Addressing Supply Chain Complexity with Innovation

We recently hosted a summer supply chain event for our ecosystem along with MUFG, a leader in supply chain financial services. It was a packed house with a mix of founders, investors, and other supply chain leaders.

The format of the event was an attempt at guided networking - we had about an hour of content from stellar speakers, which set up the group for deeper conversations and connections during the networking session that followed.

Some insights:

- Vlad Mashchenko and Katharine Connolly of MUFG discussed macro trends within supply chain finance. Pre-pandemic “just-in-time” frameworks have morphed to “just-in-case”, which generally have increased inventory and the financing needed for it. US businesses increased inventories following the pandemic, and now have reached a new, higher equilibrium.

New infrastructure around sustainability and reshoring are also driving supply chain financing demand.

These massive shifts combined with rising interest rates makes underwriting more complex. Financiers demand more detailed data from clients, and AI has become a critical part of the underwriting process.

- Chad Bailey discussed how supply chain startup funding has shifted. There has been a decline in last mile logistics and freight from the funding peaks in 2021 and a shift towards  to enterprise supply chains companies.

- Hannah Kain of ALOM spoke about the increasing complexity of supply chain management. Historically, pandemics were followed by war, and this latest one has unfortunately been no different. Investing in technology has been key to her company’s success in navigating the two regimes: growing through stock outs in the pandemic, and the new geopolitics where tariffs can impair inventory, create regulatory overhang and more.

Four years past the pandemic, we are operating in a completely different supply chain environment from the one we were in before the global disruptions. Enterprises now plan for "just in case" inventory, supply chain contractors deal with growing complexity, and everyone grapples with new requirements around sustainability and reshoring.

- Karen Betancourt has a long resume in supply chain. Previously she led the roll out of fulfillment centers built around Kiva robots while at Amazon, created new sortation capabilities at Walmart, and was VP of Supply Chain at Cardinal Health, where she managed a $1.3B dollar budget to deliver medical gear and kits to hospitals at the height of the pandemic. As CEO of Vanguard Medical Logistics she is focused on supply chain excellence in Central America. While she is excited about real time data offering new flexibility within supply chain operations, she cautioned that the adoption of AI may be slowed or stymied by the lack of clean data within the supply chain.

Real time data and robotics have led to productivity improvements. AI based workflows are key to managing complexity, but the data substrate for AI in supply chain is incomplete.

Most founders in the audience heard the caution but saw opportunity as well. For example, synthetic data could help address the sparse data problem within supply chains and the process driven environments within supply chains would benefit from agentic AI workflows.

- Priya Rajan moderated a panel on innovation across stages with Grace Metri of NVIDIA, Gaurav Mittal of THL Partners, Praveen Akkiraju of Insight Partners, and me (Rohini Chakravarthy).

> Grace spoke about the cutting edge capabilities on NVIDIA’s Omniverse that allows digital twins of complex systems

> Gaurav highlighted THL’s focus on scaled companies in warehouse automation and supply chain software companies like Fourkites

> Praveen invests in workflow companies and commented on the increasing capabilities that apply to industrial and supply chain operations

> At NewBuild Venture Capital, we see strong company formation as entrepreneurs apply new AI, data, cloud, and connected device capabilities to solving enterprise supply chain problems. SaaS, transactional marketplaces, and factoring are all popular business models for early stage supply chain software companies.

Thanks to Joana Tahiraj, Brian Fitzpatrick, and Priya Rajan for cohosting this event with NewBuild.