As the supply chain gets stretched, DFW tech companies are stepping up — and seeing demand – Dallas Business Journal – Philadelphia Business Journal






The supply chain is under unexpected pressure. Some North Texas companies in technology are assisting in the challenge.
Several Dallas-area companies are offering digital tools around planning, managing or just better thriving in the very physical world of getting items from one place to another.
The region, bolstered by long ties to the overall logistics industry, has seen supply chain-related technology businesses ramp sales, bolster hiring or attract funding. More recently, some have loaded up moving trucks and shifted their headquarters to the local area. The companies range in size and specific target markets as their products cover software, analytics, artificial intelligence and more.
Amid their efforts, they’re addressing the strained and challenged supply chain that’s causing disruptions and extended delivery times. Ships are stalled off the coast of California, workers can be hard to find and delays can multiply — all after the pandemic that began last year and shook the industry.
“Since COVID began — what we had is a huge disruption where the demand shut off for three months; and then it just kind of came back with a vengeance,” Brian Nemeth, a consultant with AlixPartners. “This finely tuned machine was thrown off balance. There’s a big element of time to get things back to where they were.”
During the third quarter, the average global shipment took 12 more days than it did in the same period last year, according to Austin’s E2open (NYSE: ETWO), which provides supply chain management tech. That’s also more than 20% longer than the previous quarter.
The effects can be seen around the economy. Dallas’ consumer-products giant Kimberly-Clark shifted expectations for its annual organic sales to the low end of an earlier range to reflect the resurgence of COVID-19 and the “volume impact of supply chain disruptions,” according to CEO Mike Hsu in prepared remarks for the quarterly call.
North Texas technology companies – some in the start-up stage and some more mature – are getting more interest from folks in the industry that needs to find ways to speed up the process.
“I would say it continues to grow,” said Bart De Muynck, an analyst at Gartner, noting an improvement in the situation isn’t expected until at least 2023. “Companies are going to continue to invest in technology to help drive their businesses — but also to help get better insights, which helps them run their business and secondly, to become a lot more efficient.”
Dallas-based One Network Enterprise, which assists with logistics, has seen its numbers improve. Sales have grown more than 50% in 2021. The company totals more than 500 employees after hiring roughly 190 folks globally this year – and with openings for 90 more.
One Network is enabling supply chain planning and execution as it lets all relevant parties work together on the network to forecast and optimize around consumer demand by way of AI and prescriptive analytics tools. It can show material shortages “well in advance, providing the trading partners the time needed to plan,” Greg Brady, chairman, said in an email.
“We are experiencing a perfect storm in terms of market need, our solution capabilities, and our technology platform,” Brady said. “Bookings driving growth has never been higher, and the pipeline continues to accelerate.”
It provides help in industries such as health care and industrial and has roots that stretch back roughly 20 years.
“To scale a robust AI solution that uses data from the consumer to the suppliers and all logistics partners in between, (it) requires constant optimizing of all parties’ processes toward the highest possible service levels at the lowest possible costs,” Brady said.
While One Network is hardly new to the area, at least three companies in the field have relocated their headquarters to the region in the past three years., which assists with ocean-freight booking processes, shifted to North Texas from San Francisco, and earlier this year announced it raised about $60 million in a B round.
Another company, Trax, shifted its hub from Austin to Irving earlier this year, citing the expense of the tech-centric city in Central Texas. The global challenges are providing opportunities for the company as it provides software and services that help companies manage and optimize logistics and transportation costs.
“Our demand has never been greater,” Josh Bouk, chief revenue officer, said in an email. “As the supply chain continues to struggle with logistics capacity and service reliability, we expect to continue to grow at over 20% a year for at least the next (three to four) years.”
Optym, which is in Cypress Waters, moved from Florida less than a year ago. It’s helped with key issues for larger enterprises over its history – and has rolled out options to target players that aren’t as big. 
The company has more than 200 employees globally, including about 45 in the U.S., CEO Ravi Ahuja said in an emailed response to questions. And it’s slated to reach around 250 by the end of next year. Revenue in 2021 is expected to be about $15 million.
 “We all know that logistics is a big part of total cost that is incurred these days,” Ahuja said, noting e-commerce has been a big driver in the industry longer-term.
North Texas already is a hub for traditional logistics, and tech companies spring up around that to help assist, Ahuja said.
Brady called it a central hub for domestic and global logistics, and that includes transportation, warehousing and inventory management, Brady said.
Both Dallas and Fort Worth grew up as key railroad lines crisscrossed the areas dating back to the 1870s. They helped the overall area extend its reach as “the key to economic expansion had always been better transportation in and out of the region,” according to the Texas State Historical Association’s Handbook of Texas and its look at Dallas.
And the region continues to attract attention from those pushing transportation forward. Uber Technologies’ freight unit said this month it bought Frisco’s Transplace for about $2.25 billion. The company’s lineup includes a transportation management system, a key software offering that’s also provided by players such as Oracle, SAP and E2open, according to Gartner.
The deal combines Uber Freight’s network of digitally enabled carriers with Transplace’s shipper technology and operational solutions, it said. It “will enable us to immediately unlock new opportunities and efficiencies,” Lior Ron, head of Uber Freight, said in the statement.
A North Texas unicorn – a company with at least a $1 billion in valuation – is playing in the logistics industry.
“O9 is helping manufacturers and retailers — and sometimes also logistics service providers — in becoming more resilient in the face of increasing supply chain disruptions,” CEO Chakri Gottemukkala of the company said in an emailed response. “The key capability that o9 is providing is the ability to proactively sense supply chain risks and opportunities and enabling companies to make intelligent decisions faster.”
O9 Solutions nearly doubled bookings in the third quarter as the company is helping handle vast amounts of data as it employs tools around artificial intelligence.
“To a certain extent, the current environment is driving more demand for solutions like o9’s as they help companies better understand how changes on the demand side … or on the supply side … will impact them and how to best anticipate or course correct,” he said. “Companies that have outdated supply chain planning capabilities are at a significant disadvantage.”
There is growth from those outside the local area. Austin’s E2open has more than 50 employees assigned to a North Texas office, according to Pawan Joshi, senior vice president, products and strategy, in an emailed statement. The site is primarily focused on products, but also is a base for other departments like sales and services.
The site, a key location for more than 15 years, offers access to supply chain talent, a well-connected airport, and proximity to the company’s headquarters.
Polte is providing cloud location over cellular technology, offering an alternative to GPS that’s meant to provide lower-cost tracking for assets. The offering is giving help to the supply chain, logistics, manufacturing, and a wide range of other sectors.
CEO ED Chao sees Dallas excelling in the tech industry for logistics with its central location in the U.S. and its traditional focus on business-to-business transactions. The city’s prowess with certain types of tech also gives it an advantage.
“You have the talent here locally to be able to put these very complex systems together,” he said.
De Muynck sees potential for the tech industry in the Dallas area, helped by factors such as the education system and lower taxes
“Logistics is one of those perfect areas that Dallas is perfectly positioned for,” he said.
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