The pandemic got almost every company talking about resilience. Supply chain risk solutions are hot. And a company called Exiger seemingly came out of nowhere to capitalize on this.
Lately, Exiger has been in the news. In December of 2023 it was reported that $1.2 billion had been invested in Exiger by Carlyle and other venture capital firms.
Exiger’s CEO, Brandon Daniels, told me they were larger than their three largest supply chain risk competitors combined. Mr. Daniels reports they have 870 employees, so based on a market study recently completed by ARC, this claim is credible. Mr. Daniels reports they will have $150 million in revenues by the end of the year and that over the last five years they have had a compound annual growth rate of over 80 percent.
Mr. Daniels says that they were invisible to many multinationals for some time because they grew through their work with federal agencies. Initially they provided risk solutions to financial services firms. Then in 2019, the newly reorganized Defense Counterintelligence and Security Agency put special emphasis on protecting critical technology. “Then we were used by all of the agencies to help with the COVID-19 response,” Mr. Daniels explained. Federal agencies can be secretive about what technologies they are using.
By the time they started selling the solution to commercial companies, they were poised for rapid growth.
Modern supply chain risk solutions are marvelous pieces of technology. While generative AI has made artificial intelligence a hot topic, these solutions have been using different forms of AI in interesting ways for years. These solutions use natural language processing, for example, to read online publications and other data sources, make sense of what they read, contextualize the data into information, and report supply chain disruptions caused by weather, geopolitical events and other hazards in near real-time.
Exiger is tracking events occurring in 16 million supply chains that include 600 million legal entities. Additionally, they are tracking 5 billion pounds of goods back to their original source to ensure a wide variety of compliance standards are met.
Exiger pays royalties to 90,000 publications so that their AI can assess and analyze 7 billion records covering companies, markets, and other dimensions of risk. Exiger also has relationships with Google and Microsoft that allow them to read articles on the OpenWeb.
The dimensions of risk they monitor include the financial health of suppliers; reputational and criminal risk; cyber risk, and regulatory risk.
There is a typical process flow for this solution. All suppliers are rated on a 1 to 10 scale across different risk categories. The procurement department defines their appetite for risk and only suppliers that exceed a risk threshold score are displayed as companies they should do business with.
The next step the solution takes is to search the OpenWeb to help validate that the certifications and clearances a vendor are claiming are true.
Then the solution looks across a multitier supply chain for supplier concentration. This occurs when a company and their competitors are using the same one or two upstream vendors for a particular part. In these situations, a problem at a supplier’s plant is likely to have severe impacts on a company using that supplier’s raw materials and components to make their own products. If this occurs, the company would be well advised to explore supplier diversification.
When a vendor becomes an onboarded supplier, Exiger is used to monitor multitier supply risks at the bill of material level. This means that the solution understands all the different kinds of parts needed to manufacture a product. Then the solution maps any kind of event that could keep any one of those parts from arriving at a factory on time. This includes being able to peer upstream to make sure a supplier’s supplier, or suppliers even further up the supply chain, will reliably supply the parts that go into the raw materials and components that a company will ultimately buy.
This multitier mapping is done in a couple ways. First, it is done through surveys. Exiger reports that government supply chain regulations are making it increasingly possible to put language in contracts requiring vendors to reveal upstream suppliers. But no survey-based mapping is ever complete.
Manual mapping is preceded by an AI-based prediction of what a company’s multitier supply chain is likely to look like. These predictions are based on applying different forms AI to OpenWeb searches, import/export records, data from sourcing platforms like ThomasNet, federal logistics records, and other data. These predictions accelerate a company’s ability to verify how their extended supply chain is constructed.
In short, these modern risk solutions really are amazing in terms of the scale at which they operate and the risk event information they can provide.
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