Table of Contents
Introduction
Modern Manufacturing Supply Chains
Understanding Manufacturing Value Chain, Supply Chains, and Operations
The Problem: Manufacturing Supply and Value Chains Are Fragile
The Problem: Manufacturing Hardware Products is a Process Rife With Friction
Partsimony: Eliminating Chaos, Opacity, & Uncertainty in Manufacturing Value Chains
Customer Case Studies: Eliminating The Hidden Costs of Opacity in Manufacturing Supply Chains
Meet The Team: A Passion Driven from Studying Engineering at Georgia Tech and Managing Manufacturing Supply Chains at General Electric
Why Software-Driven Innovations In Manufacturing Supply Chains Matter
Conclusion
Introduction
Each time we interact with a product that is not in its natural state, we are the beneficiaries of some form of manufacturing. I love mangoes, so let’s use them in this example..
I am not benefiting directly from manufacturing if I eat a whole mango plucked right off a mango tree. However, I am benefiting directly from the magic that is modern manufacturing each time;
I buy whole mangoes in a grocery store and take them home with me to consume later, or
I drink a cup or a can of mango juice at home or away from home, or
Consume another product derived from mangoes - jam, chutney, body butter, etc.
The first example, buying whole mangoes in a grocery store might seem counterintuitive; To get to the grocery store the mangoes had to be cleaned, stored, packed, transported, and displayed in various vessels and machinery that needed to be manufactured.
This also means that the way in which much of the world’s population lives is a direct beneficiary of advances in modern manufacturing.
Modern Manufacturing Supply Chains: A Daily Miracle, One of The World’s Wonders
According to the Encyclopedia Britannica; “Manufacturing, any industry that makes products from raw materials by the use of manual labour or machinery and that is usually carried out systematically with a division of labour. (See industry.) In a more limited sense, manufacturing denotes the fabrication or assembly of components into finished products on a fairly large scale. Among the most important manufacturing industries are those that produce aircraft, automobiles, chemicals, clothing, computers, consumer electronics, electrical equipment, furniture, heavy machinery, refined petroleum products, ships, steel, and tools and dies.”
According to Statista;
“The manufacturing market encompasses a wide range of physical goods. This includes the creation of finished products from raw materials or semi-finished goods, as well as the assembly, installation, and repair of industrial machinery and equipment. A diverse range of industries is covered such as food and beverage production, textiles, chemical manufacturing, metalworking, and electronics manufacturing. The activities involved in manufacturing are crucial to the economy and have a significant impact on employment, technological innovation, and international trade.”
“The market consists of 5 main parts, namely medical devices & products market, material products market that is divided into 9 markets, Consumer Goods market with 9 markets within it, industrial products & services market that consists of 2 markets, and automotive products market that is divided into 2 markets.”
One way to get a better understanding of the expansiveness and complexity of manufacturing supply chains is to examine all the steps that go into the creation of simple, everyday products. In I, Pencil, Leonard E. Read does that. Among other things, he states, “Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others,” and “There isn’t a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how.”
The bottomline is that, manufacturing a product as simple and unassuming as a pencil requires a supply chain of such complexity that no one person possesses a truly comprehensive understanding of how the final product comes into existence.
Understanding the Manufacturing Value Chains, Supply Chains, and Operations
In very simple and imprecise terms: A supply chain is made up of the complex networks, ecosystems, and relationships that facilitate production and consumption across an entire industry. A value chain is made up of the networks, ecosystems, relationships, and activities that facilitate production and consumption for one company, with an emphasis on the unique ways in which that specific company can harness its unique organizational capabilities to add value in ways its competitors cannot with the goal of satisfying its customers and gaining their loyalty over the long term.
Within a company that sells manufactured goods to its customers, operations is the part of the company that is responsible for obtaining raw materials and parts from outside suppliers, then combining these raw materials and parts into the finished product that is ultimately sold to customers.
