Digital Supply Chain

Satellite Data: The Future of Supply Chain Compliance? A Dive with LiveEO

September 29, 2023 Tom Raftery / Sven Przywarra Season 1 Episode 353
Digital Supply Chain
Satellite Data: The Future of Supply Chain Compliance? A Dive with LiveEO
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Show Notes Transcript

🌍 In this exciting episode of the Digital Supply Chain podcast, I had the privilege to chat with Sven Przywarra, the co-founder and Co CEO of LiveEO. We dove deep into a hot topic - the new EU Deforestation Regulation and why it’s vital for businesses across the globe.

You might be thinking, "Well, I’m not in the EU, so this doesn’t concern me, right?" Think again! 🌳 As Sven explains, the EU's new regulation isn’t just for European companies. If you do business with any European entity or import into the EU, it’s time to sit up and take notice. Just like the GDPR had global ripples, the EU Deforestation Regulation is set to follow suit.

Are you a small business owner, and wondering if this applies to you? We discussed that too! The scope of companies this affects is vast. Whether you're selling coffee or timber, understanding this regulation is crucial.

But don’t worry, that's where the brilliance of LiveEO comes in. 🛰 They aren’t trying to be another supply chain software; they’re offering a powerful 'plugin' to help businesses ensure they're deforestation-free. Satellite data is changing the game, and LiveEO is right at the forefront.

Toward the end, Sven shared LiveEO's bigger vision and how they plan to unlock the full potential of observation data. It's a thrilling journey, and I'm thrilled to have brought it to your ears!

If you're keen to dive into details, LiveEO has a white paper on the EUDR regulation on its website. 🔗

Huge thanks to Sven for sharing his insights and making this a valuable episode. And to you, for tuning in. Also, remember to check out the video version of this episode on YouTube.

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Sven Przywarra:

The European Union, just has issued a new law two months ago, which requires any importers of seven main commodities, including timber, cocoa, coffee, soy, palm oil, rubber, and cattle, any company who imports any of these goods needs to validate that where these goods are coming from, no deforestation has been caused

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain Podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi everyone and welcome to episode 353 of the Digital Supply Chain Podcast. My name is Tom Raftery and I'm excited to be here with you today sharing the latest insights and trends in supply chain. Before we kick off today's show I want to take a moment to express my gratitude to all of our amazing supporters. Your support has been instrumental in keeping the podcast going and I'm really grateful to each and every one of you. If you're not already a supporter I'd like to encourage you to consider joining our community of like minded individuals who are passionate about supply chain. Supporting the podcast is easy and affordable with options starting as low as just three euros or dollars a month. That's less than the cost of a cup of coffee and your support will make a huge difference in keeping this show going strong. To become a supporter, simply click on the support link in the show notes of this or any episode, or visit tinyurl. com slash dscpod. Now, without further ado, I'd like to introduce my special guest today, Sven. Sven, welcome to the podcast. Would you like to introduce yourself?

Sven Przywarra:

Sure. Well, thanks for having me. Exactly. You said it. I'm Sven. Sven Przywarra, I'm co-founder and Co CEO of LiveEO. LiveEO is a satellite data analytics company and I'm very much looking forward to the next couple of minutes.

Tom Raftery:

Thank you. Thank you. Now, a satellite data analytics. I mean, a lot of times when I have people on the podcast and they give the kind of top line introduction of what they do, it, it, it's very broad and. Satellite data analytics, not as broad, but still, you could use satellite data analytics for lots of different things, but in your case, it's quite specific. Right. What is it that your satellite data analytics enable?

Sven Przywarra:

you're absolutely right. Satellite data analytics is rather broad. And honestly, when we started the company, because my co-founder Danny and I, we, we share that belief that with satellite data, you can solve many, many different problems in many, many different industries and sectors. But what we decided is that we want to go deep in specific industries to really offer a solution which can help, to solve specific problems. And we've done so over the last couple of years and have built a solution which helps grid infrastructure operators globally, pipeline and rail operators to maintain their infrastructure grids. And we've now over the last couple of years, expanded into the supply chain space to help, companies globally to yeah, comply with certain new supply chain regulation, to make sure that they don't leave a negative impact on the earth.

Tom Raftery:

Okay. Let, let me, before we get into that, give me a little bit about the genesis. What was the kind of, Damesscene moment that you had that, you know, you woke up and said, let's start this satellite data analytics company.

