With a tech engine built on data analytics and AI, Michigan-based LLamasoft simplifies supply chain management for enterprises

Donald Hicks and Toby Brzoznowski, the co-founders of LLamasoft, were working at a simulation software company before starting their venture. Donald received multiple requests from companies who wanted to simulate their supply-chain operations, to better predict the impact of strategic changes to policies or market conditions.

After multiple failed attempts with traditional simulation technologies, Donald came up with a new approach that focussed specifically on the supply-chain domain. The value proposition was simple – if companies can test new 'what if' scenarios in a digital world, they could significantly mitigate risk and drastically reduce the cost associated with bad business decisions.

Once the prototype was in place, he partnered with Toby, who had experience in enterprise software sales and marketing, to find early adopters that could help fund the technology development and enable company growth.

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After the pair met while working at another software company, they decided to start a new venture that combined Don’s experience in simulation and industrial operations engineering with Toby’s experience in enterprise software sales and marketing.

LLamasoft was thus born in 2003 in Ann Arbor, Michigan, United States. At present, the startup has 750 employees across the globe.

At undisclosed amounts, the startup raised its Series A funding from Augment Ventures and MK Capital in 2012, Series B from Goldman Sachs in 2015, and Series C from the TPG Group in 2017.

The model

The software startup charges an annual subscription fee to its customers to use the application, for which the pricing used is case-dependent. It provides support services to enable customer success including initial implementation, user training, system support, and software maintenance.

Speaking of what sets LLamasoft apart, Toby tells YourStory,

"It is our approach to supply-chain planning as a whole, and the technology that we use to support it. Where most technology providers focus on helping companies run their supply-chain, LLamasoft focusses on helping companies adopt and evolve their supply-chain based on changing market conditions or industry trends."

While traditional supply-chain decisioning systems have functionally optimised the source-make-deliver links, not enough has been done to drive decisions connecting these links. Toby says the company enables decisions, cutting across functions such as optimising supply-chain networks, flow path optimisation, or cost-to-serve based optimisation.

The customer experience, as Toby says, has a very fast time-to-value. LLamasoft's enterprise customers can reportedly uncover opportunities worth millions of dollars with implementation timelines, as short as six to eight weeks.

Technology

The technology at LLamasoft has three layers to it –

1. The Digital twin integrates data from all key supply-chain and enterprise planning systems to create a virtual model of the entire end-to-end business.

2. The AI and analytics library is a source of sophisticated, predictive, and prescriptive algorithms to help analyse the mass of data and optimise supply-chain operations.

3. The app studio is a no-code UI design layer that sits on top of the data and analytics, to enable rapid design and deployment of easy to use apps for business users.

Using these three technology components, LLamasoft provides pre-packaged applications like supply-chain guru and demand guru, which are built for specific business use-cases and personas. The components also complement with build-to-order or build-your-own apps, which are configured to meet the customers' business requirements.

User acquisition and the road ahead

The biggest challenge while acquiring users was that the team was selling to multi-billion-dollar and multinational enterprises. In most cases, risk tolerance is low, and the competitors are established companies. Toby says, the startup had to have a clear differentiator, which is a unique combination of simulation and optimisation technology.

"We could articulate the value for the customers, and we had to find companies that were willing to be early adopters. We had to remove the barriers that a procurement organisation would put up, and that's why, we created these more risk-averse contracts — milestone-driven, deliverable-driven contracts. So, they didn't pay until they achieved the value they were looking for. That allowed us to sell to a company that typically wouldn't buy from someone our size."

The partners includes the likes of Accenture, IBM, Bain and Company, Capgemini, ATKearny, Tata Consultancy Services, among many others. The clientele is spread across North America, China, Japan, Latin America, Europe, the Middle East, and Africa.

"As we expand the roll-out of our digital decisioning platform LLama.ai, we expect to see increased operationalisation and deployment of practical use-cases for AI and ML-based solutions throughout the supply chain," said the Co-founder.

(Edited by Suman Singh)

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