To state the obvious, within a given industry; The state of the industries supply chains dictates the health of a given company’s value chain, which in turn dictates the health of that company’s operations. The health of a company’s supply chain relationships, its unique value chain capabilities and choices, and the state of its operations shows up in the form of financial results and long-term share price performance and market capitalization.
The Problem: Manufacturing Supply Chains & Value Chains Are Fragile
The problem a manufacturing company must grapple with is that any number of disruptions can affect an entire industry’s supply chain, or worse a specific company’s value chain. This can bring production and manufacturing to a standstill, leading to a loss in revenues since a product that isn’t sold in the current quarter or the current year cannot contribute to that period’s revenues.
Supply chains and value chains are described as fragile if any of the many disruptions that they are susceptible to can cause a breakdown in activities such that actual demand goes unfulfilled. In other words, an actual, identifiable customer willing to pay for the product cannot obtain the product because the company selling that product is unable to produce and deliver the product.
Depending on the scale of the disruption(s), that phenomenon can be observed at the level of a single company, or it may be observed at the level of an entire industry. Such disruptions can also extend to affect entire regions of the world, or as we experienced during the COVID19 Pandemic, the whole world.
There are two main ways in which a company can prepare itself to cope with potential supply chain disruptions: The first, and most popular approach is to create a resilient value chain - that is to design the value chain such that it can quickly bounce back and continue to function mostly as it did before the disruption; The second is to design the value chain such that it actually becomes better, in relation to competitors’ value chains when an industry-wide disruption occurs.
In the latter case, the system gains and benefits materially from the occurrence of supply chain disruptions, making it possible for the company that made these choices to win substantial market share from competitors that chose an alternative path.
Both scenarios I have described above require innovations, and new technology to implement. The latter is where companies’ unique and individual choices about the innovations and new technologies they each choose to adopt or ignore really makes a big difference, because collectively these choices form the basis on which sustainable competitive advantage is won or lost.
The Problem: Manufacturing Hardware Products is a Process Rife With Friction
The manufacturing of any new hardware product is rife with many challenges - as I, Pencil so vividly demonstrates.
A simplified and very much non-exhaustive list of a subset of possible considerations includes;
What choices should be made in order to control costs in the context of existing market demand for the product?
What choices should be made, and what is the full suite of options available in order to ensure that the final product and its priors perform to acceptable standards of reliability?
What choices should be made to ensure consistent and predictable sourcing and procurement of component parts to maximize factory utilization?
What choices should be made in order to minimize the costs of supply chain logistics?
What choices would contribute to easier and more reliable testing in order to satisfy regulatory and compliance requirements?
What choices should be made in order to satisfy quality control requirements?
What choices should be made so that after-sale customer service works as a competitive advantage that leads to new revenues rather than as a loss enhancing cost center?
What choices should be made at the outset to ensure that production at scale can happen seamlessly if the initial launch is successful?
What systems and processes should be put in place to ensure design, engineering, manufacturing, finance, sales and marketing, supply chain logistics, sourcing and procurement, and every other team that will eventually be involved in successfully bringing the product to market has some insight into how things are progressing and can weigh in at the appropriate time with information that may be critical to a successful outcome?
What systems should be adopted to minimize risks, including: The risk that customers do not actually need or want the product; The risk of technological obsolescence by the time the product is available on the market; The risk that the product fails to meet regulatory and compliance requirements; The risk that existing supply chains cannot support the product as it has been designed beyond an initial prototype or very small batch that fails to scale to satisfy the existing opportunity, and; The risk that the product that has been designed cannot actually be manufactured - a problem I am painfully all too familiar based on first-hand experience attempting to develop, manufacture, market, and sell a personal air enhancement device at my prior employer, starting in 2010 (Amazon Live: AireSpa Demo Video).
This is where Partsimony comes in.
Partsimony bridges the gap between design, engineering, and supply chain teams.
