Madhav Durbha, Group Vice President of Industry Strategy at LLamasoft, speaks with us about what sets the organisation apart.
Could you tell me a little bit about your company and your role at the company?
LLamasoft delivers the science behind supply chain’s biggest decisions. Over 750 of the world’s most innovative companies across industries rely on our algorithmic intelligence to answer complex supply chain questions. We offer productised applications and innovative solutions to accelerate adoption of AI with deep expertise in machine learning, optimisation, simulation and advanced analytics capabilities to improve decision making. Our technology helps business leaders design operational strategies to achieve profitability and growth goals. The company creates a true end-to-end view of global supply chains to enable decisions along strategic, tactical and operational time horizons.
What are the current trends within your industry?
Supply chains across the board are undergoing a massive shift. Rising customer expectations, increased nationalistic agendas resulting in uncertainty in tariffs, connected consumers empowered by information, increasing focus on sustainability and the explosion of data are just a few factors that make operating supply chains increasingly complex.
Retailers are increasingly focused on last mile delivery. B2B manufacturers are embedding smart technology into their products to monitor the usage of the product and run remote diagnostics to deploy proactive maintenance. Such connected products are also giving rise to subscription models in the B2B space. CPG companies are also looking for direct to consumer connections through increased use of subscription models.
From a technology perspective, we are seeing high levels of interest in understanding the use of AI in supply chain. Beyond AI, given the advances in cloud computing, building end-to-end digital models of the supply chains is now a reality. Such ‘digital twins’ are enabling organisations to perform complex what-if analyses and assess the best outcomes. As an example, in light of the recent trade wars, we have customers who are using their supply chain digital twins to make complex trade-offs between taxes and tariffs, shipping costs, inventory carrying costs, customer service levels and so on to make decisions around sourcing changes.
What makes your company competitive?
Our biggest differentiation is the ability to solve the most difficult supply chain problems and enable highly interconnected decisions. While traditional supply chain decisioning systems have functionally optimised the ‘source-make-deliver’ links, they have not done enough to drive decisions connecting these links. LLamasoft enables decisions cutting across functions such as optimising supply chain networks, flow path optimisation or cost-to-serve based optimisation.
Very fast time-to-value is another critical differentiator. Our customers can uncover opportunities worth millions of dollars with implementation timelines as short as six to eight weeks.
At the core of our offering is a very comprehensive data model that spans across a variety of functions from sourcing to manufacturing to distribution to points of consumption. Populating this data model enables a supply chain digital twin.
Layering on top of the digital twin is a rich library of algorithms spanning optimisation, heuristics, AI/ML and simulation. These algorithms are the ‘brains’ behind the decisions enabled by our platform.
We also provide a visually intuitive environment where users can build supply chain models. Thanks to our cloud-enabled decisioning platform, we can now deploy these models through apps developed on our platform at enterprise scale without having to write code.
What innovations has your company been developing during 2019?
We invest 25% of our revenues into R&D. We employ over 200 data science/machine learning experts -many of them with Masters and PhDs from reputed universities. Here are some examples of our continued innovation:
Increasing the speed at which supply chain questions of varying degrees of complexity can be answered. This is through continued investment and collaboration with some of our largest customers to drive the development of our digital decisioning platform.
Expanding the use cases feasible through our technology. This year we went through a concerted effort of expanding the use cases our customers take advantage of and now enable over 25 use cases that span across strategic to tactical and operational decisions.
We made major functional enhancements to our core algorithmic engines. One example of that is the recent capability we launched around taxes and duties analytics. This helps organisations to fully evaluate new sourcing, procurement and distribution strategies to minimise the impact of taxes and duties on their total cost to serve customers around the world. Companies such as Shell, with highly global supply chains, are taking advantage of such capabilities to model sourcing scenarios in light of changes to trade agreements.
Powerful visualisations built to allow users to surface the challenges and opportunities hidden in their supply chains through descriptive, diagnostic, predictive and prescriptive analytics.
What are your predictions for the industry in 2020?
Here are some predictions for 2020 for the supply chain industry.
Regionalisation of supply chains will continue to accelerate due to ongoing trade wars, Brexit and so on. However, smarter companies are looking at this as an opportunity. As supply chains shorten, responsiveness and agility will improve. We will see increased shift in sourcing strategies with this regionalisation.
The race with speed of delivery will continue with increased B2C shipments increasingly tilting towards next-day and same day delivery. This will pressure retailers and logistics providers to look for efficiencies in supply chains.
Rise of digital nationalism and Splinternet of Things: With the race towards 5G dominance and increased concerns around governments’ desire to protect their citizens’ data, the internet will also start getting increasingly fragmented and partitioned due to increased government oversight. Regulation such as GDPR and newer laws being adopted by India to protect the data of its citizens will have massive implications for companies with global aspirations and accordingly their supply chains.
We will see increased operationalisation of Machine Learning applications: Application of AI/ML will progress beyond science experiment and start getting deployed across larger user bases as part of their daily decision making.
Staffing for appropriate skills will be a challenge for organisations. There will be increased need for skills required at two ends of the jobs spectrum. At one end will be jobs that require extreme physical dexterity such as in warehouses and last mile delivery. At the other end will be those requiring high mental dexterity such as those with skills in areas such as AI/ML etc.
Is there any exciting news you’d like to share with our readers at Supply Chain Digital?
In fact, 2019 was such an exciting year for us that there are multiple items I’d like to share.
We opened our new, state of the art EMEA headquarters, significantly expanding our investments in the region.
We acquired Opex Analytics, a leading AI firm turning us into an AI powerhouse. This also significantly expanded our global footprint giving us access to the talent base in India given Opex’s presence there.
We announced our partnership with JD Logistics, a huge strategic win for us that significantly increases our penetration into the massive China market.
We won the prestigious General Motors’ Supplier of the year award for the second year in a row.
We continue to accelerate our growth. In the first half of this year alone, our software subscription revenues grew by over 30% year-over-year and we added 33 new customers.
We continue to expand our partner ecosystem and several of our partners now have the competencies to build and deliver apps.
For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.