Breaking the Bottleneck | Issue 18
[07/24/2023] Flex Labors Importance, Space Manufacturing, Metafold & More!
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, and a startup database. For a high-level market map on discrete and continuous manufacturing click the link here! If you know anyone looking to chat about manufacturing tech, I’d love to talk!
Content I Enjoyed This Week 🏭🗞️🔬
News:
Better, Cheaper Prescription Drugs Are on the Horizon [Bloomberg]
Continuous manufacturing, an advanced pharmaceutical manufacturing process, has the potential to revolutionize the drug industry by making the production of drugs faster, cheaper, and more precise. This method, which is already adopted by some major drugmakers, could help reduce reliance on overseas manufacturers and address drug shortages. However, broader adoption of continuous manufacturing faces barriers such as high upfront costs, resistance from companies invested in traditional batch manufacturing, and regulatory approval challenges. To speed up the transition, the FDA could streamline the application process, while Congress could establish nationwide centers of excellence to support advanced manufacturing and allow immediate deduction of R&D costs. Policymakers need to facilitate the adoption of continuous manufacturing to unlock its transformative potential in the pharmaceutical industry.
TSMC Delays Start of First Arizona Chip Factory [WSJ]
TSMC, the world's top contract chip maker, expects a 10% decline in sales this year, and its Arizona factory will miss its mass production target due to a shortage of skilled workers. The company faces challenges from soft consumer demand, rising costs, and subdued chip demand in crucial markets like China. Despite the setbacks, TSMC remains optimistic about the AI business, which heavily relies on its advanced chips. Profit in the April-June quarter fell 23% compared to the previous year. The Biden administration supports the Arizona factory project to boost U.S. chip manufacturing, though the company may need to bring in technicians from Taiwan to cope with the skilled labor shortage. TSMC seeks to maximize subsidies and tax credits to offset higher U.S. operating costs.
A Battery Supply Chain that Excludes China Looks Impossible [Economist]
The heart of the electrification revolution lies in lithium-ion battery technology, and to meet the soaring global demand for these batteries, the supply of essential minerals must grow exponentially. China is the dominant player in the battery metals market, with a strong presence in mining, processing, and manufacturing finished batteries. Furthermore, Chinese firms' nimbleness and risk-taking ability have enabled them to dominate battery part production, adding to their overall stronghold in the battery industry. Western companies, on the other hand, are often slower in their preparations and studies, leading to their comparative underrepresentation in the market. Additionally, the rising costs of construction, shortages of skilled personnel, and price volatility in battery materials add further challenges to western countries decoupling from the existing battery supply chain.
A Breakdown Of Lincoln Electric [Fortune]
Lincoln Electric, a company with a unique and radical system, has managed to avoid layoffs since at least the 1950s, defying conventional business practices. This system, known as "the program," involves production employees agreeing to flexible work hours based on customer demand and getting paid based on piecework. In return, the company promises not to lay them off due to lack of business. The philosophy behind the system was formulated by James F. Lincoln, the company's former CEO, who believed in fair treatment for workers and introduced policies such as piecework pay and year-end bonuses. Despite its success, the system's implementation has limitations and cannot be applied universally in Lincoln's expanding international markets. Additionally, employees must make sacrifices for job security, accepting variable work hours during boom and bust periods. While the system has garnered admiration, few other companies have successfully replicated it. The question remains whether the program will endure in a changing world, given evolving labor markets and employee preferences. For now, Lincoln Electric's unique system continues to work remarkably well. Our portfolio company Gig and Take is currently replicating this system. Check them out!
Why America’s Largest Toolmaker Couldn’t Make a Wrench In America [WSJ]
Stanley Black & Decker invested $90 million to build a factory in Fort Worth, Texas, with the aim of bringing back the Made-in-the-U.S.A. luster to its Craftsman brand. The factory was supposed to use advanced automation to produce mechanics' tools efficiently and cost-competitively with China. However, the automated system encountered numerous problems, and the expected millions of tools were hard to find, turning some of them into collector's items. After 3½ years of struggling, Stanley announced the closure of the factory due to a combination of factors, including supply chain challenges, technology that didn't meet expectations, and the impact of COVID-19.
Stanley's attempt to "re-Americanize" the Craftsman brand, which was previously owned by Sears and had shifted production to China, faced significant challenges in automating the toolmaking process. The factory was unable to achieve the desired efficiency and yield, leading to its ultimate failure. The closure highlighted the complexities of automation in manufacturing, where the artistry and expertise of human workers remain essential in certain tasks. Despite the failure, Stanley Black & Decker continues to manufacture Craftsman tools overseas and has opened new plants in Mexico, aiming to reduce its manufacturing presence in Asia.
Research:
Industrial Software Market Update [Houlihan Lokey]
”Dry Manufacturing” for Better Batteries [Clean Technica]
Oak Ridge National Laboratory (ORNL) and Navitas Systems have partnered to develop a new dry processing method for applying lithium to electrodes in electric vehicle (EV) batteries. This approach eliminates the need for toxic solvents used in the conventional slurry-based method, potentially reducing health and environmental risks. The dry processing method is known for its space, time, and energy-saving advantages, potentially saving millions of dollars in gigascale EV battery factory costs and improved waste disposal efficiency. The current phase of the research involves analyzing dry-processed electrodes manufactured by Navitas. The dry processing method enables manufacturers to pack more active materials into the electrode, potentially enhancing loading performance. However, the thickness of the electrode might pose limitations on power, and the research team aims to develop or identify a better binder for the lithium powder to address this issue.
Podcasts/Video:
Turning Green Minerals Boom Into a Blessing [Stephanomics]
Exploring Space Manufacturing [Space Cafe Podcast]
Twitter/Reddit:
Extensive Tornado Damage to Pfizer Drug Manufacturing Facility
Robot Penetration in Manufacturing
Manufacturing Deals
Figure - An AI robotics company bringing a general purpose humanoid to life for various workplace use cases
$9 million [Series A] - Led by Intel Capital.
Leverage - A company providing automated end-to-end supply chain visibility across your purchase orders, shipments, and inventory
$7 million [Series Seed] - Led by Chicago Ventures and joined by Las Olas Venture Capital, Remarkable Ventures, Tensility, and Florida Funders
Metafold - A cloud-based 3D printing software accelerating the fabrication of ultra-complex parts
$1.78 million [Series Seed] - Led by Differential Ventures and joined by Active Impact Investments, Jetstream, and Standup Ventures.
Neura Robotics - a German company building collaborative robot assistants for the workplace
$55 million [Series C] - Co-Led by Lingotto, Vsquared Ventures, Primepulse, and HV Capital
Peaxy - a leading cloud software company providing battery lifecycle analytics and digital twins
$12 million [Series B2] - Led by Existing Investors
Thingtrax - a complete manufacturing performance solution to to improve operational excellence
£4.3 million [Series Seed] - Led by Concentric, Superseed, and Puma Private Equity and joined by a few others
Other: ProShop raised $32 million invest from Mainsail Partners.