The Russian invasion of Ukraine has compounded supply chain troubles in critical sectors, including agriculture, automotive, energy, food and semiconductors. Companies are not only facing congested ports but product-line closures, transport delays, and spiraling costs. It is little wonder then that building supply chain resiliency against a wide range of disruptions was a hot topic at the World Economic Forum’s annual meeting in Davos May 22-26. Resilinc, a 2022 World Economic Forum Technology Pioneer, says it can help. Its AI-powered technology aims to predict delivery delays, price movements, and supply constraints for raw materials and commodities before they happen and suggest options. Customers include A&T, Moderna, GM, Flextronics, and Collins Aerospace.
The rapid decay of a decades-old model of supply chain reliability and efficiency is a key feature of CEO agendas worldwide, according to a May 23 post by McKinsey. The semiconductor sector’s supply chain woes are a case in point. Chip manufacturing relies on perfluoroalkyl and polyfluoroalkyl substances (PFAs) as coolants in the etching process, a crucial step in chip production. 3M accounts for 90% of the global supply of coolant for the chip industry, with 80% of that coming from a single plant in Belgium, In March 3M’s Belgium plant had to stop PFAS production to implement environmental clean-up action demanded by the Belgian government at a cost of €150 million to the company, causing ripple effects along the supply chain.
The 3M case is an example of how a local regulator can come in and shut down factories for violating the environment, embarrassing the brand but also impacting the entire supply chain,” says Resilinc CEO Bindiya Vakil. “Suddenly an ingredient, which represents $200,000 in spend can have a $1 billion impact” if it impedes the manufacturing of a company’s end-product,” she says.
Disruptions to the 3M facility added another layer of supply chain troubles for the semiconductor industry, which is already struggling to meet demand. Halted production at five steel plants in Ukraine that produced a neon extract threaten another part of the chip making process.
Over the course of a decade, companies from all sectors may face disruptions that erase half a year’s profits or more, according to McKinsey. For companies in most sectors, a single prolonged shock to production could wipe out 30% to 50% of one year’s earnings before interest, taxes, and depreciation.
“All the disruptions are causing companies to take a hard look at their supply chains,” says Vakil. “They are looking at reshoring, stocking more inventory and second sourcing but there is a challenge with these strategies: they all involve price tags that can run into the hundreds of millions of dollars. With our technology, for hundreds of thousands of dollars of investment, companies can gain resilience across a wide range of disruptions. With better visibility, mapping and monitoring, companies can not only survive but thrive.”
Resilinc,which is based in California, spent 12 years mapping out the supply chain, one supplier at a time, collecting historical information that can be helpful in identifying ESG risks and act as an early-warning system on potential shortages. It claims to have 95% of the global supply chain mapped across the industries it serves.
The procurement departments of many companies focus on the 20% of the suppliers that represent 80% of their spend. That’s a mistake because they need every part and every ingredient to make their products, says Vakil. “Our early- warning alert system monitors and predicts potential disruptions across suppliers, sites, and materials; our platform enables them to collaborate closely with their suppliers; our historical data-backed insights give them options on appropriate actions to take.”
Resilinc says it monitors millions of news and social feeds across 100+ countries and languages in order to give its customers relevant alerts. It also provides a suite of risk management tools including supplier visibility dashboards, supplier scorecards, collaboration centers, and playbooks. It says it can map a company’s entire supply chain, down to the site, product, and part level, giving companies the visibility and ability to act quickly when disruption strikes. “It might mean engaging with another factory or changing suppliers; Resilinc can help find alternative suppliers,” says Vakil.
The historical data that Resilinc has collected about suppliers helps companies know their supply chain. “It is really important to understand where your brand might have exposure,” she says. “We can tell you if your supplier is violating labor or environmental laws or using up too much of national resources.”
Resilinc is integrating its technology with software already deployed by big corporates, such as Snowflake. “Resilinc can act as a new feed, providing new insights, without the need to learn a new system,” Vakil says.
Key competitors include real time monitoring companies such as Everstream Analytics, which also tracks supply chain risk. Resilinc says it has no real competitors on the mapping side of its business.
The company has raised a total of $26 million from investors that include Salesforce Ventures and UL, the global safety certification company
Some 70% of the company’s customers are in the U.S, 20% are in Europe and 10% in Asia.
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