

I wasn't expecting this change, but am not surprised either, as I will explain later.

Some history here is in order
.

Gilmore Says...

Is that "last mile" train already leaving the station (not obvious yet if the answer is Yes), or is this where Rishi is going to push JDA to go next, or perhaps better said to accelerate current efforts?

What do you say?

Click here to send us your comments

Longtime JDA CEO Hamish Brewer, who had architected the company's acquisitions of first Manugistics and then i2 Technologies that really led JDA to transition from a retail POS and merchandising vendor to a supply chain company, was pushed out in May of 2014.

The reason cited was that Brewer was not moving fast enough on a series of strategies - which can be said to have largely been grouped around getting closer to customers - and that someone else was needed to accelerate the transformation.

Dail was then chairman at JDA and a partner at private equity firm New Mountain Capital, which owned JDA after RedPraire, privately owned by New Mountain, in effect acquired the then public JDA in late 2012 and took the combined companies private.

Indeed, challenges in the integration of RedPrairie into the new company - dominated by JDA execs, including of course Brewer - led to some rocky financial times for JDA, and was in part behind the need for transformation at the company.

Dail was named interim CEO when Brewer was let go. I predicated in these columns and to Dail himself at the time that he was likely going to wind up as permanent CEO. Why? I got the sense Bai was enjoying the role, but more importantly, for reasons I won't spend time on here, that there was not much upside and a lot of downside to taking the JDA CEO spot right then, chasing away I suspect top potential candidates.

Additionally, while interim CEO and I think a bit before, Dail had orchestrated a number of organizational and personnel moves, bringing in a whole new leadership team (a few from inside JDA).

That meant a new CEO would have had his or her hands fairly tied for a while in terms of organization and key execs - and new CEOs want freedom to make those decisions. In fact, one of the first things they do is to make changes in top execs and organizational structure.

So as I predicted, after a fruitless search for a new CEO, Dail become permanent CEO in late October of 2014.

Since then I think JDA has been generally moving in a positive direction. As I private company, you can only go by what they tell you, but I have heard from several sources inside the company that 2016 was a fairly strong year financially.

In the press release announcing Rishi as CEO, JDA said "In the last few years, JDA has seen accelerated software demand bookings growth, increased profitability and substantially expanded its global customer base."

That's a bit vague, but my sense is things are in fact going pretty well for JDA right now.

So why the change at the top? That is no clear answer yet to that question.

I was unable to make the press conference call with JDA on the news Wednesday afternoon, but would have asked just that if I had been on-line.

I did listen to the short replay of the call the next day. I say short because none of the press asked any questions after Rishi made some brief opening remarks. In fact, in a similar call in 2014 announcing Dail as CEO, I was the only one then to ask a question.

Odd.

So since I couldn't ask my question, we will have to speculate. My speculation will start with the fact that JDA received a substantial investment from another private equity company, Blackstone, last August. This allowed JDA at the last minute to avoid being acquired by Honeywell, as had all but been announced.

A transaction of some kind had to be done to help JDA get relief from a debt overhang of some $2 billion, with lots of its cash flow going to debt service instead of product development or marketing.

I wrote at the time that while the move was good for JDA employees and customers versus what would really have been an odd fit inside Honeywell, the price was having "another cook in the JDA kitchen" - that being Blackstone.

When you spend hundreds of millions to acquire a share in the company, you will have some thoughts about how it should be managed and who will head the ship.

It could Blackstone decided someone else was needed to take JDA to the next level.

It also could be that having all told done a good job in changing JDA's direction and culture, Dail had simply had enough of the crazy software world, and I wouldn't blame him for that.

Before joining New Mountain, Dail had been a successful insurance industry executive, among other roles. All industries have their own stresses, but software has them in bunches.

However, It's not like Rishi himself has a deep background in software.

Most recently, he was at Tyco International, responsible for the firm's global retail solutions (not sure what all that involved, but includes for sure some EAS and RFID solutions) and its North America building automation business.

All told, Rishi was managing a combined $4 billion business unit, so he has experience with running a much larger firm than JDA.

Rishi also worked years ago for the old Symbol Technologies (where I intersected with him just a little bit), and then at RFID company MATRICS, later acquired by Symbol. Back at Symbol, he went to Motorola Solutions when it acquired Symbol, then was an executive at Zebra Technologies when it acquired Motorola.

Then came the move to Tyco.

In the press conference, Rishi said two things attracted him to JDA.

First were all the opportunities in omnichannel, both in the retail sector and especially beyond. Nothing surprising there.

More interesting, Rishi cited the opportunities to digitize "last mile" logistics. Here we probably see some of Rishi's data collection roots coming through, as he enthusiastically talked about the opportunities to "light up" logistics execution through the Internet of thing (IoT) and other visibility tools. His experience in unning Tyco's home automation business may also have moved Rishi's focus to the opportunities with IoT.

What is most interesting about that is that this would be really a very different business direction for JDA, which of course was primarily a supply chain planning company before it acquired RedPrairie and its WMS business.

Is that "last mile" train already leaving the station (not obvious yet if the answer is Yes), or is this where Rishi is going to push JDA to go next, or perhaps better said to accelerate current efforts? The traditional planning market is very mature and well saturated, so perhaps this is a new place JDA can go to drive growth - but again, it is very different.

When the new CEO comes in, there are usually some changes in the executive ranks below that. Maybe this will be the exception, but new CEOs usually have some execs from pervious posts that they trust and want to join the team.

Will keep you posted on that one. Congrats to Rishi. Look forward to learning his vision in more detail.

 

Any comments on  Gilmore's Blog post? Send them in at the form below.


Your Comments/Feedback

Srihari

Senior Consultant, Infosys
Posted on: May, 22 2016
Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.

Mike O'Brien

Senior editor, Access Intelligence
Posted on: May, 26 2016
Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard

Marketing Director, Inovity
Posted on: Jun, 27 2016
Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann

Strategic Alliance Manager, Schneider Electric
Posted on: Aug, 19 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 

Jo Ann Tudtud-Navalta

Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines
Posted on: Aug, 21 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".





Sandy Montalbano

Consultant, Reshoring Initiative
Posted on: Aug, 24 2016
U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm

Robert

Transportation Manager, N/A
Posted on: Aug, 30 2016
 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen

Mr, NHLS
Posted on: Sep, 14 2016
SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson

Partner, Warehouse Coach
Posted on: Sep, 15 2016
Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 

Jade

Admin, Fulfillment Logistics UK Ltd
Posted on: Oct, 02 2016
Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis

President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at ZipXpress.net)
Posted on: Oct, 03 2016
Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.

Blaine

Inventory Specialist, Syncron
Posted on: Nov, 16 2016
Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com

Bob McIntyre

National Account Executive, DBK Concepts LLC
Posted on: Nov, 21 2016
This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 
 
 
 
 
 

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