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Companies tasked with managing supply chains are facing increasing challenges as the pandemic weighs on their operations. Since modern supply chains involve many steps, including assembling parts into finished products and shipping products to customers, there is a greater chance of problems. According to the Institute for Supply Management, 42% of supply management organizations say the rising cost of supply management was a top concern in 2021, with 43% citing limited raw material availability or supply as equally worrying.
Obstacles, old and new, are prompting companies to invest in technologies that promise to automate and streamline supply chain management processes. In a 2021 Statista survey, among supply chain management industry players, 45.1% said they invest in software – and automation was a key feature. One vendor benefiting from this boom is 7bridges, which aims to help retail, pharma, manufacturing and distribution brands use AI to run workloads in their supply chains. 7bridges announced today that it has raised $17 million in a Series A round led by Eight Roads with participation from Maersk Growth.
Supply Chain Automation
The woes of the pandemic have shone a spotlight on the global supply chain. But while health crises have revealed its weaknesses, companies have been struggling for years to revitalize their supplier and distribution networks. A recent McKinsey study found that 85% of executives struggle with technology inefficiencies in their supply chains, ranging from disconnected and siled data to time-consuming manual, spreadsheet-based tracking.
7bridges, which was founded by Philip Ashton and Matei Beremski in 2016, aims to apply AI to inform customer decisions around inbound and outbound logistics, inventory optimization and other components of sprawling supply chains. . Ashton was previously head of business intelligence at World Courier, a biopharmaceutical courier services company, while Beremski was a quantitative analyst at BNP Paribas before joining IBM as a senior analytics consultant.
“Companies are grappling with complex supply chains more than ever,” Ashton told VentureBeat via email. “This complexity stems from the explosion of new strategies and methods of execution, new carriers – for example digital freight forwarders and same-day shippers – and more and more storage locations moving closer to customers.”
7bridges brings together data and logistics processes and makes them accessible via a modular dashboard. AI technology adapts to changing conditions, balancing real-time variables including business constraints, operational capacity, available inventory per location, and operator pricing and performance. When a warehouse receives an order, the AI can choose the best shipping site, route and carrier for shipping, recommend the optimal packaging materials and configurations, and create labeling and documentation necessary for the order, explains Ashton.
“7bridges can create a digital twin of a customer’s logistics network: our AI uses this to simulate the outcomes of many ‘what if’ scenarios. It’s a way to test operations and show how costs could be impacted and performance could be affected in all sorts of scenarios that threaten their supply chain,” Ashton explained. “[Meanwhile,] 7bridges’ AI-powered carrier selection combines real-time data with existing knowledge of best routes and alternative routes to decide the optimal route and carrier providers for orders. [And] AI-powered inventory optimization ensures organizations have the right inventory and packaging in the right volume in the right place so they can fulfill every order on time, in full.
7bridges also connects to a network of logistics service providers, allowing customers to access their services, including same-day and sustainable packaging, storage and shipping. According to Ashton, it takes most customers two weeks to integrate the platform into their existing systems.
A recent study by cloud-based supply chain management firm E2open suggests that the use of AI and real-time data during the pandemic has reduced supply chain forecast error by 32%. Of course, E2open has a horse in the race, and opposing research from Vanson Bourne shows that a lack of internal knowledge and lingering fears about risk and control threaten to impede the adoption of AI for apps. of the supply chain. But while there’s hesitation around AI — and justified skepticism about its potential — the number of startups offering AI-infused supply chain services continues to grow.
For example, Tealbook uses AI to update and maintain a database of supply chain data. Atlana creates a platform to unify global supply chain data. There’s also Optimal Dynamics, a New York-based startup that applies AI to shipping logistics.
As Tokenist’s Tim Fries writes, venture capitalists are expanding their portfolios and now investing heavily in industrial tech startups trying to solve supply chain problems. “According to a report by PitchBook, venture capitalists have invested a record $45.1 billion in industrial startups so far this year,” he noted in an article last October. “By comparison, these companies raised a total of $34 billion for all of 2020.”
“Our key decision makers tend to be on the business side of the business, for whom 7bridges offers a quick change in transforming their supply chain and a quick way to improve profit margins and logistics performance,” added Ashton. “For a CTO, 7bridges represents the last logistics integration their company needs to future-proof their systems and therefore saves their technical teams time and money… It’s a huge task for people from manually compiling, normalizing and analyzing large sets of data from numerous suppliers, logistics providers and internal systems. 7bridges AI does it for them; automatically normalizing and analyzing data at a rate that is simply impossible to achieve for a human.”
Ashton says the additional investment from Maersk and Eight Roads will go into expanding the workforce and R&D of 7bridges, which has 45 employees in London, UK. It brings 7bridges total capital raised to over $20 million.
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