Smart sourcing during and after crises
In times of crises, such as the current Corona pandemic, sourcing poses major challenges for companies. ETH start-up Archlet offers a cloud-based optimisation tool. Companies can use it free of charge to adjust their sourcing strategy during and after crises.
Company founder Lukas Wawrla and board member Karin Hagen-Gierer outline the concept in the interview.
What type of companies benefit from your sourcing tool?
The tool is suitable for all companies with globally organised supply chains that purchase from several suppliers. These could be manufacturing companies from the food industry, the chemical industry, mechanical engineering or transportation. Regardless of the type and size of industry, our tool can help with strategic supplier selection as well as the preparation of supplier negotiations. Both, corporate clients and SMEs are among our customers.
Which types of goods can the tool be used for?
It can be used for all products and services involving several suppliers. The first use cases where we increased financial savings and boosted process efficiency include sourcing projects for raw materials, packaging, building services and clearing snow.
What are the biggest challenges with regard to sourcing?
Tenders with several suppliers and a large number of parts quickly become complex. Data analysis in huge Excel files is time consuming, prone to errors, and, depending on its complexity, requires considerable IT skills. This often leads to companies failing to make financial savings and they miss out on the optimal sourcing strategy.
To what extent has the situation become more difficult in times of Corona?
The pandemic brings new constraints to the supply chain. For example, businesses may want to avoid certain countries and regions or exclude companies that do not accept liability. In addition, the lack of raw materials leads to capacity constraints. There is a great demand for some goods and the market is limited. Promptness is required to respond to acute issues. But modelling such alternative supply chain scenarios is complex.
How can your sourcing tool help?
Our tool allows you to model the tenders as well as all current restrictions with just a few clicks. The analysis of the offers after an e-sourcing event is fast, automated. At the same time, our software is smart, i.e. it learns from previous decisions and actively guides the buyer to the best possible purchasing scenario. Thanks to the learning system, the best possible sourcing strategy can be determined virtually without IT knowledge. The customers who have carried out initial pilot projects with us report financial savings of 3 - 15% and a considerably more efficient decision-making phase.
What other advantages does your system offer in times of Corona?
Our tool can help to minimise risk in supply chains by incorporating risk values from external providers (e.g. Resilience 360 or Riskmethods) into the analysis. Even if the goal is to move away from single-source supply or to expand your existing supplier portfolio, the system will show you the optimal strategy for allocating your orders with minimal risk and cost. Furthermore, the software supports companies in shifting sourcing to local suppliers in the long term. Cost factors such as customs duties, VAT or changing transportation costs can be analysed within just a few clicks and considered in the decision-making process.
How can you access the tool?
Customers get a login to our cloud service and can start immediately. We currently offer a free test access to help companies restructure their supply chains. In addition, we have published a white paper that shows ways of how companies can use mathematical optimisation to adjust their sourcing strategy during and after the crisis. In the next months we will be holding a series of webinars to which all interested companies and procurement professionals are welcome to attend. On May 14th for example, we will discuss together with Prof. Dr. Stephan Wagner, Chair of Logistics Management at ETH Zurich, how companies can thrive in the “New Normal” while rethinking their sourcing strategies. Also, we will be demonstrating the Archlet App.
How did your start-up and the name Archlet come about?
We got to know each other at ETH Juniors. This is a student association at ETH Zurich that offers project-based management consulting for companies. They also support start-up activities. We had the chance to learn about all aspects of entrepreneurship and to build a network. Several of our current investors are also former members of ETH Juniors.
The name Archlet derives from Arch and is intended to symbolise that we want to build a bridge between the companies and their suppliers. It is our vision to allow purchasers to concentrate on their strategic tasks rather than having to bother with crunching data.
“As former head of procurement at Sanofi and Unilever, I am impressed by the added value that Archlet provides. Using advanced data analysis and AI, complex procurement data can be combined with internal and external data sources and corresponding supplier scenarios can be modelled easily and quickly. This makes purchasing teams far more efficient and effective in supplier selection and negotiation.”
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