Although it might seem as if reinventing the supply chain life cycle is just in response to recent events, the industry has actually been undergoing widespread change for years now. Players in this massively complex system — a system that encompasses international trade, multiple modes of transportation, and trillions of dollars in goods — have been in the midst of supply chain transformation to improve lead times, increase visibility, and ultimately, exact greater control. As we speak, data intelligence systems are crunching constant inputs from connected sensors, geolocations, and tech platforms to track & deliver a single part.

Consider an item such as a hot tub. One tub contains a total of 1,850 parts, and those parts will travel a cumulative of 887,776 miles from seven different countries and 14 different states. One of those states will be Texas, so it doesn’t take much to surmise what happened when Winter Storm Uri hit in February 2021. It knocked out one of the suppliers, forcing the manufacturer to cut production by 75% in March. Although that supplier was eventually able to right its ship, port slowdowns in China added further delays. Later, backlogs of shipping containers in key U.S. ports — coupled with cross-country driver shortages — created additional disruptions.

In other words, recent events have spurred vendors, warehouses, and transportation companies (among many other parties) to kick supply chain transformation into high gear. It’s also why the industry is seeing a rise in supply chain technology startups looking to solve issues inherent in transporting goods. And like any other business sector, times of rapid transition cause investors to steer into the space.

Investing in Supply Chain Disruption

Supply chain technology startups that make and move the world are enjoying their time in the sun. It’s contributing to the surge in popularity of investment themes involving transportation, logistics, commerce infrastructure, and manufacturing. This massive boom in the supply chain economy wouldn’t have existed without the COVID-19 pandemic.

The question that remains is this: Where should one direct their attention?

It’s a bustling space, to say the least, and there’s no shortage of supply chain tech startups attempting to solve the same sets of problems. Many of them have already secured both corporate and venture capital investment. But that alone shouldn’t inform your investment strategies. Predicting which small subset of companies will emerge the victor in such highly contested arenas can be challenging.

That said, there are essential supply chain tech capabilities with the potential of optimizing (if not reinventing) the space. The few that often top the list include on-demand sourcing, right-sized production, smart manufacturing, and real-time pricing.

Take REFASHIOND OS as an example. The company is working toward “refashioning” the entire fashion supply chain by supporting on-demand fashion production at scale. Sojourn, another one of Ascend’s portfolio companies, is attempting to bridge the last autonomous delivery gap. We’re also working with Producers Trust, a marketplace for the global food system that brings together producers and buyers to facilitate transactions. FreightWaves, long an Ascend flagship investment, is leading the freight industry into the data age by providing the information necessary to benchmark, monitor, and forecast everything from pricing to risk.

Here at Ascend Venture Capital, we focus on the singular player positioning as the data hub of the subsector or industry. First movers can gather and parse metrics from across the value chain to provide mission-critical solutions to customers. In the rapidly evolving supply chain world, that’s the type of lucidity everyone needs.

Image by Jezael Melgoza