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Fresh air in an old industry: How these entrepreneurs are using AI to transform logistics

Posted:
7 September, 2021

The consumer landscape in logistics and supply chain is changing.

Companies are under pressure to meet the ever increasing demand for fast, transparent and clean delivery. A growing trend of ultra-fast grocery delivery startups, including Gorilla, Dija, Weezt and getir, has begun. Next or same day delivery for electronics and fashion is becoming the norm. The pandemic has accelerated the need for goods and services to come to the consumer rather than the other way around. 

To compete, big players must now align with these new delivery models. French retailer powerhouse Carrefour, for instance, recently announced it was in advanced negotiations with Cajoo – a startup that provides under 15 minutes grocery delivery services.

While we’ve seen the entrance of new technologies in the logistics and supply chain industry that have helped grow efficiency and profitability over the last decade, this is insufficient for the world we live in today. Throw in COVID-19 related restrictions, and many companies end up struggling with either shortages or overstocks.

These pains, and the industry’s reliance on archaic systems like spreadsheets, feel paradoxical in a world where groceries can arrive in 15 minutes, and a new laptop can be bought and returned within 24 hours, all without leaving your house.

Jean-Baptiste Clouard and Mehdi Adjaoue are two startup founders helping logistics companies  leverage technological breakthroughs to transform their supply chain and workflows to meet growing consumer demand.

Their businesses – Flowlity and Eyepick – are part of a new generation of startups bringing AI to this ‘old school’ industry.

They joined us at a recent event at Station F, the home of Entrepreneur First Paris, to explore why logistics and supply chain are still functioning like old industries – despite the flood of innovations – and how AI can play a role in transforming it, alongside deep tech and early stage startup investor Sofia Dahoune.

Here, we share their stories; how their startups are challenging the status quo in logistics; and where the opportunities are for other aspiring entrepreneurs seeking to bring new technology to this industry.

Mehdi Adjaoue - Automating what couldn’t be automated

After graduating from Les Mines Nancy with a degree in computer science and robotics, Mehdi Adjaoue began his career automating ‘pick & place’ operations in a leading logistics company. However, he observed a gap between a growing demand for labour-intensive, repetitive tasks within manufacturing and logistics companies, and the labour available to complete them. In 2019, Mehdi claims, 200,000 such roles were left unfilled in France alone. One of his early customers even had a 70% staff turnover in a single warehouse. 

However, automating these tasks with robotics was not yet possible.

“While currently robots are excellent at repetitive, manual tasks, they are blind,” Mehdi explains. “Therefore, they are obsolete for tasks requiring vision, dexterity and adaptability.”

Drawing on his in-depth knowledge in machine learning and robotics, Mehdi saw a clear opportunity to apply his technical expertise, and build a company that could directly address this problem. Therefore, he came to Entrepreneur First to found his company, EyePick.

“EF gave me access to dozens of brilliant peers who were equally motivated by an entrepreneurial adventure”, reflects Mehdi. “I am very happy with my choice, because I was able to benefit from support particularly suited to deeptech companies, and from the learnings acquired by EF through the hundreds of successful startups it has launched.”

EyePick provides smart robots and integrated solutions as a service to democratise the automation of manual tasks. These AI-powered robots can see and understand their environment, and autonomously perform these tasks as well as any trained human. 

The primary benefit of adopting this technology, Mehdi argues, is that machine learning gives logisticians adaptability where mechanisation cannot. 

“If you are a soda producer, mechanizing your process will be a no-brainer for you, because the properties of your liquid are stable and your bottles are the same,” he notes.

“However, if you are a logistician, you can receive hundreds of new products to store and service each day. Every reference has a non repeatable shape and needs to be served with different frequencies per day. So because the volumes are inconsistent, and the geometric forms are variable, there is no one size fits them all automation”. 

AI enables Eyepick’s robots to do these tasks that require cognitive abilities, as they can adapt to forms and make the throughput predictable. Companies are then able to leverage their logistics by scaling their operations and better managing costs.

Mehdi observes that one of the core issues in persuading logistics companies to adopt new technologies is integration. However, Eyepick has deliberately created robots that can be integrated as easily as possible into existing or new workflows – putting them in the same spot as the operator.

All the robots need to do this is a 10-second video of the process.

“It’s exciting because it brings tangible and necessary value to our societies.”

Founded in 2019, the company has already deployed its first robots in production. “We’ve proven our ability to successfully automate an entire production line”, says Mehdi. 

“With EyePick’s robots, the packaging costs has been decreased by 35%, and the customer now has a flat production capacity. They can now confidently honour new contracts and focus on business, instead of recruitment and training. We’re transforming the entire packaging center for our first customer.”

“AI in the physical world is difficult. But a world where laborious and repetitive tasks are performed by autonomous robots is fascinating”, he reflects.

“It’s exciting because it solves a timeless problem; because it is a technology that has never really existed before; but above all, because it brings tangible and necessary value to our societies.

