A few weeks ago (October 19), a couple analysts (Andrew and Matthew) on the team at Ardent Partners attended riskmethods’ user conference at its headquarters in Boston’s Financial District. As its name indicates, riskmethods services the supply risk market with a cloud-based supply chain risk management solution. In the founder’s words, riskmethods’ mission is “To empower companies of any size to master supply risk and create reliable supply networks.” The company is headquartered in Germany but is making strong inroads in North America.
With a conference theme of “Using Risk to Your Advantage,” the company’s executive team of Heiko Schwarz, Co-Founder and Managing Director; Rolf Zimmer, Co-Founder and Managing Director; Bill DeMartino, General Manager of North America; and Alaina Koerber, Director of Product Management, led the day-long event that included (1) a 12-month summary of the company’s operations and performance (2) customer testimonials and (3) an interactive case study of how riskmethods sees the future of supply risk management. [Note: The company also shared an update on product features and a mid-range roadmap as well as the company’s strategic plan moving forward but asked that we not share that information publicly.]
A Year of Fast Growth
When taken by the numbers, riskmethods has had a very successful year and Co-Founder and Managing Director, Rolf Zimmer, was more than happy to share the details. Zimmer told the audience that the company now employs more than 100 “riskbusters” on a staff that is spread across three locations. Customer growth for the company was 80% and the customer count now totals more than 100, representing 16 industries and 11 countries. Its cloud-based system has more than 6,000 users across four continents and monitors 145,000 suppliers and 7,330 locations. The system also generates an average of roughly 1,500 alerts for its customers each month. One of the most promising aspects of riskmethods’ recent growth is what Rolf referred to as an “overlap” of 17% of its supply base across all customers; he believes this is an early indicator that a “network effect” will emerge to the benefit of its customers and their suppliers.
Rolf noted that earlier this year, the company raised a Series B round of funding and has invested the new money on “customer success, product development, increasing risk intelligence, and geographic expansion.” North America, in particular, is a big area of investment and the company expects to experience exponential growth in this region, over the next few years.
Rolf believes that “digitizing supply chain risk management changes the competitive position of companies.” Digitization, he continued, is the foundation needed to drive the key elements of a successful supply risk management program: visibility, velocity, agility, and supply network resilience.
Customer Case Studies
The day continued with a series of customer case studies focused on the use of riskmethods’ solutions to manage supply chain risk. The first presenter was a supply risk manager from a Midwestern automotive manufacturing company whose team instituted new supply risk management processes and technologies within the past three years. riskmethods’ solution provides this team with risk notifications, primarily via email alerts that are sent to their corporate crisis management team, corporate risk managers, global supplier directors and managers, and divisional managers. And, with the addition of riskmethods’ mobile application, users can receive alerts and notifications faster during non-working hours, allowing them to stay apprised of the latest events and follow up in a more timely manner on any new or emerging developments and/or issues.
This risk manager also discussed riskmethods’ Risk Radar Service, which he said provides his team with a series of benefits, including:
- faster identification of suppliers potentially impacted location specific events (like weather)
- faster information gathering and response to customer inquiries
- simultaneous email notifications that can create faster and more collaborative responses
- and earlier knowledge of M&A activities and compliance issues, that allow his team to assess potential impacts to suppliers and the overall business
This first presenter believes that these features are helpful to his company, particularly to non-risk oriented users, because “Not everyone views the world through a risk lens; people are still focused on savings, quality, and delivery.” riskmethods’ applications allow users to quickly access risk information, digest its meaning, and respond accordingly.
The second case study was delivered by a risk manager from Fortune Brands’ Global Plumbing Group. She described how she and her team use the alerting features to “R.E.V.E.A.L.,” or Review, Engage, Verify, Escalate, Aggregate, and Learn about supply risks. She described an alerting and communications flow that starts with an alert to a “risk object owner,” that advances to the risk management team, and, if the risk and concerns have not been managed or mitigated at the operational level, ultimately escalates to the risk advisory board.
It has taken her team two years to standardize and automate their alerting and analytic process. Initially, she would forward alerts to her team and prompt them to ask a series of questions to determine whether there was an impact vis-a-vis the alert. Today, her staff understands the process, knows the questions to ask, and proactively asks them in order to prepare and, where possible, stay ahead.
This risk manager preaches adaptability, sustainability, and resiliency in her supply chain risk management program. When she came on-board, her staff and colleagues would say, “We’ve mitigated that risk.” But she would ask, “Okay, but what else? What kind of risk have you mitigated, and how?” To that end, she has written a framework for risk analysis, reporting, and management, including when to act and not to act. “You don’t always have to mitigate risk,” she said. Sometimes, “leadership may choose to accept it.” She also stresses working with their supplier base and asking them, “what do you see that we don’t?”, which is a strategy that Ardent Partners consistently recommends for managing supply risk and improving supply market knowledge.
The Future of Supply Risk Management: A “RISKY” Endeavor
Following customer testimonials, riskmethods’ Rolf Zimmer, with support from Bill DeMartino, performed a “live” mock demonstration of their view of the future of supply risk management (an agile risk management organization that uses new solutions to capture, leverage, and respond adeptly to real-time supply risk information). The future, they said, is “RISKY,” the name of rishmethods’ digital assistant. RISKY is a combination of several, different innovative technologies and enablers – from machine learning algorithms that process enormous amounts of data, to natural language processing that powers its voice recognition. Combined, these enablers give RISKY an intelligent capability, able to analyze and learn from huge amounts of Big Data collected by connected devices and remote sensors across the supply chain and globe, the so-called “Internet of Things,” to allow users to vocally interface with RISKY and drive supply chain risk management through a touchless, conversational human-to-machine-to human process.
To demonstrate RISKY’s capabilities, Rolf commanded RISKY to launch after he had been alerted to a fictional shipping container in Europe that had exceeded a temperature threshold. [In an alternative scenario, Rolf would have received an alert when sensors placed within cargo signaled sudden, violent movements]. In this demonstration, RISKY, using remote sensors, was able to track and trace the shipping container down to the supplier, commodity, line, and exact location. Rolf was then able to book a nearby commercial drone, steer it over the shipping container, and engage a camera to see that it was on fire and that the local fire department was already responding. From there, Rolf was able to instruct RISKY to provide contingency plans; which included: 1) checking on-hand inventory of the commodity that was on fire, and 2) checking to find alternative suppliers that could fulfill this sudden business need. Using RISKY, Rolf decided to place an order with the alternative supplier and avoided the immediate enterprise risk caused by the fire.
While Rolf conceded that booking commercial drones to immediately have “eyes and ears” in the skies over an event like this is not yet a reality, that day is coming. In the meantime, users are able to leverage commercial satellites that fly over predetermined coordinates and record digital photographs.
There are many forces causing supply risk management (“SRM”) to become more important to the average enterprise; yet today, Ardent Partners research shows that relatively few enterprises have standardized their SRM processes, including digitized and automated solutions. riskmethods is helping to bring cloud-based, user-friendly SRM tools to enterprises of all sizes, allowing them to tap into the flow of Big Data pouring in and out of the enterprise. With that data and a wave of technological innovation, like machine learning, NLP, and the IoT, riskmethods is starting to fuse these enablers together as it works to complete its vision of the future of supply risk management.