New LLamasoft CEO Plans to Exploit Retail, Transportation Disruptions

Even though it’s been around for two decades, Ann Arbor, MI-based LLamasoft is one of the state’s biggest tech startup success stories.

Llamasoft says its software optimizes the design of supply chains, enabling large, complex businesses to find ways to improve operations, lower risk, save money, and make faster decisions.The company has 400 employees in 14 countries; its software has been used by 23 of Gartner’s top 25 supply chain companies; and it has been named the fastest-growing North American supply-chain software company three years in a row by Deloitte’s Fast 500.

Given Llamasoft’s growth, the company says the time was right for co-founder and former CEO Don Hicks to step down as it prepares to scale even further. Describing it as a “planned succession,” LLamasoft recently chose Razat Gaurav to lead the company, and he comes on board with 20 years of experience in the supply chain industry. His past gigs include leadership positions at JDA Software, i2 Technologies (which was acquired by JDA in 2010), and Ernst & Young (EY). LLamasoft’s new CEO has mostly lived in Chicago throughout his career and considers himself a Midwesterner, making the relocation to Ann Arbor an easy transition.

Hicks will stay on as the chair of LLamasoft’s board, and co-founder Toby Brzoznowski will take on the role of chief strategy officer as part of the personnel changes.

“LLamasoft has grown very rapidly,” Gaurav says of the company, which was founded in 1998. “At this stage, there are 660 customers in 60 countries—customers like Cardinal Health, Ford, Unilever, GM, Ikea, and other Fortune 1000 companies.”

When you own a startup, he explains, you incubate an idea and, if successful, experience a growth spurt. “We’ve gone through that, and now we’re [ready] to scale to three times the size we are now,” he says. “It was time to bring in operating experience and create bandwidth for strategic thinking of how and where to grow. It’s the normal course of events.”

As with everything else connected to the transportation industry, supply chains and logistics operations are expected to be upended by the advent of autonomous vehicles and other mobility technologies. In mobility, Gaurav sees a key opportunity.

“When you think about autonomous vehicles, 3D printing, robotics, artificial intelligence—all of those things have varying degrees of impact on supply chain management,” he says. “Autonomous vehicles will impact our OEM [original equipment manufacturers] customers—they’ll have to rethink manufacturing, distribution, and service, and it may result in new business models. It creates an opportunity for us because we can bring in modeling and design tools to rethink supply chain networks, routing, and location decisions.”

No matter how driverless these future cars become, there will still be human decision-making involved, he says, such as “what can be manufactured where, where are the parts being sourced, and what are the outbound logistics? With so much disruption, there will be a need for tools like ours. It’s a good time for us.”

Gaurav says LLamasoft has crunched the numbers and believes there are potentially 5,000 companies in North America and Europe alone that could benefit from the company’s software, but it has only signed on 660 of them so far. A greater focus on expanding the company’s go-to-market strategy and producing a “highly differentiated product” is planned for the next 12 to 18 months, he says.

“We’re going to make huge investments in sales and marketing to capitalize on the opportunity,” he adds. “In parallel, we’ll invest roughly 25 percent of our revenue on research and development. We’re creating exciting, game-changing stuff and building out our next evolution.”

Some of Llamasoft’s tools include the ability to build a “digital twin” of a company’s supply chain to find efficiencies and model various scenarios. The challenge is not so much how LLamasoft can capitalize on swiftly moving new developments in retail and manufacturing technologies, Gaurav notes, but whether it can do so fast enough.

“For us, all of these technology and business model disruptions are an opportunity to help customers with a more flexible, agile, and digital supply chain,” he says. “You’ll see us be a lot more visible in the market. We’d like to triple the number of customers we have in the next five years.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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