“Since the COVID-19 pandemic, everyone clearly understands the added value of real-time visibility.”
Harald Nitschinger, Prewave: ‘Until recently, gaining supply chain visibility involved lots of emails and phone calls. Now, dashboards provide at-a-glance overviews.’
Heiko Schwarz, founder and Chief Rev- enue Officer (CRO) of Riskmethods, shares that view: “Businesses are real- izing that every euro they invest in risk prevention will yield four to five euros in the long run, simply because they don’t have to incur the costs of solving the problems that those risks cause. Today, our conversations are different – no longer about a two-percent cost reduc- tion, but about protecting revenue and making reliable customer promises.” And the business case is improving all the time. “As supply chains become more global and more complex, the risks are increasing. There is also rapid growth in the number of climate-related incidents, and those risks have a greater impact because of the focus on effi- ciency. Insurers are discovering that a single incident can now affect multiple supply chains and multiple customers, leading to more and higher claims,” Schwarz states.
Social media
Prewave was founded in 2017 as a spin- off from the Technical University of Vienna, where five years earlier a scien- tific study had been launched into the use of social media to predict supply chain risks. “Sensors were already availa- ble for natural disasters like earthquakes or a tornado. But how could social unrest such as strikes or demonstrations be detected? That data can be obtained from social media along with local news
Heiko Schwarz, Riskmethods: ‘Our conversations are different now – about making reliable customer promises rather than 2% cost reductions.’
Wolfgang Wörner, Sixfold: ‘By counting goods in transit as inventory, companies can reduce their safety stocks.’
media, blogs and other online sources. We analyse those sources using machine learning and produce risk alerts from them in more than a hundred different categories,” explains Nitschinger. Prewave has successfully predicted sup- plier bankruptcies two months before they occurred, including by monitoring posts about unpaid wages and employee complaints. “We monitor sources in over 50 different languages. As a result, we were able to predict a port strike in Indonesia two weeks before it happened, for example, that has still not been men- tioned in any English-language source to this day.”
Prewave also tracks virus outbreaks and it issued its first alerts about COVID-19 in early January 2020. “From then on, we adapted our models and algorithms to predict the spread of the virus and the steps that governments would take. In March, we introduced an open-access coronavirus disruption map showing 40,000 suppliers, primarily in the auto- motive and electronics sectors, supple- mented by infection rates and lockdown data. Affected suppliers are highlighted in red.”
The map helps companies to improve their communication with suppliers. When the problems are over, they can log onto the Prewave platform them- selves and change the status to ‘green’. Nitschinger: “Everyone knew that Lom- bardy was in lockdown, but no one knew which suppliers had permission to con-
tinue working. That generated lots of phone calls and emails. Even today, our map is still being used at all levels within organizations to anticipate possible sup- ply chain disruptions, especially because of the immediate feedback from suppli- ers.”
Better planning
Sixfold, like Prewave, is a start-up founded in 2017. It targets large shippers who, as in Thyssenkrupp’s case, work with hundreds of carriers. Once the car- riers are connected to Sixfold’s platform, the shippers can see any problems in the transport network at a glance. “We’ve added in artificial intelligence so we can predict when shipments will arrive and what our customers can expect over the coming hours and days. This enables them to plan better, so that the goods in the warehouse are ready at the right dock when a truck arrives. Plus, by counting the goods in transit as inventory, they can reduce their safety stocks,” Wörner says. Many other companies besides Thyssen- krupp benefited from the open-access dashboard of border delays during the COVID-19 outbreak. “We already had the technology in place to predict arrival times taking account of congestion, refuelling, driving time restrictions and mandatory rest periods. When the scale of the problem started to become clear at the beginning of March, we decided to make the border-related information
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SUPPLY CHAIN MOVEMENT, No.40, Q1 2021
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