Send Feedback Print Article
Cover Story Page 1 of 2
JDA celebrates 10 years in Asia
This year, JDA Asia celebrates 10 successful years in Asia — 10 years of delivering profit-driven solutions to many of the region’s leading and up-and-coming retail chains. RETAIL ASIA finds out how it differentiates itself from other software providers.
“On 1 August 1994, we opened up a very small 800sqf windowless office in the World Trade Centre (since renamed the Harbour Front Centre),” begins Lai Kin Chee, JDA’s vice-president, Asia. “Within a month we signed our first retail customer, Seiyu of Japan, which was opening its first department store in Singapore. It was a huge challenge because Seiyu is a very experienced retailer and there was a tight deadline that could not be missed.”
Somehow, Chee and her team rose to the challenge and set the pattern for dozens of retailers to come by delivering on time, and JDA has not looked back since.
Today, JDA is the standard for excellence in the retail industry across the Asia-Pacific with over 263 customers in the region. Some idea of the reach and breadth of JDA experience can be appreciated by simply considering a list of some of the retail companies that have chosen JDA in the past 10 years:
||Coles Myer Group, Woolworths (Big W), Strandbags
||Cris Group (Home Way, Home Club), Orient, Shanghai Lotus, Wang Fu Jing
||AS Watson-Nuance Duty Free, Sky Connection Duty Free
||Shopper’s Stop, Globus
||Aeon, Right On
||Metrojaya, Giant, Guardian, Tesco Malaysia, BTC
||Shoemart, Robinsons, Rustan’s, Metro Gaisano, Gaisano South, Duty Free Philippines, Mercury Drug Store
||Seiyu, Metro Singapore, Cold Storage, Yamaha Music Asia
||Onking, Test-Rite, Retailing Businesses (Hola, B&Q International, Tayohya)
||Central Retail Corp, Tesco Thailand
What is it that persuaded all of these industry leaders to select JDA? Lyn Schmidt, JDA’s regional vice-president/managing director, responsible for Asia-Pacific, suggests: “It’s not any one thing; it’s how we bring it all together. JDA has always built the most advanced products that are designed specifically for the retail industry.
“We have built up a team of Asia-based experts, most of whom have more than five years’ experience with JDA and we provide a global support service that helps everyone of our customers maximise their investment in technology. When you put all that together, you have a recipe for success, but it’s easier said than done!” An assertion proven by the attempts of many other companies who have come and gone over the years.
What about the next 10 years?
Having achieved market leadership, it might be easy for JDA to sit back on its laurels and enjoy its success, but Chee insists otherwise: “Now more than ever, Asian retailers face a real and growing threat. The global retail industry is going through an accelerating process of consolidation and the winners are reaching out to new markets to help sustain their demanding growth plans.
“Already, it is estimated that over 10% of global retail spend goes through the top 30 global super-retailers and, chief among them, Wal-Mart is now the largest company in the world. The retailers of Asia cannot afford to be complacent. Their markets will someday become targets for this global phenomenon and their only chance is to be armed with the same advanced tools that these behemoth companies rely upon. That’s where JDA comes in and where we can offer a path to greater success for our customers.
“This is what makes JDA special and why I feel as passionate about our mission today as I did when we started in 1994.”
JDA solutions deliver huge benefits: US$1-billion return on investment for one global retailer:
JDA systems are used by 60% of the world’s top 100 retailers. These companies are able to achieve levels of performance and efficiencies that would have been impossible just a few years ago through advanced exploitation of the world’s most sophisticated technology designed specifically for the retail demand chain.
“Our systems have been shown to remove up to US$1 billion of excess inventory in the world’s leading retailers. No other company can claim results like this,” explains Schmidt.
“Our optimisation solutions are the most advanced and the most proven in the industry. For instance, our forecast-based replenishment systems will typically reduce inventories by 20%-30% and at the same time improve service levels by around 3%-5%. It’s not magic, but no one else can claim such outstanding results.”
“Many retailers in Asia are still grappling with basic issues such as stock visibility,” warns Schmidt.
