JDA Software recently formed a new global 3PL business unit to focus on sales and product development for this market sector. Unit leader Peter van Merode discusses the strategy behind this move and shares views on the global 3PL market.
JDA Software’s 3PL customer based has increased over the years, especially with its acquisitions of i2 Technologies in 2010 and Red Prairie in 2012. “We have around 250 to 300 3PL customers, a few of which are true global operators,” says van Merode, vice president of industry strategy at JDA and head of the global 3PL unit.
Forming a focused business unit will enable JDA to grow this business and to better serve its 3PL customers, which have a different engagement model than other software customers, says van Merode. All 3PL activities will be consolidated into the new business unit with a dedicated go-to-market strategy and specialized teams.
As the unit develops, it will introduce specialized solution sets based on the company’s current best-of-breed solutions for transportation, warehousing and supply chain planning, says van Merode. “We also will have specialized consulting and implementation teams focused on the 3PL marketplace,” he says.
Global 3PLs today are facing new challenges as supply chains become more complex and consumer behaviors change, says van Merode. “Today’s solution sets do not fulfill the requirements that shippers are imposing on logistics providers. Additionally, they don’t give 3PLs the tools they need to deal with the consequences of big data in areas like product security and safety. As always, these companies are under pressure to do more for less money, so they also need to optimize and standardize solutions.”
One way that JDA believes it can help 3PLs optimize performance is by having more tightly integrated functionality. “TMS and WMS are still separate functions and products and we feel 3PLs can operate more effectively by integrating these products,” says van Merode. “We also believe that today’s market requires 3PLs and shippers to respond much faster to events in the supply chain, which means that the planning functionality has to come much closer to the execution layer.” JDA will bring a next-generation level of solutions to the 3PL marketplace that will tighten the integration of planning and execution to enable very rapid response to changing conditions or consumer behavior, he says. “Our goal is to deliver systems that will allow 3PLs and shippers to respond almost immediately to whatever change is occurring in the supply chain.”