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Businesses tasked with managing supply chains face increasing challenges as the pandemic takes a toll on operations. Because modern supply chains involve many steps, including assembling parts into finished products and shipping products to customers, there’s more opportunities for issues to arise. Forty-two percent of supply management organizations say that the growing cost of supply management was a major concern in 2021, according to the Institute for Supply Management, with 43% pegging limited availability of raw materials or supply as equally troubling.
The hurdles, both old and new, are spurring enterprises to invest in technologies that promise to automate and streamline supply chain management processes. In a 2021 Statista survey, of those in the supply chain management industry, 45.1% said that they were investing in software — and that automation was a key feature. One vendor benefiting from the boom is 7bridges, which aims to help retail, pharmaceutical, manufacturing and distribution brands use AI to execute workloads across their supply chains. 7bridges today announced that it raised $17 million in a series A round led by Eight Roads with participation from Maersk Growth.
Supply chain automation
Pandemic woes have placed a spotlight on the global supply chain. But while the health crises might have exposed its fragilities, businesses have struggling for years to rejigger their supplier and distribution networks. A recent study by McKinsey found that 85% of executives struggle with technology inefficiencies in their supply chains, ranging from disconnected and siloed data to time-intensive, manual spreadsheet-based tracking.
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7bridges, which was founded by Philip Ashton and Matei Beremski in 2016, aims to apply AI to inform customers’ decisions about 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.
“Enterprises struggle with complex supply chains now more than ever,” Ashton told VentureBeat via email. “This complexity arises from the explosion of new fulfillment strategies and methods, new carriers — for example digital freight forwarders and same-day shippers — and more stock storage locations moving closer to customers.”
7bridges brings together logistics data and 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 by site, and carrier prices and performance. When a warehouse receives an order, the AI can choose the best dispatch site, route, and carrier for the shipment, recommend optimal packing materials and configurations, and create the necessary labeling and paperwork for the order, Ashton says.
“7bridges can build a digital twin of a customer’s logistics network: Our AI uses this to simulate outcomes of numerous what if scenarios. This is a way of stress-testing operations, and showing how costs might be impacted and performance might 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 and alternative routes to decide on the optimal routing and transport providers for orders. [And] AI-powered inventory optimization ensures organizations have the right stock and packaging in the right volume at the right place so they can fulfill every order on time, in full.”
7bridges also connects to a network of logistics service providers, enabling customers to access their services including packing, storage, and same-day and sustainable shipping. According to Ashton, it takes most customers two weeks to integrate the platform with their existing systems.
A recent study by cloud-based supply chain management company E2open suggests that the use of AI and real-time data during the pandemic cut 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 over risk and control threaten to stymie the adoption of AI for supply chain applications. But while there’s hesitance around AI — and justifiable skepticism of 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 is creating a platform to unify global supply chain data. There’s also Optimal Dynamics, a New York-based startup applying AI to shipping logistics.
As Tokenist’s Tim Fries writes, venture capitalists are broadening their portfolios and are now significantly investing in industrial tech startups that are attempting to solve issues for supply chains. “As per a report by PitchBook, venture capitalists have invested a record $45.1 billion in industrial startups so far this year,” he noted in a piece last October. “In comparison, such firms raised a total of $34 billion for the entirety of 2020.”
“Our primary decision-makers tend to be in the commercial side of the business, for whom 7bridges offers a rapid step-change in their supply chain transformation and a rapid way to improve profit margins and logistics performance,” Ashton added. “For a CTO, 7bridges represents the last logistics integration their business needs to make in order to future-proof their systems and therefore saves their technical teams time and money … It’s a huge task for people to manually compile, normalize, and analyze vast datasets from numerous suppliers, logistics service providers, and internal systems. The 7bridges AI does it for them; normalizing and automatically analyzing data at a rate that is simply impossible for a human to achieve. ”
Ashton says that the additional investment from Maersk and Eight Roads will be put toward expanding 45-employee, London, U.K.-based 7bridges’ workforce and R&D. It brings 7bridges’ total capital raised to over $20 million.
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