Partsimony: Reigning in Chaos, Opacity & Uncertainty in Manufacturing Value Chains
Partsimony helps companies that design, manufacture, and sell hardware products turn product designs into actual products with less time, money, and frustration by facilitating collaboration, increasing visibility, and serving as the connective tissue between all the different parties in manufacturing value chains and supply chains.
To deliver on that promise, Partsimony has developed an intelligent supply chain platform that;
Automatically batch processes and analyzes product design files,
Evaluates the designs and generates proposals, in some instances even proposing manufacturing methods, suggesting materials, estimating prices, and estimating lead times,
Automatically identifies optimal in-network and out-of-network manufacturers for each component of the product, automatically batches components to obtain volume discounts where possible, and generates request-for-proposal links that can be easily shared with other organizations whether or not they use Partsimony,
Automatically uncovers the optimal value chain network that meets users’ goals, and generates purchase orders for different components across disparate manufacturers with a single click,
Automatically notifies users of potential production risks, making it possible to eliminate manufacturing bottlenecks before they bring work to a complete halt, and enhances scheduling and production visibility through every link in the supply chain by removing existing information silos, and
Automatically facilitates collaboration across the end-to-end supply chain by acting as the single source of truth for all parties in the production process.
Partsimony is designed with people at its center. While the platform eliminates the vast majority of tedious work in the manufacturing process, users always remain in control. Users retain full control every step of the way - the platform just makes everything users, their teammates, and external partners have to do in order to get a product from mere concept to something tangible in a customer's hands much easier to accomplish with less friction and uncertainty.
Without Partsimony, teams of people trying to coordinate activities between design, engineering, procurement and sourcing, compliance, and supply chain have to rely on emails, phone calls, spreadsheets, word processing documents, PDFs, paper, and data stored and archived in ERP systems. The data from these disparate sources is error prone AND hard to access quickly.
This leads to a lot of invisible and unproductive work, wasted time, a high occurrence of defective products and quality issues that could result in brand degradation. Together, these amount to unnecessary risk and uncertainty for companies that keep doing things the traditional way. Moreover, doing things the traditional way is slow, arduous and time-consuming. Using Partsimony, teams can coordinate activities between design, engineering, procurement and sourcing, compliance, and supply chain almost instantaneously with the advantages that come with data processing in the cloud, decision analytics, machine learning, and artificial intelligence.
How Partsimony Works
The user uploads a bill of material components (i.e. 3D CAD files). Partsimony parses and analyzes this data and provides deep insights to the user. What makes Partsimony unique is the ability to understand the key attributes of parts to provide recommendations, such as; where can we improve our designs for manufacturability? These quick insights, helps teams save time, money, and a lot of frustration.
Partsimony enables users to build detailed and resilient supply chains, in seconds. By entering key details about production needs, Partsimony can analyze each component within a product, and identify the right supplier – whether it’s existing suppliers a user already knows, or new suppliers users can discover all over the world. Partsimony does all this, while maintaining context of each engineered component – a process that could take months, can now be done in seconds.
Partsimony also enables users to strategize in real-time. Leveraging AI to build the best supply chain structure for the users specific goals. Whether it’s optimizing for improved lead times, costs, payment terms, or distance to reduce your supply chain carbon footprint. Partsimony does this instantaneously.
Partsimony is a robust platform that can handle users’ entire product lifecycle needs. Enabling teams to manage the chaos of scaling from prototype to production. Giving them visibility into the status of their parts.
Customer Case Studies: Eliminating The Hidden Costs of Opacity in Manufacturing Value Chains
At REFASHIOND Ventures we prize founders who focus on solving tangible problems for their customers. As such we are excited that Partsimony already has strong customer testimonials and case studies that offer some insight into how different companies might employ its features and capabilities.
Stanley Security - 81% Cost Reduction
Stanley Security needed to reduce costs on a product design update. Strict tolerance restrictions were established in order to avoid cascading changes. Stanley Security had a $22.96 target for how much this update would cost. Using Partsimony the total cost of the update came to $4.43, representing an 81% cost reduction over initial expectations.
