Reinventing Manufacturing & Supply Chain

Reinventing Manufacturing & Supply Chain

by: Marianne Wu and Ben Sampson

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The New Industrial Playbook

40 North Ventures is committed to bringing venture-backed innovation to traditional industries. We believe that we are in the early stages of a new industrial revolution that leverages tech developed and proven in consumer markets to radically transform foundational pillars of our economy like manufacturing, transportation, the built environment and energy.

These industries are embracing data and digital technology which is leading to better business decision-making, more efficient operations and streamlined workflow and most critically better outcomes for customers. The new industrial playbook replaces centralized organizational silos with responsive networks and collaboration, augments human expertise with automation, and enables products and services to be delivered in response to customer needs rather than be dictated by the supplier.

Manufacturing and Supply Chain — Industries Reinvented

These trends are clear in the changing way goods are manufactured and supplied. COVID-19 has accelerated the evolution as factories were shuttered and global supply chains were strained in the early stages of the pandemic. This shift is being led by venture-backed innovators with several industry leaders also leaning into the trends. We see innovation along a number of complementary dimensions — all of which are enabling more customization and flexibility, shorter lead times, and greater operational efficiency. We are thrilled that Desktop Metal started trading on the NYSE under DM as of today. We expect many more great leaders to be built across Manufacturing and Supply Chain.

Additive Manufacturing

Additive manufacturing enables high performance geometries that can’t otherwise be manufactured and the opportunity to provide customized products at scale. While additive manufacturing started as a prototyping tool, it is now finding a home in production manufacturing. Two of our portfolio companies, Carbon and Desktop Metal, are among the early leaders. Carbon is notably working with Adidas to create performance athletic gear for the average consumer and rapidly expanding into other areas like medical, dental, and other performance applications.

Desktop Metal, trading on the NYSE under DM as of today, is delivering similar benefits in the complex metal printing space with a step change in performance with their binder jet technology. Desktop Metal’s printers can deliver printing speeds 100x faster than the current leading metal printing technologies while also enabling part geometries that were previously impossible to manufacture or required several components assembled together. This order of magnitude change in performance will make metal additive manufacturing competitive on a cost per component basis with casting and computer numerical control (CNC) machining methods for a growing number of components and materials. Already, customers across aerospace, heavy industry and automotive as well as traditional manufacturing service providers are embracing the new technology.

Manufacturing & Supply Chain as a Flexible Network

Just as the cloud transformed compute — networks are transforming manufacturing and supply chains. Curated networks and ecosystems of manufacturing partners and manufacturing solutions like Protolabs are dramatically reducing tooling costs and increasing optionality and resilience for product companies. These networks also allow more efficient utilization of decentralized manufacturing facilities.

On-demand manufacturing and digital inventory can change production strategy and inventory management — for example, spare parts can be locally produced when needed rather than stocked at numerous locations based on inaccurately projected future demand. Early adopters of these approaches are mostly early-stage product development companies without the burden of existing capital assets but larger players are conducting focused experiments too.

Networks are also changing delivery. Flexible warehousing and multi-modal logistics networks have emerged to more efficiently store and deliver goods. Following the consumer transportation model pioneered by Uber and Lyft, companies like Convoy are connecting shippers directly to carriers to provide the same cost and convenience benefits to the transportation of freight. Muti-modal networks are doing the same from warehouse to last-mile.

Digitization/Automation of Design & Manufacturing Workflows

New manufacturing techniques coupled with decentralized manufacturing networks will require an evolution of engineering processes, analytics and workflows to fully realize the benefits. Tools and technologies that automate and/or track traditionally manual steps or seamlessly stitch workflow operations together can provide dramatic improvements in efficiency and reliability while also enabling deeper transparency and consistency across an industrial enterprise. As enterprises increasingly collaborate with distributed partners in real-time, these capabilities take on increased urgency. This evolution will not occur overnight, but the early signs indicate that change is underway.

As an example, our portfolio company Aras delivers the next generation of product lifecycle management (PLM) software to large industrial customers. Aras’ open and flexible platform integrates the stages of product design, manufacturing and support while providing enterprise connectivity that empowers both internal and external stakeholders, including customers and vendors. More digitization and automation tools to support collaboration throughout design and manufacturing are on the horizon.

Optimizing Operational Processes — Smart Manufacturing Plants and Warehouses

Data and automation are transforming operational processes within manufacturing plants and warehouses. Data is proliferating and new analytics are giving plant managers, engineers and operators greater understanding of yield, throughput, uptime and critically, root cause analysis, to improve these and other key metrics. Collaboration tools built for plant and field workers are helping team members troubleshoot issues, share best practices and improve skills.

Automation and robotics are also playing a larger role. Robots are helping scale capacity to meet surging demand for package sorting and material handling driven by e-commerce volumes. They are also being deployed for dangerous or highly repetitive manufacturing and assembly steps to improve worker safety, throughput and quality.

Manufacturing & Supply Chain — Many Opportunities

It’s never been a more exciting time to design, manufacture, or deliver physical products. As consumers, we are used to digital products that are created for us, delivered on demand. New manufacturing, product design and product delivery capabilities are enabling the same capabilities for physical products and many new companies are being created to lead this transformation. At 40 North Ventures, we are excited by this evolution and are thrilled to be working with some great companies that are leading the way. We are always looking for great entrepreneurs who share this vision. Together, we can build a new future.

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