Report: Panasonic Pursuing Blue Yonder Amid Growing Clout Of Supply Chain Management

Japanese electronics giant Panasonic is reportedly pursuing an increased stake in Arizona-based supply chain management firm Blue Yonder, at a time when surging eCommerce has heightened demand for technology that can smooth the process of moving goods from suppliers to retailers to customers.

According to a Nikkei report, Panasonic is finalizing a $6.5 billion investment — its largest in a decade — in the privately-held firm, whose investors include Blackstone Group and whose 3,000 customers include Starbucks, L.L. Bean and Walgreens.

For its part, Panasonic wants to expand its stable of hardware products that combine software, sensors, artificial intelligence (AI) and other devices that help companies improve operational efficiencies, according to the report, which cited multiple unnamed sources familiar with the deal.

If true, the purchase would also mark the latest move in Panasonic’s transformation from a consumer products manufacturer, while underscoring the increased importance of supply chain management in day-to-day digital retailing and operations.

It would also follow the 20-percent stake it took last May in the fast-growing Blue Yonder, which now has 5,000 employees in 40 countries and serves 73 of the 100 largest retailers.

Supply Chain ‘Rock Stars’

In its most recent blog post last week, Blue Yonder listed five current, post-pandemic trends that are driving the uptake and importance of supply change management, including the increased use of machine learning and automation, faster integration and greater usage of cloud-based services and the emergence of “rock star” data scientists who can sew it all together.

“More automation requires better data quality,” the company’s post said, noting the preponderance of data that exists within companies but is siloed in different departments and lacks harmonization.

“Breaking down these silos is becoming increasingly important in order to make supply chains more efficient and more resistant to disruptions. The data scientists who help implement such projects become the heroes of the supply chain.”

Blue Yonder did not respond to a request for comment.

Attacking Inefficiencies

From Amazon to Walmart and from groceries to vaccines, the past year has literally been a case study in managing surging demand and the need to make on-the-fly decisions to streamline sales, manufacturing and distribution challenges that are often happening in different continents.

While some digital-first retailers flourished during the pandemic and others struggled to meet demand, the interest and investment into supply chain-related technology is clearly on the rise this year.

Last week, Costco CFO Richard Galanti referenced supply chain challenges in the company’s earnings call, particularly as it pertains to container shortages and port delays.

“This has caused timing delays on certain categories including furniture, sporting goods, lawn and garden and even some food and sundries items like seafood, imported cheese and oils,” Galanti said.

At the same time, retail giant Walmart has announced “aggressive acceleration” of its omnichannel retailing efforts backed by a huge increase in its capital expenditure and IT budget this year, to increase automation and reduce inefficiencies.

“We are on a multi-year journey of modernizing our tech stack and capabilities,” Walmart CFO Brett Biggs told investors on the company’s conference call, while outlining plans to accelerate the long-term strategy of transforming Walmart into a dynamic omnichannel business. “We are confident in our strategy. Now is the time for us to be aggressive. Speed matters. We’re going to keep the customer in the center and design for them,” Biggs concluded.