#Software

Supply Chain Management

The Supply Chain Management (SCM) industry is transforming pen-and-paper processes into software-supported workstreams to help planners, fleet managers, freight forwarders and other stakeholders address today’s supply chain complexities head on.

Here’s our take on what’s happening in the space and why we believe sectors like inventory management technology will be critical to the manufacturers, retailers and distributors facing this new paradigm. CEOs and intermediaries working with companies in this sector should reach out to Zack Hubbard to discuss relevant investment opportunities.

In this new era characterized by more frequent and severe disruptions, heightened costs and escalating consumer expectations, we believe the improvement of inventory management will be central to the resilience of future supply chains and logistics service providers. We are excited to leverage our long-term experience as supply chain investors to support and partner with the next wave of technology innovators in this space.

Zack Hubbard, Software Investment Team at LLR Partners

What's Driving Growth and LLR's Focus on Supply Chain Management

Prioritization of planning solutions

Buying decisions for supply chain planning solutions have accelerated and are a top c-suite priority. Currently, 90% of executives plan to implement a new supply chain planning solution in the next five years.4

An emerging, supplemental market

There is an emerging market for solutions that supplement existing, legacy systems by quickly and accurately surfacing actionable insights on inventory replenishment, overstock and stock out potential, supplier risks, fulfillment delays and more.

Heightened supply chain complexity

Enterprise supply chains have become increasingly complex due to increased offshoring labor and storage shortages, tightened inventory lead times and growth in eCommerce.

Elevated consumer expectations

Dubbed the “Amazon Effect,” increased consumer expectations for inventory availability and fulfillment speed have strained merchants. 62% of consumers expect free delivery in 3 days or less, 10% say next day availability is the most important buying factor and 56% of all abandoned carts are shipping related1.

Surging cost of capacity

Warehouse vacancy rates are near historical lows5. Warehouse development lead times and piling inventory have driven up inventory holding costs small and medium enterprises are acutely vulnerable to these constraints.

ROI of optimization

Inventory optimization solutions have demonstrated a 33%+ reduction in finished goods inventory,6 40%+ improvement in on time delivery2 and 20%+ reduction in product lead times8. It is estimated that supply-chain optimization at scale can reduce overall supply chain costs by up to 25 percent9.

Where inventory complexity clashes with consumer expectations

62%
1
of consumers expect free delivery in 3 days or less
40%
2
improvement in on-time delivery with optimization technology
25%
3
reduction in supply chain costs with optimization technology

Get to Know LLR Partners

25 Years of Investing in Technology

  • Founded in 1999, LLR is a growth oriented private equity firm investing in high growth, disruptive technology companies.
  • Raised over $7.0 billion of capital across seven funds.
  • We are focused on organic, topline growth initiatives and complementary acquisitions to create value for all stakeholders.
  • Thesis-driven investment teams look to build fit-for-purpose strategies along side management teams.

Operational Support

  • Leverage best practices developed through codifying successful strategies across our 130+ investments since inception.
  • Access LLR’s Value Creation Team (strategy, talent, S&M, Product, finance, M&A) to help accelerate growth.

Focus on Partnership

  • Flexible capital provider (majority or minority ownership).
  • Reward and motivate key players with equity.

Inventory Management Areas of Interest

  • Focused on three key areas early in the supply chain lifecycle – Planning, Execution and Optimization – that we believe can help mitigate the inventory and fulfillment issues in the modern supply chain.

Investment Criteria

  • Flexible investment criteria.
  • Ability to invest $40-$150M of equity.
Select Investment Experience

LLR invests in the sectors where our investment experience indicates there are attractive business models and market trends supporting strong growth potential. Here’s some of our related investments.

Latest GrowthBits

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Michael Pantilione / Partner

Meet the LLR Team

Michael Pantilione

Michael Pantilione
Zack Hubbard

Zack Hubbard
Rachel Wolfson

Rachel Wolfson
Jack Warren

Jack Warren
Catherine Fitzpatrick

Catherine Fitzpatrick

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References

  1. “The State of Shipping Report 2022: Why Faster Shipping Matters.” Supply Chain Quarterly, 2022, https://www.supplychainquarterly.com/articles/6913-the-state-of-shipping-report-2022-why-faster-shipping-matters
  2. John Sicard, et.al., “Thinking differently about supply chain planning: the case for currency.” Kinaxis Inc, 2019; page 9, https://www.kinaxis.com/sites/default/files/resources/supply-chain-planning-kinaxis.pdf
  3. Michael Lierow, Kevin Hauser, Cornelius Herzog, Tim O’Hara, “Supply-Chain Optimization: Levers For Rapid EBITDA.” Oliver Wyman, 2018, https://www.oliverwyman.com/our-expertise/insights/2018/may/supply-chain-optimization–levers-for-rapid-ebitda.html
  4. Marilu Destino, et.al., “To improve your supply chain, modernize your supply-chain IT.” McKinsey & Company, 2022, https://www.mckinsey.com/capabilities/operations/our-insights/to-improve-your-supply-chain-modernize-your-supply-chain-it
  5. Liz Young, “Why Warehouse Rents Keep Going Up While Demand is Dropping,” The Wall Street Journal, 2023, “https://www.wsj.com/articles/why-warehouse-rents-keep-going-up-while-demand-is-dropping-4dc9a120
  6. “Tuffy halves its inventory value with Netstock.” Netstock, 2023, https://7375691.fs1.hubspotusercontent-na1.net/hubfs/7375691/New%20Case%20Studies%20-%20dot%20com/Tuffy%20Netstock%20Case%20Study.pdf
  7. John Sicard, et.al., “Thinking differently about supply chain planning: the case for currency.” Kinaxis Inc, 2019; page 9, https://www.kinaxis.com/sites/default/files/resources/supply-chain-planning-kinaxis.pdf
  8. “Reducing response times to customer demand.” Kinaxis Inc., 2018, https://www.kinaxis.com/en/resources/content/hightech/ems-provider-reducin
  9. Michael Lierow, Kevin Hauser, Cornelius Herzog, Tim O’Hara, “Supply-Chain Optimization: Levers For Rapid EBITDA.” Oliver Wyman, 2018, https://www.oliverwyman.com/our-expertise/insights/2018/may/supply-chain-optimization–levers-for-rapid-ebitda.html
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.