Stanley Security is a unit of Stanley Access Technologies, a subsidiary of Stanley Black & Decker that was sold to Allegion in 2022.
Launcher (now a Vast Company) - 7 Months Saved
Launcher needed to find a manufacturing partner that could meet stringent military, aviation, and aerospace certifications. The desired partner also had to be able to work within tight tolerances, and accept very low initial order volumes with the ability to scale production. Using Partsimony, Launcher found a manufacturing partner that satisfied all the requirements within days, and the partner helped Launcher improve the manufacturability of the product.
Launcher is currently developing a rocket engine as part of Vast, a startup developing the world’s first private space station.
Proteus Motion - 37% Cost Reduction
Proteus Motion needed quick manufacturing turnarounds for small batches to enable it validate designs and before scaling production. Using Partsimony, Proteus Motion found manufacturers that offered bespoke solutions to fit its needs, leading to cost reductions as well.
Proteus Motion manufactures performance and strength testing and training machinery from steel, iron, and carbon fiber that is tightly integrated with software, and a resistance system. The machine is about the size of a typical commercial treadmill.
Neurosity - 88% Cost Reduction & 67% Lead-Time Reduction
Neurosity needed to stay within the project deadline in order to avoid missing a key performance target. The project had a lead time of more than 3 months. Using Partsimony, Neurosity was able to accomplish its goals in 1 month, while reducing the project's cost from $4,000 to $469.
Neurosity produces a neuroadaptive device, the Neurosity Crown, that helps people focus, meditate and increase their productivity.
An Anonymous Nanotechnology Company - 96% Cost Reduction, 93% Lead-Time Reduction
The company needed to reduce its lead-time in order to ensure that it would meet the project deadline. Using Partsimony, it found a manufacturer that reduced the timeline from more than 3 months to less than 2 weeks, and cut the project cost from about $50,000 to $1,632.
The company had designed for injection molding. The manufacturer suggested a sheet metal approach.
Rich Mokuolu (L) and Roland Mokuolu (R).
Meet The Team: A Passion Driven from Studying Engineering at Georgia Tech and Managing Manufacturing Supply Chains at General Electric
Richard Mokuolu and Roland Mokuolu are twin brothers and cofounders of Partsimony. Richard and Roland attended GeorgiaTech, earning a Bachelor of Science in Mechanical Engineering, and a Bachelor of Science in Civil Engineering respectively. The initial motivation for Partsimony was born during Richard’s days as a student of mechanical engineering at GeorgiaTech.
Richard developed further insights into the problem Partsimony is solving during roughly five years of tenure at GE, when he spent time in different divisions of GE playing roles of increasing responsibility over time, while benefiting from the world class training programs that GE is known for. Roland went into investment banking, at Barclays, where he spent 5 years after he and Richard graduated from GeorgiaTech. At GE, Richard worked across manufacturing and supply chain management in aviation, oil and gas, locomotives, and renewable energy. At Barclays, Roland worked on large M&A, and strategic refinancing transactions.
Richard holds a hardware patent. His attempts to actually get his product made gave him personal and firsthand experience as to the challenges any person trying to make a new product faces. Simultaneously, his job at GE showed him that even a multinational conglomerate with all the technological and financial resources, and with thousands of people focused on this task, still encounters pretty much the same challenges and difficulties.
In the early days of bootstrapping Partsimony, Richard and Roland assumed that they could adopt an “Uber for Manufacturing'' business model. Their curiosity as engineers led them to examine what was happening under the hood and to question their initial assumptions.
This process led them to two important realizations: First, Partsimony will only succeed if it can exponentially increase the speed to trust between the various stakeholders who would consider using Partsimony to solve a problem they face, and; Second, in order to succeed as an emerging innovation platform serving the manufacturing industry, Partsimony as the platform administrator needs to play a neutral role by not competing with any of its stakeholders.
