Blue Yonder Enters into Binding Acquisition Agreement with One Network Enterprises: Move Creates Speculation about Company’s Long-Term Strategy

By Adhish Luitel | 2Q 2024 | IN-7321

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.

Last month, supply chain solutions provider Blue Yonder announced a binding agreement to acquire One Network Enterprises (ONE) and its Artificial Intelligence (AI)-based modules that provide end-to-end visibility. This acquisition of the cognitive supply chain control tower provider comes in at approximately US$839 million and Blue Yonder expects it to close in and consolidate the two entities by 2Q or 3Q of 2024, subject to closing conditions and regulatory approvals. With this deal, Blue Yonder has spent more than US$1 billion over the past 5 quarters, as it has focused most of its attention on the supply chain technology space. Ever since the Panasonic acquisition in 2021, Blue Yonder has been moving strategically toward positioning itself as a comprehensive one-stop solution for end customers. ABI Insight "Panasonic's Supply Chain Management Arm Goes Public" offers further details about Panasonic's initial plan to file for a supply chain arm Initial Public Offering (IPO) with Blue Yonder as its centerpiece in the summer of 2022.

Arguably the biggest value the ONE acquisition brings to Blue Yonder is its network of more than 150,000 trading partners in its ecosystem. Leveraging aspects of AI, cognitive supply chain control towers can bring a lot of benefits to supply chains for enterprises by offering more functionalities through network optimization, digital twin, and decision-making capabilities. Further benefits of cognitive supply chain control towers are explained in ABI Insight "The Rise of "Cognitive" Supply Chain Control Towers".

Post-consolidation, Blue Yonder's customers will ideally be able to share data with these partners and use them to mitigate disruptions. Overall, this acquisition has the potential to bring a lot of benefits to Blue Yonder's clientele:

• Enabling enhanced decision-making, as a result of increased visibility into procurement routes, resources, and capacity. Credit goes to the aggregation of data silos to gain a holistic view into the entire supply chain, which can optimize real-time decision-making and enable disruption mitigation.
• Real-time, multiple-entity optimization, and logistics flow orchestration both within and outside an organization to ensure apt collaboration among customers, carriers, and other stakeholders.
• Elimination of time lags that occur between planning and actual fulfillment, as customers can leverage the cognitive supply chain control tower's network across the ecosystem via tools like rule-based engines and AI.
• Offer predictive supply chain risk assessment through end-to-end AI-based supply chain analysis.

All of Blue Yonder's acquisitions over the past 5 quarters have been very strategic, clearly highlighting its ambitions to position itself as a one-stop shop that offers all supply chain digitalization capabilities to end users, rather than a point solution provider. Its other notable acquisitions have been flexis AG, a platform that offers factory planning, slotting, and sequencing capabilities, and Doddle, a returns management and reverse logistics digitalization platform. In this move to cater to the growing manufacturing intralogistics market, and to offer end-to-end supply chain capabilities, Blue Yonder needs to be mindful about how it positions itself and gauges the kind of competition it will face.

The ONE acquisition was a bit of a curious move, as Blue Yonder has its own Luminate Control Tower. This move can most likely be alluded to certain competitive advantages in innovations that ONE has over Luminate-like its continuous automated network adjustments made on top of supply chain disruptions, as detailed in ABI Research's Supply Chain Control Towers competitive assessment (CA-1442). It will be interesting to see how Blue Yonder leverages this acquisition. Is the plan to consolidate ONE with Blue Yonder's existing offerings to make its Luminate flagship offering even more robust? Or is it to grow its order book under separate entities? Given the recent acquisitions, who does Blue Yonder see as its competition? Is it fellow supply chain-focused solution providers like Manhattan Associates, or will it cross over into the manufacturing and intralogistics digitalization space and look to face companies like Siemens, IBM, and SAP? It will be interesting to see how the company and its offerings shape up in the coming months.