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Ilya Preston’s favorite word might be “risk.”
He mentions it seven times in a 15-minute interview about his startup Paxafe Inc., which uses artificial intelligence to help manufacturers ship temperature-sensitive products, such as drugs and vaccines, without loss or disruption.
“We have this deep understanding of risk,” Preston said.
Across the globe, manufacturing supply chains are notorious for running inefficiently or breaking down. Failures in temperature-controlled cold chain logistics cost the pharmaceutical industry $35 billion annually, according to the IQVIA Institute for Human Data Science.
Even worse, an estimated $600 billion worth of food is lost globally each year during or just after harvest, according to consulting firm McKinsey & Co.
That’s where Preston, CEO and co-founder of Paxafe, thinks he can help.
The company, founded in Milwaukee in 2018 and moved to Indianapolis in 2021, has an AI-risk management platform that predicts when things might go wrong so that its customers can fix them.
The company’s clients include several large pharmaceutical manufacturers, which Preston declined to name, citing privacy agreements.
The service is especially important to drugmakers because vaccines are extremely sensitive to changes in the environment. If the temperature climbs even a few degrees above their storage requirements, that constitutes a breach, which might result in the loss of millions of dollars’ worth of medicines, Preston said.
“There’s a lot of product loss that occurs, specifically due to temperature excursions and a lot of complexity around managing temperature-sensitive products,” he said. “So we can predict those excursions before they actually occur.”
Last week, Paxafe announced it had formed a collaboration with Indianapolis-based Carrier Corp., which has a major business segment focused on warehousing and transporting refrigerated goods.
Paxafe (pronounced “Pack Safe”) operates out of an office on the ninth floor of Circle Tower on Monument Circle. It has a staff of 32 data scientists, machine learning engineers, product managers, software engineers and customer operations representatives.
The work might be technical, Preston said, but the goal is simple.
“The data generated from our platform helps companies ship their goods on time in full,” he said. “We want to minimize disruption throughout the supply chain.”•
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