Sven Przywarra:

So, I was always fascinated with space and it started with watching Star Wars, uh, in the cinema. and, and from there on I was captivated with the idea of sending something into orbit. And I studied business engineering with a focus on space technology. And I started to work in a hardware company, which was working in, in the space sector. But what I felt is that we already had launched, or humanity already had launched so many satellites into space, which captured imagery of every single place, in an ever higher growing, frequency and with a always better, resolution. And I was wondering where are people using this data? And I wasn't seeing that. And so my co I met my co-founder at the conference and he was seeing it exactly the same way. And we bel we thought if you have really information about every single place around the earth, where every asset anyone has ever built or is working on, what could you do with that data? And we, we went onto the drawing board and we thought around, but that was really the moment when we thought, oh, oh my God, you have so much information and with AI, you have the tools to unlock this information and the insights from this information. It's a great opportunity. Let's do it. And that was the reason why we started LiveEO with the ambition to unlock the full potential of earth observation for humanity and life on earth.

Tom Raftery:

Okay. And you said you started working with grid operators and things, was that, was that like vegetation management solutions or what were you doing for them?

Sven Przywarra:

So at the very beginning we thought around, okay, what's the big, yeah, unique selling proposition, USP of satellite data. And it is that you can monitor vast areas in an, in an instance, and this is not possible with any other technology. And we thought, okay, which company in that, was back in 2017 and 18, which companies have issues which are widely distributed, for which one entity needs to pay. Because in the end, if you build a company, you need to build something for which someone pays. And we said, Hey, well these, yeah, these, specifics really are fulfilled by grid operators such as railway operators, electric grid operators, which need to maintain their networks. And one of the biggest problems, and you touched on it is vegetation next to overhead lines, next to railways, which can fall into these networks and I mean the grid, uh, the wildfires in Hawaii, or also less less catastrophic events such as just a tree on an railway network shows quite clearly what the negative implications of, of such an event can be. And obviously these grid operators want to avoid that. And so with climate change, you have more and more of extreme weather events, and so you need to have a paradigm change in the way you maintain your networks. And here satellite data comes in. What we can do and what our company offers is that we analyze your entire network. Doesn't matter whether it's a thousand kilometers, 10,000 kilometers or a hundred thousand, we can monitor the entire network and tell you as the network operator precisely where you need to deploy forces and resources to maintain vegetation. we're doing this on a constant basis, and this is exactly was the first product which we launched, and which is now being used on every continent of the earth by grid operators, large and small.

Tom Raftery:

Fantastic. And then you said now that you're moving into a new area, so tell us a little bit about that

Sven Przywarra:

Because again, like the, the starting kind of hypothesis of LiveEO has been that satellite data is really applicable and can provide value to many, many different industries. And so our tech stack, which we've built in the background, which allows us to analyze satellite data at large scale, is useful for, for many different industries. And so we thought, okay, what could be the next industry where we can prove that? And so we looked around and we've identified that obviously monitoring vegetation, as easy as it sounds, it's not that easy if you really have to do it with very high precision at large scale. We thought, hmm, who could use this kind of capacity as well? And then we, we really took, multiple months to reinvestigate different markets. And then have identified an opportunity in the supply chain space, which is, a new regulation, which is part of a bigger paradigm shift in the area of regulations, which is coming from the EU. And I'm gonna speak about this in a second, but maybe the bigger picture. More and more regulatory bodies are requiring importers of goods, people procuring stuff to make sure that the things they are procuring don't have any negative impact on the place of origin, and it's exactly kind of the storyline under this new EU deforestation regulation. The European Union, just has issued a new law two months ago, which requires any importers of seven main commodities, including timber, cocoa, coffee, soy, palm oil, rubber, and cattle. That any company who imports any of these goods needs to validate that where these goods are coming from, no deforestation has been caused. No deforestation means that no trees have been cut back. No natural trees have been cut back, with the cutoff date, 31st of December, 2020. Obviously, it puts a lot of people, puts a lot of question marks up, like, how should I do that? A. If I'm an importer of of palm oil, how should I make sure that where the palm oil is coming from, let's say Southeast Asia, that this hasn't led to deforestation? And how do I go back in time and prove that? And what's the proof? And do I really need to do that? Now to the last piece of that question, the answer is yes, companies need to do that. The European Union says, if you don't do that, you have to pay up to 4% of your turnover as a fine. And how much time do I have to comply with this regulation? It's, it's only really 18 months until the end of 2024. Big companies need to comply with this regulation and need to have validated the entire supply chain. And small companies until mid of 2025. And so to come to, the, the answer to the second part of the question, how can I prove that I haven't caused, deforestation at the end of my supply chain or at the beginning. And the EU says, you can use satellite data for that. And obviously we said, okay. Wow, that, that makes a lot of sense. And here we are, we've analyzed vegetation. We know how trees look like, we can monitor what soil looks like, or timber or cattle, palm oil and so forth. We can provide that proof, and that's where we said, okay, let's build a product for the supply chain sector. And we've built a compliance tool to, for companies to comply with this new, new EU supply chain regulation. Exactly.

