[qi:066] Instead of trying to finish up nearly half a dozen unfinished posts, I ended up spending my entire weekend curled up with Ian Ayers’ Super Crunchers, a book that talks about how analyzing numbers can open doors to incredible insights. When you look at our increasingly sophisticated network architectures, the ability to do this kind of complex number crunching in real time can prove to be a treasure trove.
In recent past, we have written about data-centric companies like Summize (bought by Twitter), Glassdoor, Skygrid, Placebase and Sense Networks. Add to this growing list of companies New York-based Panjiva that was founded by CEO Josh Green and CTO James Psota. The 11-person company was started in 2005 and counts Battery Ventures and Larry Summers (former Treasury Secretary and incoming director of the National Economic Council) amongst its investors. Its main product is a web-based supplier monitoring tool that is targeted at corporations and not consumers.The company has developed a proprietary algorithm that allows it to take the usually very messy and raw shipment data from sources such as the U.S. customs, clean it up, and then analyze it to determine get a better understanding of the global manufacturing systems. (The funny thing is that most of the data has been available publicly, but no one has yet been able to sort through it intelligently.) Panjiva’s ability to account for glitches large and small (such as misspelled names of Chinese manufacturers) is one of the many tricks up its sleeve.
“By analyzing data, we can help companies manage their risk,” Green told me last week. Green says the idea came to him when he was told by a previous employer to find a factory in China that could make goods for the company. He discovered that there were too many manufacturers but very little information. He took his problem to Psota, and thus Panjiva was born, almost three years ago. The company has taken a lot of data from public and private data sources and has created a matrix that can be sold to people who want to keep an eye on their supply chain.
By correlating shipments with overseas manufacturers (and their financial health), Panjiva hopes to offer a watch list to U.S.-based buyers and tell them which are risky partners. It is going to diversify into different industry sectors in 2009. And just to prove itself, the company did an analysis of the garment food chain and came up with some chilling results that should cast a dark pall over U.S. economy. According to data collected by Panjiva, in July 2007 there were 43,000 factories supplying clothes to the United States. By July 2008, that number had dropped to 22,099 and in October that shrank to 6,262. Even of those active, nearly 40 percent have seen a 70 percent decline in the volume of clothes they were shipping to the U.S. That is a chilling statistic, and the tremors are being felt in China, where 67,000 factories had closed by end of the third quarter, according to Green.