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Managing supply chains was challenging before the pandemic, but the health crises headwinds ramped up the pressure. In a 2021 survey from the Institute for Supply Management, 42% of organizations said that increased cost to supply management due to the pandemic was one of their top concerns. A separate poll from BluJay found that outdated IT systems have become a growing barrier to supply chain innovation.
One of the major blockers that organizations face when it comes to the supply chain is reconciling — and analyzing — information from an array of different sources. Data including images, paperwork, recordings of customer calls, and raw sensor readings are often spread across disparate systems, apps, and services that don’t communicate with each other. As a result, enterprises encounter problems tracking key metrics and making useful predictions. Sixty-two percent of companies say that they have limited visibility of their supply chain, according to GEODIS, while 15% only have visibility on product production.
Sensing the opportunity, an expanding number of tech giants and startups offer products aimed at streamlining supply chain processes, including Microsoft, which last November launched Supply Chain Insights in Dynamics 365. Another is Verusen, whose platform employs AI to help manage supply chain risk and resiliency while improving economies of scale for customers’ operations. Verusen today announced that it raised $25 million in a series B round led by Scale Venture Partners with participation Glasswing Ventures, Flyover Capital, Zetta Venture Partners, Forte Ventures, BMW i Ventures, and Kubera VC, bringing its total capital raised to nearly $40 million.
Improving the supply chain
Verusen integrates with enterprise resource management systems and learns from experts who can fine-tune the system for automatic inventory naming, categorization, and deduplication. Verusen says its AI continues to predict and learn from real actions over time, offering suggestions to optimize inventory allocation and procurement that customers can choose to accept or decline.
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“Verusen exists to build the intelligent, connected supply chain,” CEO Paul Noble told VentureBeat via email. “Our AI platform has saved supply chain companies around the world millions in wasted working capital caused by their disparate data, processes, and systems — which has been further aggravated as a result of the pandemic. At Verusen, we are challenging leaders to think differently about the way their supply chains work, by eliminating the traditional data cleansing projects that, so many organizations, are handcuffed to today — showing them a new way of AI that learns and understands their existing data in a way that has never been done before.”
Prior to starting Verusen, Noble worked at Sherwin-Williams as a sales manager and was a founding member of LaunchHouse, a startup accelerator in Cleveland, Ohio. Verusen’s other cofounder, Spencer Applegate, previously launched startups that aggregate data for real estate professionals and help musculoskeletal patients connect with pain specialists.
“Our AI platform learns from a variety of data points, including parts purchase history, movements, and field knowledge, to identify verifiable savings across various locations for materials data. It learns the data, finds duplicates, and makes recommendations to reduce inventory rapidly. It provides a Google-like search across the different ERPs and locations to help reduce the opportunity for duplicate data creation in the future,” Noble continued. “Verusen’s platform [also] enables companies to achieve better sustainability by reducing the number of duplicate materials purchased that is most often caused by a lack of visibility to parts data.”
Verusen can monitor material levels across supply chain locations, optimizing inventory to (ideally) reduce costs and boost service. The goal is to deliver greater transparency to organizations, Noble says — enabling them to better “rationalize” their supply network purchasing power.
A healthy market
Even in the face of demand shock, labor shortages, port disruptions, and capacity constraints, not every enterprise is clamoring for tech solutions to solve their supply chain challenges. According to a report by FourKites and Reuters, more than 60% of European companies admit they’re slow to react to changing trends in logistics technologies. A survey by AIBP and Oracle found that close to half of manufacturing and supply chain professionals in Southeast Asia, meanwhile, perceive their companies to be lagging in the industry.
However, Gartner predicts that, through 2024, 50% of supply chain organizations will ultimately invest in platforms that support AI and analytics capabilities. This aligns with McKinsey, which found in a 2020 report that some 90% of executives plan to increase the amount of digital supply chain talent within their organizations through a combination of in-house reskilling and external hires.
Investments reflect the anticipated growth. Supply chain startups raised $24.3 billion in venture funding in the first three quarters of 2021, 58% more than the full-year total for 2020, according to PitchBook.
Verusen competes with Project44, a platform that gives logistics companies insights into their supply chain. Other rivals in the segment include 7bridges, SourceDay, Overhaul, and Altana AI, a startup creating a platform to unify global supply chain data.
But over-60-employee Verusen touts its customer base, which grew three times in 2021 and now includes brands like Georgia Pacific, Graphic Packaging, AB InBev, and other Fortune 500 companies in industries such as utilities, oil and gas, energy, and food and beverage. With the new capital, Atlanta, Georgia-based Verusen plans to expand its reach in the indirect maintenance, repair, and operations and direct materials markets, which Noble believes have the strongest growth potential.
“The supply chain is faced with constant disruptions for manufacturers trying to keep production lines up and running. Shortages of material inputs and maintenance supplies can interrupt even the most streamlined processes,” Noble said. “Without a way to source real-time data, supply chains lack the insight into having the right part, at the right time, in the right place to ensure they are able to increase production uptime, fulfill customer orders, and deliver on time … Verusen’s AI technology has helped the largest companies gain access to the real-time insights they need to improve speed and scale to reduce stock and inventory levels, and more importantly, reduce cash and working capital.”
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