Panasonic’s plans to strengthen its Supply Chain Management (SCM) division suggest new offerings on the horizon and potential challenges to its industry counterparts.
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Blue Yonder Files for IPO
Panasonic Holdings Corporation announced last month that it will spin off its supply chain management business by listing it on the stock exchange, with Blue Yonder as its centerpiece. Through the organizational structure listing, Panasonic’s SCM division aims to expand on its leadership position by creating solutions that will elevate the digital supply chain experience through Research & Development (R&D), strategic Mergers & Acquisitions (M&A), and talent investments to achieve growth plans. Combined, the organization’s goal is to contribute to a more sustainable world by eliminating waste in the supply chain and reducing the global environmental footprint of its customers. The announcement comes amid Blue Yonder’s earnings call, showing continued record growth, with Software-as-a-Service (SaaS) revenue growing to US$113 million in 1Q 2022, up 37% compared to 1Q 2021. Blue Yonder added 37 new customer logos in 1Q 2022 and closed 16 new deals over US$500,000.
New Offerings on the Horizon
The SCM business centered on Blue Yonder is an important pillar of the Panasonic Group’s business. The organizational and capital structure of the listing will be based on the premise that the new company is positioned as an important consolidated subsidiary and that Panasonic holds a majority of voting rights. The stock exchange listing will include related parts of Panasonic Connect’s Gemba Solutions company and Technology R&D Division. This organizational structure will enhance solution competitiveness and delivery.
With the listing, Panasonic SCM aims to launch several edge-aware, SaaS microservices and solutions across its Luminate Planning, Luminate Commerce, and Luminate Logistics solutions. These include:
- Cognitive business planning capability to give customers the ability to better predict, plan, control, and prioritize their supply chain decision-making.
- Luminate Warehouse Management System (LWMS) focused on delivering modern-day fulfillment needs through the deployment of seamless, prescriptive workflows. It enables fulfillment sites to maintain inventory accuracy above 99%, along with the speed and efficiencies of fulfilling outbound orders, but in an agile, scalable Warehouse Management System (WMS).
- Additional Order Management System (OMS) microservices supporting yard management and digital tags in-store for retail operations.
Dynamic Digital Supply Chain Industry
The SCM market has had a lot of interesting developments, with big players making moves and reaching commendable milestones. Supply chain visibility platform FourKites had a record growth year in 2021 with triple-digit growth in shipments and 50% growth in new customers. Meanwhile, Athens-based WMS vendor Mantis merged with logistics Information Technology (IT) specialist ecovium, a provider of Supply Chain Execution (SCE) software and hardware solutions. The merger is said to support ecovium’s goal of establishing the German-headquartered company internationally as a provider of sustainable logistics solutions.
With major counterparts advancing in the emerging digital SCM industry, Panasonic’s SCM division is well-positioned to grab a bigger chunk of the industry. One of the major global growth plans for Panasonic SCM is to steadily grow Blue Yonder’s portfolio through R&D, as well as well-planned partnerships and acquisitions. Expanding micro-services and strengthening cooperation with services from other companies with enhanced end-to-end coverage in the supply chain will be the focal point. Panasonic SCM will look to venture further into bolstering the e-commerce and last-mile segments as well.
In addition, increasing the business value of SaaS offerings will be key as well. Strengthening the Luminate platform via continued support from leveraged Panasonic hardware will undoubtedly be the key. Panasonic’s devices, smart sensing, facial recognition, robotics, and Blue Yonder’s Artificial Intelligence (AI) and Machine Learning (ML)-driven software solutions should and will continue to aim to solve customer challenges, as they enhance a lot of use cases. Panasonic’s plan of consolidating its supply chain arm and leveraging the organization’s resources can prove to be a breakthrough in terms of executing a successful digitalized SCM strategy, and industry counterparts should be looking to emulate something similar.