Shopwise launches profitability opportunity with JDA’s E3 Warehouse and Store Replenishment Solutions:
Shopwise Supercenter, part of the well-established Rustan Group in the Philippines (the group operates 70,000sqm of aggregate selling space in the Philippines), has licensed JDA’s E3 Optimised Solution in Advanced Replenishment and Demand Forecasting for Stores and Warehousing. Currently, the merchandisers and store personnel are undergoing training for the system to go ‘live’.
Shopwise Supercenter is the latest member of the Rustan Group of Companies, representing yet another of the group’s pioneering foray into an emerging frontier of discount retailing. The 11,000sqm Shopwise Supercenter, the anchor store of the Festival Mall, combines the operations and value propositions of a supermarket, wet market, department store, warehouse club, all rolled into one sleek streamlined package.
Commenting on the licensing of JDA’s E3 solution, Bienvenido V Tantoco III, executive vice-president & general manager, Rustan Supercenters, Inc, says: “To achieve our corporate growth strategy, it is essential for Shopwise to provide the highest level of customer service while reducing costs through a more efficient and effective supply chain.
“We reviewed the JDA Advanced Store and Warehouse Replenishment and Forecast solutions, and identified the extensive functionality built into the solutions, would enable our merchandisers to optimise order management, increase service levels, and maximise our inventory return on investment to support our growth strategy.
“In addition, we have gained a significant benefit which enables us to share information, resulting in mutual benefits for Shopwise and our trading partners.”
“Meanwhile, the global industry leaders are using JDA’s advanced tools to release huge sums of cash for investment in growth, and refining their operations to a point where assortments, store operations, demand chain and marketing/promotions are seamlessly integrated and managed down to a local market level.
“All of this would not be possible without technology to take care of the heavy lifting by performing huge complex analyses of the EPOS data and recommending detailed operational decisions that will optimise profitability throughout the demand chain. This kind of technology allows merchants to focus on the art of retail while the systems take care of the science.”
JDA solutions at a glance
The JDA solution suite is called Portfolio and it encompasses a unique breadth of integrated products which can be deployed one at a time, allowing timely projects that deliver a fast return on investment.
The products offered in JDA Portfolio can be classified into three categories:
- Integrated inventory management systems and store systems that capture and execute every transaction in a business in an integrated framework. These systems position retailers to move to the next category.
Business Intelligence Solutions
- Advanced analytical solutions allow retailers and their suppliers to run their business through powerful exception-based analytical tools that are tightly integrated with the core infrastructure systems described above.
- Planning solutions that allow a retailer to start with a business plan and turn that into a detailed merchandise procurement plan and a detailed store sales plan at the press of a button.
- Space Planning solutions that help a retailer plans floor space and then, where appropriate, plans the placement of assortments on the shelves, all within a highly intuitive graphical environment.
- Forecasting and Replenishment systems that allow a retailer to integrate is buying decisions at warehouse and store levels into an automatically optimised process that maximises profitability.
- A complete Category Management solution that automates a retailer’s assortment management processes and maximises profitability.
- Advanced revenue management solutions that help a retailer maximise margin on every piece of business it transacts.
- Sophisticated customer relationship management systems that help a retailer understand what its customers want and make it easy to target them to satisfy their needs more easily.
JDA — an agent for change:
This kind of transformations to advanced best practice is not easy to implement. Even if a retailer licenses the JDA products, that is just the start of the process. Getting to the peak of performance requires careful and skilled change management, training and support. JDA has recognised this requirement and responded by building a global team of experts that help ensure success.
JDA’s business model has always been to hire and train regional specialists and, today, JDA employs a team of 85 consultants across the Asia-Pacific who are part of a global practice of over 400 retail and demand-chain experts. No other solution provider can bring such a sizeable and experienced resource pool to bear for their customers.
“We recognised many years ago that our role is far more than just a provider of software. We are an agent for change and we combine our software with education and experienced consultants who can help everyone of our customers plan and execute their evolution safely,” observes Chee.
“We have now established a position as trusted advisor to our customers, helping them to help themselves to greater efficiencies and greater profitability. It’s a win-win relationship built on trust and experience!
“Many companies in Asia have historically looked upon technology as a necessary evil; a cost to the business that was always kept to the minimum. Today, based on the experience of the world’s leading companies, more and more retailers are starting to see technology as a strategic asset whose importance equals any other part of the business. CIO’s report directly to the CEO as business leaders, as opposed to the old model where IT came under finance as a cost centre.”
