LONDON: Over the last two years a series of unexpected events has scrambled global supply chains. Coronavirus, war in Ukraine, Brexit and a container ship wedged in the Suez Canal have combined to delay deliveries of everything from bicycles to pet food.
In response, a growing group of startups and established logistics firms has created a multi-billion-dollar industry applying the latest technology to help businesses minimise the disruption.
Interos Inc, Fero Labs, KlearNow Corp and others are using artificial intelligence (AI) and other cutting-edge tools so manufacturers and their customers can react more swiftly to supplier snarl-ups, monitor raw material availability and get through the bureaucratic thicket of cross-border trade.
The market for new technology services focused on supply chains could be worth more than US$20bil (RM87bil) a year in the next five years, analysts told Reuters.
By 2025, more than 80% of new supply chain applications will use AI and data science in some way, according to tech research firm Gartner.
“The world’s gotten too complex to try to manage some of these things on spreadsheets,” said Dwight Klappich, a Gartner analyst.
Interos, in its latest funding round, is one of the most successful in the nascent market.
The Arlington, Virginia-based company says it has mapped out 400 million businesses globally and uses machine learning to monitor them on behalf of corporate customers, alerting them immediately when fire, flood, hacking or any other event causes a potential disruption.
Before Russian tanks rolled into Ukraine in February, the company had assessed the impact of an invasion. Interos said it identified about 500 US firms with direct supplier relations with companies in Ukraine.
Further down the chain Interos found 20,000 US firms had links to second-tier suppliers in Ukraine and 100,000 US firms had links to third-tier suppliers.
Chief executive Jennifer Bisceglie said after the war started, 700 companies approached Interos for help in assessing their exposure to suppliers in Ukraine and Russia.
She said the company was developing a new product to game out other hypothetical supply chain disruption scenarios, such as China invading Taiwan, for customers to understand their exposure to risk and where to find alternative suppliers.
Supply chain shocks are inevitable, Bisceglie told Reuters. “But I think we’re going to get better at minimising these disruptions.”
US airline Delta Air Lines Inc, which spends more than US$7bil (RM30.47bil) a year on catering, uniforms and other goods on top of its plane and fuel budget, is one company using Interos to keep track of its 600 primary suppliers and 8,000 total suppliers.
“We’re not expecting to avoid the next crisis,” said Heather Ostis, Delta’s supply chain chief.
“But we’re expecting to be a lot more efficient and effective than our competitors in how we assess risk when that happens.”
Santa Clara, California-based KlearNow sells a platform that automates cumbersome paper-dominated customs clearance processes.
That has been a lifesaver for EED Foods, based in Doncaster, England, which imports Czech and Slovak sweets and smoked meats for expat customers in Britain.
“Before Brexit we were very scared we would have to shut down,” said Elena Ostrerova, EED’s purchasing manager. “But instead we are busy as never before.”
Ostrerova said her company was still growing at an annual rate of 40% after Brexit took effect in early 2020, partly because some competitors gave up rather than tackling the onerous new paperwork for importing from the European Union. — Reuters
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