The 2020s: the decade the world went full remote.

Or did it…?

Apparently the supply chain industry didn’t get the memo, with its average digitisation level languishing at 43%.

When the pandemic crashed into existence, every one of us saw what happened to supply chains. The chip choke gave everyone in tech (and automotive, and gaming, and appliances, and medicine…) a new appreciation of their fragility.

Almost mid-decade, the logistics industry might just be catching up. Drones are whizzing overhead and robots are running warehouses, with the drone delivery market set to skyrocket from $1.5 billion in 2021 to $31.2 billion by 2028.

The AI logistics market is on a similar trajectory, predicted to jump from $1.7 billion to $12 billion from 2018 to 2027.

In Switchboard founder Hugh’s words:

“The vitality of supply chains is on the rise, rather than diminishing. While we’re going through an era of immense change within an industry that’s overdue for updating, the core themes that make the supply chain an engaging and dynamic industry will continue.”

The question is: how can an industry that’s not even 50% digitised integrate the hyper-modern technologies its customers are calling for?

Switchboard’s answer: by remedying data inaccuracy and disaggregation in the global physical good supply chain.

In plain English: no more scribbled sticky notes or manual emails between stockists and replenishment teams, no more uneditable .PDF order forms, and no more frantic last-minute 3PL requests.  

And in dollars and cents: as little as a 5% reduction in supply chain costs can double net profits.

Meet the founder

Founder Hugh Dixson’s direct experience is where he felt the pain.

Hugh started his career at BCG before spending 4 years working in the logistics industry at Uber, and later at Aussie road freight scaleup Ofload (which just raised another $31 million).

“After a few years in logistics I knew how painful and expensive it is to integrate the various IT systems that power supply chains. I built and ran operations at Ofload where I was directly responsible for this process, and I was shocked by how much manual processing even Ofload (a digitally sophisticated business) had to do. When I moved into M&A at Ofload, I saw the same themes across the full supply chain function.”

Through conversations with supply chain partners, Hugh started validating Switchboard before Switchboard was even a thing.

Currently, global supply chain data is stored across various systems:

• Enterprise Resource Planning (ERP) systems (eg, SAP, Oracle etc)
• Warehouse Management Systems (WMS) (eg, MYOB WMS, Cin7)
• Transportation Management Systems (TMS) (eg, CartonCloud, TransVisual etc)
• Supplier Relationship Management (SRM) systems.

Despite how advanced this sounds, a day in Hugh’s past life might’ve seen him manually downloading data from his system (.PDFs, .CSVs) and sending it by email, and the recipient customer manually uploading it on the other end.

Meet the problem

More sophisticated supply chain participants have custom integrations - expensive, time consuming, and out of the question for smaller operators.

Incumbent software (Fourkites, Project44, e2 Open) claims to give full visibility over the supply chain targets only a particular area, but actually operate just in one vertical (e.g. freight) or just at the front-end.

Each new onboarded customer either needs to integrate with whatever system its supply chain partner is using - or, more likely, use “make do” systems in the meanwhile.

“Fast-paced businesses often allow manual processes to reign supreme - taking calls and scribbling down notes, then catching up on emails and systems later. Across a team of people, these manual processes can mean that even with the best of intentions, operational efficiency is compromised and mistakes get made.”

Connor Hagan, co-founder of Skalata portco Explorate, says:

“The problem is well known and it is large and complex. Suppliers/vendors and purchasers/consignees will all have different ways of managing inventories, and getting them to use a new system for inventory/order management can be extremely bespoke and time consuming.”

Switchboard exists in the backend, taking the problem straight off the table.

Meet the product

In Hugh’s words, “digital freight forwarding turns chaos into order”.

Data is of course king, with a few weeks of Switchboard use revealing how customers can:

• Optimise for maximum FTL (full truck load)
• Reduce cost per consignment
• Access complete digital visibility of every touchpoint in the supply chain
• Schedule efficiently, forecast demand precisely, and scale theoretically “infinitely”
• Drive revenue by offering a seamless, superior experience to customers.

“The better the data from these digital processes, the more efficiently freight is allocated. This means the shippers win as the cost per consignment comes down, trucking companies get more round trips and full loads, and there is significant environmental impact from reducing near-empty trucks due to inefficient allocation.”

The elimination of errors and reduction in staff costs alone provide a significant saving. Companies that “aggressively digitise their supply chains can boost annual growth of earnings by 3.2%, and annual revenue growth by 2.3%”.

And virality comes as standard.

When a new customer is onboarded, each participant in its supply chain is onboarded as a “trading partner”, using Switchboard’s onboarding widget.

Integrations take seconds, and all products - along with their names, quantity, and price - automatically populate into the system.

The more supply chain participants Switchboard onboards as customers, the more valuable the software becomes to existing and new customers, as more trading partners are already set up on the platform ready to go.

One potential pilot partner said:

“This solution is exactly what we need… we are doing it manually and it’s an entire FTE that we just don’t need. I would rather our staff were doing more important things. It’s a blocker to our growth.”

The next link in the chain

Thanks to that sub-50% digitisation level in logistics, there is a lot of incentive for change.

40% of supply chain bosses have already integrated cloud computing, and are expecting inventory and network optimization tools to be the most adopted technologies over the next 5 years.

Switchboard’s long-term vision is to become the “system of record” for the global supply chain, using its proprietary data set to create further products (e.g. selling benchmarking data or training data for AI companies).

On his choice to work with us, Hugh says:

“Skalata and Paul Little [Skalata Chairman] have great credentials in our industry. We believe Skalata is in a great position to help us with GTM and growing our customer base with their connections and experience.”

Switchboard is already up and running with 3 pilot customers - with 30 more already in the pipeline.

The addressable market is huge, and the impact potentially vast - as Switchboard lowers the barriers for digital data flows in supply chains, coverage of high-quality data will improve across them, facilitating the growth of new technologies in the sector, like AI, superior data analytics and optimisation. Skalata Investment Director Tom Smalley says:

“Leveraging its foundation as a digital infrastructure player, Switchboard presents clear avenues into data, network, and financial ancillaries.”

We look forward to working with Hugh and Switchboard as they grow customer numbers, increase share of wallet, and expand their global-from-day-one presence.