New JDA solution addresses complexities of bid optimization processes
December 08, 2010
Nearly a year after the completion of the acquisition of supply chain management software and services company i2 Technologies by JDA Software Inc., a provider of demand chain technology services, JDA said today it is embarking on some of the initial steps of is post i2 acquisition product integration roadmap with the release of JDA Logistics Procurement.
According to JDA officials, JDA Logistics Procurement leverages products developed by i2 and Manugistics, whom JDA acquired in July 2006, in conjunction with products developed through JDA’s Transportation and Logistics Management platform, which, in total, provide shippers, carriers, and 3PLs “with a comprehensive planning and execution platform…to more effectively manage the complexities of a multi-modal logistics
When the JDA-i2 deal was made official last year, JDA CEO Hanish Brewer said it would allow JDA to accelerate innovation and carve out a strong market leadership position, as well as be a source of innovation and service in the supply chain software market, given the emphasis on strong IT platforms as a result of economic conditions creating a strong focus on efficiency and supply chain operations globally.
“What we did once the acquisition [of i2] was completed was go though a planning process to think about how we would seek to merge these practices into one synergistic unit from an organizational perspective and a solution perspective,” said Fabrizio Brasca, JDA vice president, global logistics, in an interview. “We looked at ways where we could take the best of both worlds and converge them into what we called a ‘super-set solution’ that could bring added benefit to our customers.”
Company officials said that JDA Logistics Procurement provides shippers, carriers, and 3PLs with various services, including bid collaboration, contract management, and additional optimization capabilities through either a software licensing or software-as-a-service platform.
Brasca said that the i2 solution had a tremendous history in optimization and investment in workflow and multimodal capabilities as well as a global presence in the bid procurement space. And on the Manugistics side, he said JDA had some overlap and unique capabilities around contract management, centering on contract creation, template maintenance and maintenance of longer-term agreements, which he said were synergistic with the i2 technology and could be capitalized into one entity.
“The other part is…expanding the integration we had procurement into our TMS offerings and expand that to include the Manugistics customers as well,” said Brasca. “If you use the solution as a hosted model or as a licensed solution to create a bid or negotiate rates or service level commitments, we can take those results and put them into either TMS with an automated bridge.”
The primary objective of the new JDA Logistics Procurement Solution, according to Brasca, is to allow for a collaborative environment between shippers and carriers to negotiate network rates. And the discrete nature of this offering is two-fold: one part being the ability to different rate constructs across geographies and the other part being able to fine-tune capabilities by mode, with respect to individual rate characteristics for each mode.
The optimization component for this solution is geared towards bidding engagements in order to bid networks rather than lanes, with a focus on cost and service across those networks, said Brasca.
“It has to be easy for the shipper to model their network with the right level of granularity to make these bids worthwhile, and that is what this solution does very well,” he explained. “The thing about transportation is it is not just about cost, as there is a cost-service tradeoff component. You want to get the best rates subject to the variability and the complexity of your networks, whether it is peaks and valleys of demand, capacity demands, capacity constraints, and other things.”
Providing usability for the carrier community is another driver as well, said Brasca, so that they can participate in bid processes in a very intelligent manner and meet service level commitments over a long period.
Carrier rationalization and inviting the right carriers is a core step in the bid optimization process, noted Brasca. And once that happens the JDA software enables the entire workflow around making sure carriers are participating and are involved in bids and know what to do and the second part of it is to establish what the bid needs to look like, meaning the demand being asked to bid on, the specific lanes, and demand trends to better gauge what is required.
“That modeling is very important, because it becomes the bid package,” said Brasca. “Once that is established, the software allows the workflow between the shipper and the carrier to communicate that bid package and allow the carriers an intelligent method of being able to understand and digest those bid packages and intelligently bid back for individual lanes or combination bids back to the shipper.”
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!