The supply chain software landscape is changing rapidly. Today, Blue Yonder, a leading provider of supply chain planning and today execution solutions, announced signing an agreement to acquire One Network Enterprises for approximately $839 million. This is a significant acquisition that will change the supply chain software landscape.
Blue Yonder had revenues of $1.28 billion in their last fiscal year. Their SaaS revenues grew by 17% on a year over year basis. One Network is a much smaller company than Blue Yonder. In the supply chain planning market, Blue Yonder is the third largest supplier. One Network has a market share of less than 2%.
One Network provides supply chain planning, execution and a multi-enterprise supply chain network solution. When a MESN solution is combined with planning and execution, the software solution is capable of reacting with much more agility than traditional supply chain software. One Network offers the most agile solution in the market.
The pandemic taught companies around the world the need to be able to react with agility and resilience to unexpected shocks. Supply chain software firms have been working feverishly to incorporate this functionality into their solutions.
A multi-enterprise supply chain network platform provides network-based supply chain applications. It is a solution built on a public cloud, many-to-many architecture that supports a community of trading partners. More than 150,000 organizations are connected to One Network’s network including over 49,000 suppliers and 20,000 carriers. More 5.6 million transactions that impact supply chain operations occur every day on the platform.
Often a supply plan cannot be fully executed. Unexpected events occur. There can be surprises that potentially offer a better upside—demand is higher than expected, it is possible to raise prices without affecting demand based on what is happening with competitor products, technology has allowed manufacturing capacity to ramp up faster than expected, etc.
But more commonly, there are downside surprises—customers lower the volume they want on an order, delay their order, ask to rush the order; there are manufacturing problems, logistics problems, staffing issues, to name the most obvious downside risks.
When disruptions occur, MSCN can be used to either orchestrate a new plan or to reoptimize the existing plan. Orchestration is the use of collaboration and visibility to manually rework schedules.
But better than orchestration is optimization. Optimization is more complex; it involves collaboration, visibility, an understanding of supply chain constraints and costs to come up with the best schedule that hits service level goals at the lowest cost. What One Network offers, and what Blue Yonder will get from this acquisition, is the ability to reoptimize plans when unexpected events occur.
This is the way Blue Yonder describes what the combination of One Network’s Digital Supply Chain Network and Blue Yonder’s applications will accomplish. This new ecosystem will:
- Offer “real-time, multi-enterprise optimization, orchestration and collaboration both inside and outside an organization – across multi-tiers from customers to carriers to suppliers to the suppliers’ suppliers.”
- Allows “customers to move from the order planning phase to the fulfillment phase instantly, eliminating the time gap that normally occurs from entering the order to beginning the physical fulfillment. Customers can also tap into a more complete and actionable data set across the multi-enterprise ecosystem by setting up alerts, benefitting from automation, and leveraging generative artificial intelligence (AI).”
- Provides “real-time visibility across the supply chain, allowing customers to take immediate action via upstream and downstream collaboration.”
- Unifies “disparate data silos, enabling a holistic, executive-level view into the entire supply chain – resulting in the ability to automatically optimize and execute through prescriptive real-time decision-making technology.”
The multi-tier capabilities spoken of above, does not come natively from One Network. The One Network solution mostly enables swift resolution of problems occurring one step back or one step up in a company’s supply chain.
The multi-tier visibility to risk depends upon the partnership Blue Yonder has with an advanced supplier risk management solution from Everstream Analytics. Achieving this visibility to problems multiple tiers up a supply chain has, until recently, been a very difficult problem to solve. The ARC Advisory Group believes that leading supplier risk management providers are being actively scouted for acquisition by supply chain software vendors.
This is not the first combination of MSCN and supply chain planning. Kinaxis, a leading SCP supplier, bought OMP, a MSCN vendor in August of 2022 for approximately $45 million. SAP, the market leader in SCP, is building out their Ariba network to include MSCN capabilities.
Amazon Web Services recently entered the MSCN market. The company has plans to offer a demand planning applications to go along with the MSCN solution.
Blue Yonder was acquired by Panasonic in 2021. After a period of quiescence, Panasonic agreed to aggressively invest in the business. This deal, when completed, will mark approximately $1 billion in M&A investments since the fourth quarter of 2023. This announcement comes on the heels of Blue Yonder’s acquisition of flexis AG, offering factory planning, sequencing and slotting capabilities, and Doddle, offering returns management and reverse logistics solutions. Blue Yonder is also aggressively hiring, building out, and rearchitecting their existing products.
Blue Yonder’s CEO Duncan Angove has spoken to industry analysts about the opportunity to gain market leadership in the supply chain software space for a company willing to make big bets. The company believes that there is a huge addressable market, approximately $130 billion, for supply chain solutions that can turn uncertainty and disruption into opportunity for their customers. Once the next generation of supply chain software emerges, and existing or new customers begin using the platform, Mr. Angove believes these customers are apt to be locked in as Blue Yonder customers for many, many, many years to come.
The largest challenge for Blue Yonder will be not just integrating these diverse product sets but componentizing them into a unified platform offering. This historically has taken years. But based on Blue Yonder’s aggressive investing, they may be able to significantly accelerate the timeline.
