Blume CEO Pervinder Johar explains AI in the context of supply chains

Ritu Jha–

Pervinder Johar, CEO of Blume Global, a high-tech serial entrepreneur with extensive industry knowledge and operational expertise, recently spoke about Blume Global and the role of Artificial Intelligence (AI) and other technology upgrades in the evolution of the supply chain sector. He also advised freshers on what it would take to achieve success.

“We started Blume in 2018. Early on, there was no name. My first investment request when we booked with our investor was $100 million to build a platform for the next 50 years, which is what we have done now. We sold the company to WiseTech earlier this year,” Pervinder Johar, CEO of Blume Global, said during the fire chat at the Indian Institute of Technology Bay Area Alumni (IITBAA) conference on September 16 in Santa Clara.

Pervinder Johar, CEO, Blume Global

Headquartered in the United States, Blume got acquired by WiseTech Global, developer of the leading logistics execution software CargoWise, a provider of a leading solution facilitating intermodal rail in North America, for US$414 million in February this year.

When Rohini Chakravarty, moderator for this talk asked how this tech transaction came about, Johar said, “It was a bittersweet moment to some extent. There was so much more room to grow and we were on a path to be billion dollars in revenue. I can’t say too much anymore because we’re a public company as a whole, but we were on a good path. I met the Founder and CEO of WiseTech Global, Richard White, about a year and a half back and we were just trying to do a partnership. But somehow it became that the visions were very aligned. These are complementary things. There’s a lot of data available which shows that we continue to grow well on that side.”

Johar, who is also working with a venture studio for supply chains to incubate about ten new supply chain companies over the next three years, says more details to follow soon.

“It is a studio model, not a venture model. It has already been funded well, I think we can do our first ten or so startups in the supply chain stage with more to come. But I think areas of focus will be the same – cybersecurity, planning, and all other aspects of it.”

When asked about the impact of the pandemic on the company, he said that the core concept when he set the company were three fundamental goals. One was how do you take a billion dollars of cost out from the supply chain ecosystem, by using technology and by getting more efficient.

Most people did not really talk about the supply chain before the pandemic, but logistics itself is about 12% of GDP around the world. The first goal was to take a billion dollars out. The second one was environmental impact. The third, which was the most important goal, was technology. Many people have worked on supply chains from the view of large companies. However, the supply chain runs on the back of very small businesses. We wanted to democratize technology for small companies and give them technology. Now, six years later, there are about 100,000 companies on the platform in 131 countries. 

He said that inefficiency comes when companies do not work with each other. “No matter which the company it is, we have to collaborate with many other companies to build, distribute, and sell products. For decades we had applications for companies and applications for infrastructure but now the focus has moved to platforms. The WiseTech Group is a platform now with many applications that are getting opened up. But the core of the platform has two aspects – one is the network and how many companies are participating and the second is data. There’s a lot of efficiency still possible and I think we will continue to evolve.”

What was Blume’s business model? “Blume stands for a blooming, growing organic ecosystem. Our focus was to build an ecosystem that would be a premium model. We have not monetized it yet, but we do own all the data. The days of subscription models are over. Many of the companies have funded themselves by having a subscription model. What we have done now is that there is no upfront money – zero cost to start off. At present our largest customer brings us a revenue of $10 million a year while our smallest customers do  not pay anything.”

Talking about the impact of AI on the supply chain, Johar said: “Three different types of AI technologies are involved in the supply chain. The first one is it has always been about forecasting. The second area is sequential decision-making. The third area has been more on the generative AI and large language models and languages within the supply chain. If you think of global trade, customs in every country are different and there are a lot of documents. And, language is always an issue. A lot of generative AI applications now end up on global trade. A lot of generative AI applications help in generating a plan. And I think that’s where these two things come together. Cybersecurity is another area where AI applications are used.”

The conversation then turned towards computer vision and its applications within the supply chain. “All of the robotics and autonomous warehouses, autonomous terminals, and autonomous driving are all supply chain or logistics in particular, and they all have a heavy use of computer vision. From that perspective, the Long Beach Container Terminal is heavily automated now. There are very few people operating it. Only eight people are sitting somewhere in the tower because most of the processes are automated.”

“Everything operates via computers. For instance, a container sitting on a chassis is picked up to be put on an ocean vessel and is now moved with boards with a laser to check whether the container is completely detached or not. Earlier, it used to be a person sitting there, now there are a multitude of computer applications to do the job. Even on the automation side, my view is that on warehousing it used to be something called warehouse control system, which was robotics and warehouse management systems. These two things are going to converge with the control systems where a lot of automation is becoming part of to the point that you won’t need a warehouse management system.”

Johar shared some words of wisdom for people who work in software in other areas and in supply chains. “I think it is a complex space, it’s not easy. If you want to make an impact in supply chain then you need purpose. Not just the financial purpose, the environmental purpose, the purpose of what you’re trying to go do. It is not a place to make a quick buck. It’s a place where you want to really build your career, and it takes a long time to build it. Defense relies on supply chain and it’s a broad field. But do it only if you want to build a career in this sector.”

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