EXCLUSIVE: Can Gap's AI Water Bet Fix a Leaky Supply Chain System?

Yahoo

2 days ago

Gap Inc. has signed a 10-year deal with Fido Tech to fund AI-powered leak detection across 350 kilometers of water pipelines in Bengaluru.
'Water resilience is a critical issue both for Gap Inc. and for the communities in which we operate,' Dan Fibiger, Gap's vice president of global sustainability, said. 'The collaboration has the potential to significantly improve water resilience for communities, industries and ecosystems in a region that faces growing demand and limited supply—it's fundamental to our efforts to bridge the climate gap in the context of our supply chain.'
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Meet Fido: A UK-based global technology company using deep learning to rapidly improve global water management and community water resilience at scale, specifically within leak detection and non-revenue water (NRW)­—aka, water that gets 'lost' before reaching its intended end-user.
Fido stated that water loss from leaks (aka NRW) is a major driver of water stress, especially since many leaks are hidden underground and difficult to detect. The World Bank estimates that roughly 30 percent of the world's water supply is lost in this way, although the rate varies across utilities.
Emerging from the 2019 United Utilities Innovation Lab cohort—a 12-week program for emerging enterprises to collaborate with the UK's largest listed water company—Fido's sensor agnostic data-as-a-service (DaaS) platform functions as 'a microcosm of systems thinking for the water industry.'
Billed as cutting-edge water leak detection technology, the AI platform and in-field device utilize multi-path data analytics algorithms to analyze both audio and kinetic signals, enabling the detection of leaks in pipe systems regardless of the material or existing infrastructure.
For areas without embedded sensors, the company deploys its proprietary, capex-free mobile 'Fido Bug' devices along pipe networks to gather real-time data and generate leakage heatmaps across the network. Using these bugs with its proprietary Cloud Correlation technology, Fido claims it can locate leaks within a one-meter radius. The platform's AI-driven leak detection claims over 92 percent accuracy and offers estimated leak sizes—an edge that's earning attention in the smart infrastructure space.
'This insight removes human error from the detection process and prioritizes the leaks that matter,' according to global water solutions provider SKion Water, 'thereby improving efficiency, reducing leak runtime and, ultimately, water losses.'
For reference, Fido was absorbed by the global water tech firm during a multi-million-pound acquisition (and follow-on investment led by Emerald Technology Ventures) in September 2022. SKion Water is a subsidiary of SKion GmbH, an investment company founded by Germany's richest woman and heiress Susanne Klatten.
Fido said its results are verified using volumetric water benefit accounting and a global water stewardship standard, now spanning five continents.
'Water stress affects families, businesses, livelihoods and the environment,' Victoria Edwards, co-founder and CEO of Fido Tech, said. 'Places like Bengaluru are on the front line.'
Also known by its colonial name, Bangalore is the largest city in Karnataka and a central hub for South India's garment industry. Nongovernmental organization Cividep India alleged that Bengaluru accounts for 20 percent of the republic's total annual garment production.
It's also the region that saw thousands of garment workers forced to resign following pandemic-induced financial losses—in turn, losing half a billion dollars themselves in withheld severance, per the Worker Rights Consortium.
To that end, Edwards continued, 'forward thinking companies' can tap in for an alleged-enduringly positive impact.
'By using their skills and resources to help accelerate of new technologies they contribute not just to immediate water replenishment; they help improve institutional capacity in utilities for the benefit of all consumers,' Edwards said. 'I am delighted to be working with such a talented team.'
On the topic of this supply chain climate gap, Gap Inc.'s 83-page 2023 ESG report outlined the group's path to net-zero by 2050. This included updated water stewardship aspirations, such as to 'reduce water use and replenish water to nature, equivalent to 100 percent of the water used in manufacturing apparel and in our company-operated facilities' by 2030, per a March 2023 announcement.
While Gap Inc. doesn't explicitly mention sourcing from a specific state, such as Karnataka, in its publicly available information, the company has significant sourcing operations in India and a dedicated team in Bengaluru, according to LinkedIn insights.
Consider Gap as something of a four-quadrant group for Americana's middle market. The Old Navy owner collaborates with vendors that have facilities across 25 countries, according to the Yeezy collaborator's 2022 ESG report. China, India, and Bangladesh collectively account for approximately 76 percent of the group's total procurement spend, according to a 2022 CDP Water Security Questionnaire.
That said, the 'supply chain climate gap' doesn't seem retailer (or revenue) specific.
Consider Kering's internal analysis that was shared last week. It indicated that 66 percent of the luxury conglomerate's water consumption occurred during the production phase of raw materials. As the Balenciaga and Givenchy parent company keeps sourcing diversified—spanning several continents for its key materials—water scarcity doesn't seem region-specific, either.