Richard and Roland also realized that such a platform needed to be less about facilitating transactions, and more about assisting the people using the platform to make decisions better, faster, with more complete information that is updated in real time with very high fidelity, and with a high resolution view of how the decision and the choice they make with respect to that decision will ultimately affect the wholistic outcome. They believe it is insufficient for such decisions to be determined merely by how the choice will affect a discrete component of the whole.
I have written about this unfolding shift in the context of platforms for supply chain logistics, but the same idea applies to platforms for other aspects of supply chain management as well. Specifically, in Logistics network optimization – why this time is different (April 23, 2019, FreightWaves), I wrote: “We are moving out of the age of transactional supply chain management and into the age of cognitive supply chain management. Transactional supply chains are characterized by; A narrow focus on discrete tasks that optimizes processes rather than end-to-end outcomes, static and siloed data that is refreshed at relatively long intervals, local optimization that does not account for global conditions throughout the supply chain network, reactive decision-making that is also relatively slow. In contrast, cognitive supply chains are characterized by; A focus on optimizing end-to-end outcomes within the supply chain network, data that is dynamic, refreshed in real-time and collaborative, global optimization, adaptive decision-making that accounts for the cadence at which business operations occur.”
Partsimony was part of the ventilator response team assembled in NY State in the early days of the COVID19 Pandemic.
The Benefits of Antifragility in Times of Extreme Uncertainty and Disruption
The benefits of this approach are reflected in the brief customer case studies earlier in this article. But the potential significance of what Partsimony does is highlighted in New York Needed Ventilators. So They Developed One in a Month, an article by Steve Lohr that appeared in the New York Times on April 22, 2020, in the early days of COVID19.
As you surely remember, ventilators were in very short supply during the early days of the COVID19 Pandemic. It seemed an impossible task to ensure that healthcare systems in the United States, and in other parts of the world, would not be crippled by a lack of ventilators meeting government regulations. As the article puts it, “A standard ventilator, with thousands of parts requiring a complex global supply chain, was hardly a device that could be manufactured quickly and affordably.”
However, the article goes on to say, “But they soon found a design for a basic ventilator that could serve as their core technology. Since then, they have orchestrated from New York a far-flung collaboration of scientists, engineers, entrepreneurs, physicians and regulatory experts and accomplished in a month what
would normally take a year or more.”
Furthermore, “The result are machines known as “bridge” ventilators, or automatic resuscitators, priced at $3,300. They are mainly meant to help less critically ill patients breathe. If patients become sicker, with lung function more compromised by the disease, they still need to be placed on standard ventilators, which typically cost more than $30,000.”
At risk of stating the painfully obvious, the addition of bridge ventilators to the arsenal of options healthcare professionals have to work with as they contend with COVID19 and other respiratory diseases results in a better, more robust healthcare system overall, in both the short-term and the long-term.
Explaining the role that Partsimony played, Rich Mokuolu says, “Partsimony played a key role in empowering the Spiro Wave team to rapidly identify suppliers at the part level and utilize alternative manufacturing solutions to overcome obstacles in scaling ventilator production. As a result, the Spiro Wave team was able to hit their production targets within 3 months despite other ventilator initiatives taking over 6+ months.”
In summary, Partsimony:
Sped up the time to production by at least 50%,
Made it possible for the Spiro Wave team to source alternative parts suppliers, ensuring that costs could be kept down without compromising quality, and
Contributed to Spiro Wave being brought to market in 1 month rather than a year or more; That means it took 92% less time to bring Spiro Wave to market.
An antifragile system is one that gains from disorder. In other words, a company with an antifragile value chain gains market share and serves its customers better with increasing supply chain shocks and disruptions. In contrast its competitors suffer degradations in customer service and satisfaction, or at best, struggle to quickly return to the former state.
Using a platform like Partsimony, companies can start to develop antifragile value chains.
Partsimony helping ship ventilator units for testing.