However, while this is becoming the norm in the US and Europe, most businesses in Asia have not yet adapted to this way of thinking and by failing to change, they risk being outpaced in the increasingly competitive world in which we live
Retail in Asia is different:
Early on, JDA realised that retailing in Asia is not the same as in the US or Western Europe. “When it comes to providing solutions for our customers in Asia, one size does not fit all,” comments Chee.
“We understand that the adoption rate for new technology is different for different retailers and so, depending on where they are in their use of technology, we tailor our approach to suit each retailer. We often employ a ‘crawl, walk, run’ philosophy, allowing our customers to progress at a rapid but safe pace. Too many technology vendors promise overnight change and then deliver overnight catastrophe,” warns Chee.
JDA’s customers have achieved their successes through a unique approach to implementing technology. JDA’s Portfolio solution suite allows a retailer to adopt solutions one at a time in order to keep the degree of change in the business to a manageable level. However, JDA also provides and guarantees the integration between its products. This means that as the customer adds more JDA solutions to its business, the systems work together to provide powerful synergies across the various departments that typically rarely even talk to one another.
JDA offers the full range of solutions, from basic infrastructure systems, needed by every retailer to the most advanced data mining and clustering algorithms, that could put several percentage points on the retailer’s bottom line. JDA offers this impressive breadth of solutions in an easy-to-consume step-by-step approach.
“Some of our competitors,” observes Chee, “try to persuade retailers to replace all their systems with huge unwieldy monolithic systems that change every aspect of the business at one time. In fact, history has clearly shown that this approach is fundamentally flawed and can inflict severe damage on the retailer’s business!”
Summarising the local dimension, Chee recommends Asian retailers to make the most of their home-based advantage. “They know the region intimately and they are very good at sourcing, producing and selling products locally. If they combine their local knowledge with world-class technology, they will be able to hold their own.”
Finally, retailers in Asia are very often involved in a myriad of different businesses, from construction to transportation. This often results in businesses that are highly vertically integrated and require solutions that can operate in this demanding business model.
JDA has developed its systems to not only manage this environment, but also optimise it and ensure that decisions taken throughout the demand chain are synchronised and optimised for profitability. This part of JDA’s offering is the most recent addition to its arsenal of power tools for retail and promises in many ways to bring the most impressive results.
In 2001, JDA realised that it could not simply continue to focus on systems that helped retailers in isolation of the broader environment of the supply chain. In a crucial moment in the development of the company, JDA decided to start up a new operating division called Collaborative Solutions.
This business unit within JDA is focused on providing solutions that optimise decisions throughout the supply chain, but always with the focus on the end-consumer, thus the special title of ‘demand chain’ applied to this progressive discipline.
Since that decision, JDA’s Collaborative Solutions business has developed into a US$50-million business, providing the most advanced solutions that help retailers and their suppliers work better together for mutual benefit.
JDA solutions allow manufacturers to gain insights into the activities on the shelf inside the retailer, so that they can tailor their assortments, production plans and logistics in order to maximise availability on the shelf in real time with the minimum of safety stock.
The result is that the customer will be more satisfied through elevated service levels. This in turn results in increasing sales, and margins will improve through reduced handling of merchandise and reduced markdowns.
In addition, promotions will be executed in an integrated manner between the supplier and the retailer, thus increasing customer satisfaction, and, finally, overall inventory levels throughout the demand chain will typically be substantially reduced.
JDA is leading the market in this new arena with faster and broader adoption of its solutions than any of the much publicised public trading exchanges.
Is its offering competitive with these industry initiatives? “No, we are not in competition with public exchanges or indeed the standards bodies such as UCC,” responds Schmidt.
“JDA’s solutions are architected to support open standards and we believe that the public exchanges and data pools will continue to represent an important channel for collaboration. However, we do not believe that they will be the only channel.
“JDA also supports direct peer-to-peer collaboration, allowing retailers to privately negotiate terms with their suppliers for mutual benefit. In Asia, in particular, I think this style of collaboration is likely to meet with much greater adoption over time because it supports the long-standing relationships that retailers and their suppliers have fostered for many years. It also allows vertically-integrated retailers to truly act as one synchronised demand chain for the benefit of their customers.”