Artificial Intelligence Supply Chain Management Drives Sphera Acquisition

Supply Chain Artificial Intelligence

(Credit: Pexels)

by | Oct 4, 2022

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Supply Chain Artificial Intelligence

(Credit: Pexels)

Artificial intelligence and enhanced data use are becoming a key part of supply chain management, and Sphera is boosting its capabilities in the area by completing an acquisition of software company Riskmethods.

The deal will also help Sphera enhance its Scope 3 emissions monitoring and reporting platform, the company says. Germany-based Riskmethods specializes in supply chain risk management and increases Sphera’s overall ESG offerings.

Riskmethods’ software as a service platform uses artificial intelligence, a range of data, and machine learning to identify, analyze and mitigate all types of supply chain risk. That includes monitoring sustainability practices and ESG compliance across a company’s operations.

Sphera says that helps businesses proactively manage supply chain risks, which is increasingly important with an increase in supply chain interruptions over the past few years. Sphera will use the system to take that monitoring a step further and improve its Scope 3 tracking and monitoring system.

Earlier this year the company added a lifecycle assessment automation platform to assist businesses in tackling increasing investor and regulatory demands regarding sustainability and ESG efforts. The system gives companies insight regarding their entire supply chain operations to help them reduce emissions, including Scope 3 emissions.

Artificial intelligence in the supply chain market is expected to be valued at nearly $20.2 billion by 2028, growing at 20.5% per year, according to a report from BlueWave Consulting. Machine learning accounts for the largest share of the market, and the advantage of artificial intelligence to improve operational efficiency and take predictive supply chain measures is spurring the growth.

A study by McKinsey found that companies implementing artificial intelligence supply chain management systems have improved logistics costs by 15%, increased inventory levels by 35%, and service levels by 65%. Artificial intelligence is helping improve operations across industries, including energy, electric vehicles, buildings, and manufacturing.

Riskmethods supply chain risk management system helps more than 225 companies across the world and monitors more than 1.1 million suppliers, locations, and supply chains. The company, which was founded in 2013, has more than 40,000 users.

Riskmethods CEO Heiko Schwarz says the deal will help the platform expand with the use of Sphera’s industry and ESG data, which will improve a company’s ability to anticipate the ESG impacts of their suppliers.

As investments in supply chain technologies increase, Sphera has been active over the past year in expanding its sustainability capabilities. The company was acquired by private equity funds managed by Blackstone in 2021, which at the time valued Sphera at $1.4 billion. Sphera’s carbon accounting platform is contributing to Blackstone’s Emissions Reduction Program. Sphera also partnered with PwC to build a stronger digital ESG management system.

D+ Partners and Senovo, two of Riskmethods’ original investors, will be shareholders of Sphera. Terms of the acquisition, which was first announced in September 2022, were not disclosed.

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