Why Software-Driven Innovations In Manufacturing Supply Chains Matter
According to the National Institute of Standards and Technology (NIST) in U.S. Manufacturing Economy;
“In 2022, Manufacturing contributed $2.3 trillion to U.S. GDP amounting to 11.4 % of total U.S. GDP, measured in chained 2012 dollars.”
“Including direct and indirect (i.e., purchases from other industries) value added, manufacturing contributed an estimated 24 % of GDP.”
“According to the Current Population Survey, there were 15.2 million employees in U.S. manufacturing in 2022, representing 9.6 % of total U.S. employment.”
“Manufacturing accounted for 76.6% of total U.S. environmental impact according to NIST’s Manufacturing Cost Guide.”
“Average compensation in U.S. manufacturing is 6.3 % higher than that for total private industry.”
“Manufacturing accounts for 17.5 % of global GDP”
“Since 1970, global manufacturing ranged between 13.7 % and 17.5 % of global GDP.”
“U.S. manufacturing value added, as measured in constant 2015 dollars, is 16.3 % of global manufacturing value added, putting it second to that of China, which is 30.9 %.”
“Among the ten largest manufacturing countries, the U.S. is the 2nd largest manufacturing value added per capita while China ranked 8th. Out of all countries the most recent U.S. rank is 14th.”
“Out of six manufacturing industries, the U.S. ranked 2nd in all but textiles/clothing where it ranked 4th. China was the largest for all industries.”
Manufacturing is an important and critical industry, domestically and globally. According to the United States’ Environmental Protection Agency (EPA), “a large and growing number of manufacturers are realizing substantial financial and environmental benefits from sustainable business practices.” The EPA defines Sustainable Manufacturing as “the creation of manufactured products through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources. Sustainable manufacturing also enhances employee, community and product safety.”
At this stage in its development, Partsimony is focused on;
Electronic Equipment Manufacturing,
Fabricated Metal Products Manufacturing,
Appliance and Component Manufacturing, and
Transportation Equipment Manufacturing.
Partsimony helps its customers in the following ways;
First, Partsimony drastically reduces the amount of time and money spent developing a product and bringing it to market. This enhances economic and financial sustainability;
Second, for businesses operating at scale, Partsimony makes it easy to find alternative suppliers in the event an existing supplier is taken offline temporarily or permanently. This enhances continuity of operations, further strengthening economic and financial sustainability. Ultimately this increases brand equity and enhances reputation.
Third, Partsimony increases collaboration and visibility throughout the product design, prototyping, and manufacturing process across time and space, in different organizations. At scale and over time this leads to improvements in quality, less product waste, and lower negative environmental impact.
We are #ObsessivelyEnthusiastic
As we say at REFASHIOND Ventures, we are #ObsessivelyEnthusiastic about what the team at Partsimony is building. We became investors in March 2023, but we have known Richard and Roland since 2018.
I believe that we are in the early stages of a Golden Age of Supply Chain Networks, Platforms, and Ecosystems. Partsimony as it stands today is barely scratching the surface of what is possible. If Richard and Roland succeed, they could revolutionize how Research & Development, Design, Engineering, Production, and Quality Control collaborate and work to bring new products to market within and across organizations.
REFASHIOND Ventures: The Industrial Transformation Fund invests in early stage startups refashioning legacy industries through Data & AI, Advanced Materials, Advanced Manufacturing, & Next Generation Supply Chains; Defensible through economic moats. If you are a startup founder who believes that what you are building fits our thesis, please fill out our data-intake form. We review submissions on Mondays, Tuesdays, Wednesdays, and Thursdays during our team meetings, and we reach out to the startups from whom we would like more information.
At most venture capital firms, early-stage Industrial Transformation & Supply Chain Technology is a tiny, emerging “area of interest” . . . At REFASHIOND Ventures, it’s our entire world. Startup founders can learn more by reading the For Founders section of our website.