Nov 17, 2023

Arvist, a Chicago -based startup using AI to address supply chain inefficiencies, raised $1.1 million in pre-seed funding from venture capital firms including Refashiond Ventures, Geek Ventures, Lofty Ventures and more. Crunchbase data shows that one in four dollars invested in American startups this year has headed into the pockets of founders running AI-related companies . Nilay Parikh, the CEO and founder, said warehouse managers use Arvist to hunt down inefficiencies and manage safety risks. To do so, it takes video from existing security cameras and warehouse infrastructure and feeds it into its software platform for analysis powered by AI. He said it can give distributors a better understanding of delivery timing and quality, efficiency at loading docks, rate of packing deliveries during a specific shift and more. Both the data and the infrastructure belong to Arvist’s customers, per Parikh. Those working in the supply chain have a slew of concerns to worry about on a daily basis. Parikh said he knows warehouse professionals don’t sit by their computer looking at real-time updates, even though they can use Arvist’s backend to do so. Instead, he said, customers prefer sporadic reports on efficiency, which the Techstars -backed startup delivers straight to their phones and inboxes. Related Stories “People don’t really care much actually what’s happening at that particular moment; [they’re interested in] getting more intel on how [things] happened during the day or during the week,” he said. “We are trying to reach them where they are.” That means supply chain leaders can adapt their facilities accordingly. Parikh said the software delivers insights in three main areas: safety, quality and productivity. The funding will go toward adding new features to the platform—like asset tracking for misplaced goods, quality checks on outbound inventory and insights into efficient loading of trucks. The company will use the cash injection to increase headcount, he said. Parikh plans to add two to his five-person team. Those positions will be focused around quality assurance and applications engineering, he said. Though it currently operates at five sites, Parikh has a lofty goal for Arvist in the next six months: signing 25 to 30 more warehouses. Over the next 12 months, Parikh said the team will focus heavily on sales. He said the goal is to get Arvist to $1 million in annual recurring revenue. One of Arvist’s customers, an unnamed apparel distributor, uses the platform to understand throughput, productivity at different packing stations and how many packages were packed and shipped during a particular shift, Parikh said. He said the technology could help optimize supply chain operations as distributors face labor shortages and disruptions. “One of the things which is common for supply chain warehouses, specifically in the apparel warehousing industry… is labor shortage. Three out of four warehouses right now have problems finding people, and that problem is not limited just to the workers on the floor—it’s across different levels,” he said. “The demand is not going down… so our technology is not replacing any such labor, but more augmenting the workforce to continue to raise the capabilities in these distribution centers.” As concerns about workers’ rights and forced labor continue to heat up, Parikh noted that the technology isn’t meant to be used for surveillance, nor should it be used to punish shift workers for low efficiency during a certain shift. “There’s no way to capture identity… because we blurred the faces, [and] we don’t do any kind of facial recognition, either. So there is no blame game, if you will, on point persons,” he said. “It is to understand shift-level operational efficiencies and what can be improved over there.” To ensure potential customers understand that—and have quality as a primary interest in partnering with Arvist—Parikh said he discusses use cases and goals prior to working with a distributor. “We always ask the question to our potential customers of, ‘What are your incentives for your workers or for your managers?’ If the incentive is based on the number of boxes packed, then it’s not the right way to do it,” he said. “If you’re expecting good quality while [also] expecting that, ‘Hey, you did not box 30 packages this hour,’ and you’re firing [employees], there’s a misalignment [and it] becomes more of a cultural issue around how you’re incentivizing employees.” Even as Arvist continues to grow, it has issues that need to be resolved. As Parikh put it, “Software, it’s never complete. There’s always a ton of issues.” For Parikh, one obstacle to overcome revolves around the fact that not all warehouse management systems (WMS) and enterprise resource planning (ERP) softwares have uniformities. “A challenge that we have is [that] the number of WMS and ERP platforms out there is massive, but it is not like [there are] a few big ones which have a large market share. Material companies especially have a lot of different WMSes that they use,” he said. “We’re trying to make sure we have a common way of integrating, instead of making custom integrations every time we have a new customer.” Read More About