In a Europe that is asking more questions about its food and industrial sovereignty, with an unsustainable and declining workforce, it is essential to find new economic and sustainable ways of producing the goods and services that make up our economy.

The mission of EyePick is to help companies in their transition to new production tools, and I’m glad to participate in this change.

Jean-Baptiste Clouard and his co-founder Karim Benchaaboun
Jean-Baptiste Clouard and his co-founder Karim Benchaaboun

Jean-Baptiste Clouard - Using AI to relink the supply chain

Jean-Baptiste Clouard is a specialist in supply chain planning – the process of optimising inventory and planning resupplies based on forecasted sales and consumptions. After graduating with degrees in Engineering from Les Mines de Nancy, and Operations Research from Georgia Institute of Technology, he began as a Supply Chain planning consultant and ended up leading one of the Supply Chain planning solutions for Dassault Systemes and Anaplan.

There, he experienced first-hand the issues at the heart of his industry. 

“Inefficiencies in supply chain management cost the world up to $2T every year,” Jean Baptiste notes. 

“The problem is that supply chains are still highly manual. Manufacturers use whiteboards, papers and excel files to do their planning. That data is also still held in silos. Finally, the nature of this being a ‘chain’ of suppliers means that when one has a problem, it affects others down the line.”

The main reason for this? Even if logistics seems “old school”, for most companies having a supply chain department is something new. The first of these appeared in the 80s within FMCG companies like Coca-Cola or Unilever. And even if new tools appeared on the market, companies took time to adopt them because of the complexity of the task.

“AI is more data efficient than human beings and dramatically reduces inertia to switching solutions.”

Armed with this knowledge, Jean-Baptiste made the decision to leave his role, and join Entrepreneur First Paris to build a company directly addressing these challenges. Here, he was introduced to his co-founder Karim Benchaaboun, a machine learning engineer with experience as a data scientist at Criteo and AXA.

Combining Jean-Baptiste’s industry knowledge, and Karim’s technical expertise, they built Flowlity – a SaaS solution providing the world’s first cognitive supply chain network. 

Through their AI, Flowlity provides end-to-end inventory optimisation. They automate supply chain planning, give dynamic recommendations and warn companies when issues are going to arise. As a result, companies avoid lost sales, overstocks, shortages, and therefore financial losses and material wastes.

Flowlity was conceived and built as a network, so that the startup can act as a trusted third party between different stakeholders in the chain.

The company has already been able to make a substantial impact for their customers. For example, by applying a combination of AI algorithms, the company was able to support one manufacturer of parts for the medical industry to decrease inventory by over 45%, and stock-outs by over 60% – a significant step in optimizing their supply. 

Jean-Baptiste does not underestimate the power that AI can have not just in optimising supply chains, but also reducing the challenges the industry faces in being slow to adapt. 

“AI is more data efficient than human beings and dramatically reduces inertia to switching solutions”, says Jean-Baptiste. “Therefore, it drives performance and simplifies inherent complexities in global supply chains.”

For him, the largest challenge to a global logistics revolution lies in the pooling and sharing of data from every company and their sub-entities within the global network. An efficient collaboration will enable AI to fully leverage the power of data to accelerate the industry transformation. 

Jean-Baptiste pitches at Demo Day
Jean-Baptiste pitches at Demo Day

Opportunities for the next generation of founders - a VC’s take

Solutions like EyePick and Flowlity that deploy new technology to empower old-school logistics teams are going to become crucial if these companies want to compete. And VCs are noticing.

As Investment Director at Elaia, Sofia Dahoune has participated in investments in the logistics industry, investing in Eyepick and Kheops.io with Elaia.  Like Mehdi and Jean-Baptiste, she recognised the urgency for companies to rise to the massive digital transformation in an increasingly globalised world. 

“What is interesting for us as VCs in the logistics industry, is that in addition to being a huge market, we are witnessing a strong momentum. The need for better performing supply chains, coupled with the democratization of AI and IoT, made the last decade the right moment for VCs to invest in logistics,” Sofia reflects.

According to Sofia, AI will keep driving investments in logistics and supply chains in the coming years.

She identified three major trends in the space:

  1. AI-enabled solutions, from better decision making to other forms of application that require AI to work efficiently, including warehouse automation, storage optimization or last-mile delivery. 
  2. Real-time visibility, which has become a major subject following the massive adoption of IoT.
  3. Digital Twins who enable companies to digitalise factories and processes through virtual models.

The accelerated transformation of the industry has only opened up more opportunities for startups to take up this technology, and fill in these gaps.

“The COVID crisis has made this need all the more relevant,” says Sofia. “It’s been a massive real life crash test for the industry, as it forced the economy and people’s lives to a halt.”

“While this has had a negative impact, it has also brought to light the vulnerabilities of today’s supply chains – thus prioritizing these transformation topics, and giving startups a space to innovate and optimise.”

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