Tom Raftery:

So this regulation means that if I am importing something, I am responsible to make sure that whatever it is I'm importing from those seven categories that you mentioned, that, I'm sourcing it responsibly. I have to be able to prove that my suppliers are not causing damage where I source it from. That's, that's basically what the legislation says.

Sven Przywarra:

Absolutely. That's, that's absolutely correct. And, it's kind of a very strict regulation in a sense that you can't just like, let's say, validate 50% of your suppliers, or let's say 60% of your suppliers and say, well, I've validated that more than the majority of my suppliers are complying with the regulation. So I can import, let's say, a hundred percent of my goods. You need to really do a hundred percent check of your supply chain base. And obviously, as you said, it's not, that's not easy.

Tom Raftery:

Sure. And how do I trust the information that the suppliers are giving me? If they say they're getting this from this particular plot of land, how do I know they're not saying the same thing to four or five other or 10 other customers theirs

Sven Przywarra:

Yeah So obviously this is a very good question and, and not a question which has been answered in the regulation. I think the regulation is a start in, in the right direction to make sure that, companies in the western world are not causing deforestation natural damage on the other side of the globe. But, it's true that there are still some wide spots in some, some loopholes in this regulation. This is one of them. How we, on our side to make, try to make sure that, this loophole is, is fixed, is by, yeah, using analytics in the backgrounds to make sure that, for example, a certain plot of land is only producing a reasonable amount of a commodity so that a supplier is not only providing one fourth of the entire plots of land, which has hasn't led to deforestation and say that all the commodities are coming from there, but, that might be not even possible physically. So that's one way we do it. The other ways we are doing it is that we are, implementing, different types of analytics to prove that we, this type of, commodities coming from that plot of land, we are providing some, additional support for the, um, for the people on site, for the farmers and so forth, to really, be as precise as they can in putting in the plot of land where the commodity is being sourced from. And then right now we are also working on some additional features, which will provide incentives to the farmers to put an exactly the right size of, of land into the system, but this is a feature which we're still working on.

Tom Raftery:

Okay. And. Can you, is it easy from your satellite data to identify the different vegetation that's on the land, palm, oil trees versus, I don't know, oak trees versus whatever else might be their natural trees?

Sven Przywarra:

So it's it's not as easy as one thinks, especially because, in areas such as Southeast Asia or in fact like the regulation. So also if you're a Norwegian, let's say, if you would, if there would be possibility it would be Norwegian palm oil producer, you would also need to prove the validation. So it's really every company who's importing and placing any goods onto the European market needs to validate their, imported goods. So the thing is that this obviously causes a problem because you need to be able to provide high quality analytics, for example, differentiating different species on a global scale, which is very difficult because you have different atmospheric conditions all across the globe. You have different species conditions all across the globe. But the great thing about this is that we have been str that we have struggled with the problem five years ago and have built a solution which overcomes this. So we are using state of the art AI. The highest quality satellite data on the market to exactly provide very clearly and very high accuracy results in terms of like, that's a palm oil tree and that's natural forest to, to really allow the buyers of these commodities and also obviously the regulatory bodies to have a high level of trust in our validation methods.

Tom Raftery:

And you know, I live in Spain now, but I'm originally from Ireland and I gotta think . There can't be great satellite imagery available of Ireland given it's covered in clouds 95% of the time. Yeah, uh it's a little bit of a facetious question. I, I assume you've ways to, to deal with cloud cover

Sven Przywarra:

Yeah, absolutely. Obviously cloud cover is the, is the enemy of satellite imagery. but the great thing about it is that, would've been a, a big, big problem if we would dial back 10 years. But, in the last decade we have seen an explosion in the number of satellites in orbit. So you now not only take an image, maybe four times a year, in which, for, in which case, for example, for Ireland or also for countries in the tropic, would be very unlikely that there would be any image without clouds in it. Or with, with, with cloud, with no clouds over the area, which you would like to look at, but now you have satellites in orbit, which are taking pictures every single day of the year. And we are taking this imagery to exactly prove out it's there. And, and then even in Ireland and even in the tropics, you will find a patch of one time stamp where that's the case. And most likely multiple of these. And what we do is we, we stitch, stitch them together to generate a cloud free mosaic, on which we then run our analysis.

