ING has launched a new independent company that aims to boost supply chain responsiveness to unexpected global events.

Stemly, an autonomous forecasting platform for supply chains, is the first spin-out from of ING’s Singapore innovation lab. The Stemly platform uses autonomous machine learning technology to enable companies to address gaps in decision-making intelligence within supply chain operations – addressing a need that has grown in recent months.

According to research carried out by advisory firm Gartner in 2019, the average forecasting error – the difference between predicted and actual sales – within global supply chains is more than 27%, and this figure is likely to have increased in the wake of the Covid-19 pandemic, which put even the most comprehensive scenario planning to the test.

In fact, when taking into account the myriad potential risks that could impact upon supply chains, from climate change and the rise of a multipolar economic system to increased mobility and digitisation, a study by consulting company McKinsey found that, in recent years, at least one company in every 20 has experienced an annual supply chain disruption costing at least US$100mn.

In a statement, Stemly points to demand planning for manufacturing and retail as being a particular pain point, as it can take three weeks or more to respond to market changes in consumer behaviour, which results in overstocking and loss of sales – a challenge seen during the Covid-19 lockdowns, where many retailers were left holding seasonal inventory that is difficult to sell at full price.

Even though supply chain databases are updated with thousands of pieces of information each day, extracting value from them remains difficult, the company says. Stemly aims to address this by applying machine learning to predict disruptions before they happen, and the company says that if corporates build its software-as-a-service platform into their supply chain operations, they can capture, analyse and easily access real-time data to increase supply chain responsiveness.

“We are helping businesses save 10% to 40% of their cost of inventory and working capital – the equivalent of tens of millions of dollars in some cases – by embedding automatic machine learning in their forecasting and optimisation applications,” says Stemly co-founder and co-CEO Giuseppe Manai.

ING is one of a number of banks that have set up greenfield ventures that go beyond their core business model to address client needs in the global trade ecosystem. In a 2019 report, consultancy firm Oliver Wyman highlighted that banks, faced with increased disruption by fintechs in the space, are looking for faster ways to get new propositions into the market, becoming more fintech-like in the way they do things.

According to the firm, greenfield projects allow banks to break free of legacy systems and deliver radically improved offerings for corporates, faster and cheaper innovation cycles, a lower cost operating model, and a new way of working. “For incumbent corporate and transaction banks, greenfield is becoming an important approach to reposition the business and defend against disruption,” the report says.

One example of a successful greenfield project is Serai, a HSBC-led B2B platform for SME trade, which has evolved from its initial value proposition to focus chiefly on the apparel sector. It enables participants in garment supply chains to search, find and connect with each other via their trusted networks, and includes add-ins such as Coface’s offering, which brings counterparty risk management tools into the network.

ING’s Singapore innovation lab, set up in 2018, focuses on the trade value space, covering the entire ecosystem of goods that are traded globally and the adjacent network of services and financial flows. Its aim is to create minimum viable businesses. Once ready to scale, they are either spun out as standalone companies supported by ING or they continue to develop within the bank.

In Stemly’s case, while it will now operate independently, it will continue to work closely with ING to commercialise its solutions, and will retain access to ING’s global network and financial services expertise.

To fund its expansion, ING Ventures, alongside venture capital fund Elev8, the Singapore Economic Development Board New Ventures and other investors, will invest US$2.5mn into the platform. Stemly is now hiring for numerous tech positions, who will be charged with developing proofs of concept and pilots to demonstrate how the platform’s outputs can generate business impact.