New upstream environment, supply chain disruptions are new normal
Starting its operations in October 2020, UK-based technology firm Kavida.ai builds digital twins of enterprise supply chains and helps detect risks associated with them using artificial intelligence. Anam Rahman, CEO of Kavida.ai, throws light about the brand's journey, and how it is poised for growth in future through its partnership with Qima and new round of funding.
What was the trigger factor for starting your company amidst the pandemic? Who are the key people involved? What is/are their backgrounds like?
Covid-19 pushed 250 million people to the brink of starvation. When the first lockdowns were announced in March 2020 in the UK, it was now or never to make an impact. A few days before lockdown, I set up covid19foodsupply website and began recruiting a team of data science volunteers to build AI solutions for supply chains.
After 300 applications, 35 AI scientists and developers joined the community. That is where I met my cofounder Sumit who has studied industrial engineering at IIT Kharagpur and has a PhD in digital twins from Warwick university. Thus, our founding team of data scientists, software engineers and product designers came together. A group of complete strangers turned into a mobilised coordinated team.
After 7 months of prototyping, testing and iterating, we launched our digital twin solution and began raising our pre seed round.
How have you fared as a company since you started operations in October 2020?
The reception from the apparel sector has been overwhelming. The sector has structural vulnerabilities and procurement managers are having to deal with unprecedented levels of disruptions. With such deep challenges, myself and our head of sales have moved to Asia to help the apparel sector.
Almost every sector is experiencing upstream challenges but apparel more so due to its structural vulnerabilities.
How big is your team of data scientists and where does the company have its footprints at present?
We are a remote first organisation born out of covid constraints. We are a UK based company with our CTO and senior data scientists based out of the UK. We have 3 data scientists and 3 software engineers based out of India, 1 software engineer based out of Indonesia and 1 product designer from Hong Kong.
Myself and our head of sales are from UK but currently in Sri Lanka working with the apparel sector.
A very generic question--how are brands faring in supply chain management and whatever is the root cause for the same?
150 out of the top 500 apparel retailers are at risk of not surviving the covid crisis. The middle market is disappearing. We will be left with a polarised market consisting of luxury and low price.
Low price leaders have the biggest headaches. There is a trade-off in supply chain management between resiliency and cost efficiency. Due to their strategy, they must run cost-efficient supply chains but cost efficient supply chains are vulnerable.
In this new upstream environment where disruptions are the new normal, price leaders must find ways to ensure resiliency at a cost which does not impact their top line strategy. The complexity of this trade-off is too much for the human brain to comprehend and requires AI.
What goes into creating digital twins of enterprise supply chains? Can you describe the process in detail?
A digital twin is a vertical representation of any physical asset or process. It provides a holistic view of your operations by integrating internal operational data with external data.
In the case of supply chains, we integrate with ERP systems to utilise purchase order data. We then incorporate our external risk intelligence. Once all this data is put together, we run very smart AI and simulations to show you which suppliers will be delayed, why, by how long. We do all of this in real time!
What are some major supply chain disruptions that the textile industry is facing during the post pandemic? How can your technology help in this without compromising on competitiveness?
We are living in a completely new upstream environment where supply chain disruptions are the new normal. Whether its port delays, political tensions, covid outbreaks, transportation cost volatility or climate change - this is the new world we live in.
The external environment is changing too quickly for companies to use historical service level data as their sole supplier risk metric. They must take a holistic view of supplier risk which requires understanding risks in the external environment in real time.
Right now, managers are overwhelmed. They are spending 30 per cent of their time tracking delay risk and are still reactive and firefighting. This leads to an inability to accurately forecast supplier delays and confidently fix the production schedule.
With our digital twin, companies detect risks 30 days beforehand to allow enough time to book capacity and coordinate with brands in the event of delivery delay risks. The conversation with suppliers is moving from 'we did not see that disruption coming' to 'we have identified X risk, we have option A, B or C to mitigate'. Data and technology help companies move away from reactive to disruption to proactive identifying threats and mitigation decisions.
Which are the major companies who are your clients today? Which major countries on your radar?
We are currently deploying a pilot for PDS Multinational who are also our investor. The pilot includes a customer bankruptcy prediction tool which will allow them to make informed credit decisions. We are also working with several Sri Lankan apparel manufacturers.
We welcome conversations with large South Asian manufacturers who have challenges in their supply chain.
You recently raised £300K pre-seed capital. Please tell us how you plan to use the funds. What are your expansion plans for the next one year?
The capital is being spent on technology and product development for the apparel sector. We have hired a brilliant AI team which is developing the risk time risk detection tool. In 6 months, we will begin raising a $4 million seed round off the back of successful deployments in apparel.
Qima being a leader in providing supply chain quality and solutions, how is your partnership with Qima going to improve the fortunes of the company?
Qima is a world leader in supply chain quality risk with over 12,000 customers relying on it to ensure quality and compliance. Qima's focus on endogenous quality risk within the supply chain, and our focus on exogenous risk outside the supply chain meant this was a perfect partnership.
Both companies are driven by the same mission--use data to make supply chains more resilient. Qima has a truly rare and innovative culture, and we will be collaborating to pioneer the next era of supply chain risk management.
We are currently working to integrate our real time risk detection AI into QimaOne which is their Saas solution.
Any future improvements planned for your software based on customer feedback?
Our vision is to build a decision intelligence system which allows customers to easily implement supply chain resiliency tools. But resiliency is a journey for our clients.
Our first product assumes a fixed supply chain with limited scope for major decisions for clients. At this stage the goal is to minimise response time, forecast risks and understand their impacts.
In the medium term there are decisions which can reduce risk exposure. We are building tools such as supplier selection, warehouse location modelling, routing optimisation etc The final goal is to allow companies to completely redesign their entire supply chains for the goals which are most important to their competitive strategy. Be it, cost minimisation, sustainability, resiliency etc--companies will be able to build and test a new supply chain on a digital version first, before implementing in real time.
Published on: 20/07/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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