Tom Raftery:

Okay, cool, cool. And the listenership of this podcast are about 35 to 40% EU based. So for the other 60 to 65% can they just forget about this and switch off the podcast now 'cause it's not, not relevant

Sven Przywarra:

I, I don't think so. So if you do any business with the, with the, so if you're doing any business with any European company or importing anything into the European Union, also, if you're not a European company, you need to comply with that regulation. So similar with GDPR, this is really like forcing a regulation not only onto the European Union and its companies, but globally. That's number one. And then similar, again, similar to GDPR, which sparked similar regulations all across the globe, we already see similar regulations being put in place in the UK and in the US. So, it's most likely the case that this won't just be a, a, a regional thing for companies in Europe, but also that the regulation will apply to other companies. And so obviously the best thing for business continuity if you wanna make business with the European Union, and obviously also to be prepared if regulation comes into place in the UK or in the US is already today to comply with, with that regulation. Because also the thing is that if you are a company who has a long supply chain or a complex supply chain, uh, you wanna make sure that your supply chain is compliant with that regulation prior to the cutoff date. Because again, the cutoff date is, the last day of the next year. So it's, it's not even 18 months any longer if you're a big company. Then you can't import the goods into the European Union, and obviously you wanna avoid that. So, it makes sense to think around, about the regulation now and to think about how a satellite data in life you might, can help you.

Tom Raftery:

Okay. And is it, is this mandatory for all companies in the EU or is there kind of a cutoff based on revenue or employee numbers or, you know, is it if, if I have a one man shop where I'm selling, I don't know, sweets in a corner, am I liable to, to this or do I have to be over 500 employees or, you know, where, where's the cutoff, if any?

Sven Przywarra:

if you're a bigger company, obviously it's more strict, but, it is, it's applicable to more than a milllion, 1.3 million companies. So you can really say large and small. It's all the companies which are importing or placing any goods onto the, onto the European market. So if you are a company who just buys from his local, shop, Yeah. And, and resellers stand on the street corner. Well then you don't have to worry about regulation, but if you are, for example, a small coffee reseller and you're buying coffee in Yeah, let's, let's say, west Africa and importing it, you have to deal with that. And it doesn't matter whether you're two people or whether you're 200 people, you have to comply with this regulation.

Tom Raftery:

Okay. And where's it going from here? I mean, is this the end of it or will this legislation go broader, wider, deeper? What? Where do you see

Sven Przywarra:

I mean, what what we are seeing is a lot of regulation, which goes in the direction of, making sure that you as a company are fully aware of the, emissions and negative implications on the environment you're producing, and that you need to be transparent about that, to inform the, the, the capital markets about this. And what we've seen over the last couple of years is that investors have much less interest to invest in, in yeah, climate harming companies than, than the ones which are not causing any harm on the environment. these, this EU DR is one piece of a much bigger movement globally of pieces of regulation, which enforce not only to monitor your supply chain, but monitor the entire activities of your business in terms of emissions, and, and obviously also other ESG factors. And so I don't think that it will end here. I rather think that this is part of the beginning. And the great thing about this is that it would also not have been possible, let's say 10 years ago, right? Because I mean, a lot of companies here also of your listenership have already thought very deeply and very hard around like, how do I keep track of my supply chain? And there have been great digital tools out there, which have been doing that. So also to be very clear, what we are not doing is we are building a new supply chain software. What we are offering is a, is a plug-in, is a piece, is a complimentary tool which allows you to comply with that piece of this new supply chain regulation. But again, like I think that we are gonna see more regulation which goes down in that direction and, I'm sure that there's gonna be companies like LiveEO which will help, buyers and, and sellers of of products and goods to yeah, deal with this regulation.

Tom Raftery:

Okay, so you see maybe. More than the current seven categories you, you see that maybe broaden out to 8, 9,

Sven Przywarra:

Yeah, and it's already in the making. These, these discussions are already happening. It started, by the way, with only timber. It was the EU timber regulation, which then became the EU Deforestation Regulation, which now started with the seven commodities, but it's already in discussion to expand that. Yeah.

Tom Raftery:

Okay, cool. Interesting. And you alluded there to the fact that you're not trying to be a full supply chain solution. Rather you are a plugin for companies existing supply chain, supply chain. You think I'd be able to say supply chain at this point? 350 podcast episodes later, . Uh, so you're a plugin for existing supply chain solutions. So is it a kind of an API interface that you make available to people or how, how do they

Sven Przywarra:

So exactly. So we have standalone, like we have a standalone application with a web interface and a mobile app for field crews. So if you are a company, company who decides to have that separately, you can do so. You can with a single sign on with your Gmail account, with your Outlook account, you can sign up and easily upload your supplier list, which then get an email and which can even like, which to few touch solution for anyone who wants to have a standalone solution. If you already use an SAP supply chain solution or a Source Map or any of the other tools, what we're doing is we are right now building out a lot of APIs, into these different systems which allow companies, which already have a supply chain solution to make sure that they don't need to worry about, okay, I have a new tool, what we are offering as a plug-in this tool. Have that geospatial component in it. The people are able and suppliers are able to draw their polygons and that people are, and that we are able to analyze their plots of lands to provide that proof of deforestation free status back to them. And then obviously for the very, let's say, tech savvy people, we have the standalone APIs if they wanna implement it themselves into those tools. So we have all these three options available.

Tom Raftery:

Cool. Cool. And where to next for LiveEO? I mean, you started with the likes of vegetation management for grid operators, and now you're doing the EU deforestation regulation compliance. What's, what's next on your roadmap? Have you

Sven Przywarra:

Yeah, like, so again, coming back to what kind of the starting hypothesis of life here has been, we are convinced that satellite data can help with many, many different solutions, uh, problems in, in all kinds of industries. And so what we said is we wanna start in one industry, which we've done in the infrastructure sector. Then we wanna expand to a few adjacent ones like the supply chain space. And we have some others cooking. But ultimately we believe that the technology which powers our own systems, will be able to be directly fed into new applications built by other companies and being used by other companies. So ultimately we believe that we wanna, we will go down the path of becoming a platform company and opening up our APIs. So if anyone's out there who already today wants to try out how they can leverage satellite data for their own applications, I would be more than happy to talk to them already about that. But that's kind of like the long-term vision of the company because in the end, we wanna unlock the full potential of, of observation data.

Tom Raftery:

Okay. Cool, cool, cool. Sven, we're coming towards the end of the podcast now. Is there any question I have not asked that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Sven Przywarra:

Yeah. maybe maybe we've touched on it slightly, but I think like, again, like maybe to summarize what people maybe should take away from this, this podcast, I think it's, it's, I. It's the, this new EU deforestation regulation, despite the fact it's being new, it's super relevant if you wanna have business continuity, but how do you know whether your supply chain is already compliant or will be compliant in 18 months from now, or 16 months from now? You better start thinking about this now, and we would love to help you doing that. And please feel free to reach out and, and even if you, if you say, well, we have still have time that might be true that there are still 60 months left. But if you have a complex supply chain, you wanna maybe test out how much of my supply chain maybe is not compliant so that you can start, finding new suppliers and, and to, to really ensure business continuity. And LiveEO would obviously love to, to help you with that.

Tom Raftery:

Super. Super. Sven that's been fascinating. If people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct

Sven Przywarra:

obviously you can always reach out to me via LinkedIn. Yeah, I'm, I'm quite active. And then obviously if we wanna find out more about LiveEO, live-eo.com. And if you wanna find more about EUDR, just Google LiveEO and EUDR, EU Deforestation Regulation. You find all the information including white paper, but I think we also will be able to link that in the show notes.

Tom Raftery:

Yeah. Yeah. Send me any links that you think are relevant and I'll put them in the show notes for people. Superb Sven, that's been fascinating. Thanks a million for coming in the podcast

Sven Przywarra:

Thank you very much for having me. It was a pleasure.

Tom Raftery:

Okay, thank you all for tuning in to this episode of the Digital Supply Chain Podcast with me, Tom Raftery. Each week, over 3, 000 supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose our guests or a personalized 30 second mid roll ad. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn or drop me an email to tomraftery at outlook. com. Together, let's shape the future of the digital supply chain. Thanks. Catch you all next time.

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