Breaking the Bottleneck | Issue 53
[7/1/2024] VW & Rivian, Nvidia's SyncTwin, Persona AI & Industrial Software Market Update
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, manufacturing market maps, and a startup database!
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News:
Why Aftermarket And Service Are Vital to OEMs [McKinsey]
According to a McKinsey report, the aftermarket and service sector for OEMs holds immense potential and importance. This segment can generate margins up to four times higher than those from new unit sales. Companies that excel in the aftermarket arena have witnessed double the total shareholder returns over 15 years compared to those that do not prioritize service. For instance, in the construction equipment industry, 65% of revenue comes from aftermarket and service, while aircraft engines and mining equipment see 55%, and HVAC systems account for 50%. The potential impact of a successful aftermarket strategy is substantial. Service sales can increase by up to 40% in just a few years, and implementing digital tools and data can boost revenues by 30%. However, there are significant challenges to overcome. Around 60% of aerospace and defense companies struggle to identify their target customers, 40% face issues in establishing a dedicated commercial focus, and 34% find it difficult to develop compelling service offerings and secure competitive lead times.
To succeed, companies must align their aftermarket strategy with the complexity of their products and the needs of their customers. Tailoring services to specific customer requirements is deemed critical by 66% of companies. Utilizing data analytics for predictive maintenance and optimizing operations, exploring "servitization" (offering products as services), and implementing digital tools like AI for lead generation, pricing, and customer service are also recommended strategies. Building ecosystems around products to provide integrated experiences is another key approach. From an organizational standpoint, companies must choose between fully integrated, hybrid, or separated service business unit structures, and decide on a centralized versus regional service function organization. Looking ahead, the report highlights several future trends: offering B2C-like personalized experiences in B2B, leveraging data for predictive maintenance and new revenue streams, the "softwarization" of traditionally hardware-tied features, focusing on sustainability in aftermarket offerings, and increased use of online marketplaces and digital platforms.
Rivian’s Lifeline Is a $5 Billion Gamble for Volkswagen [WSJ]
Rivian and Volkswagen have entered a strategic partnership where Rivian gains much-needed cash infusion, while Volkswagen aims to bolster its electric vehicle (EV) capabilities. Rivian, known for its well-reviewed EVs, struggles financially, prompting Volkswagen to inject $5 billion into Rivian and a joint venture (JV) focused on EV electrical architecture. This move is intended to combine Rivian's innovative vehicles with Volkswagen's scale manufacturing expertise and address Volkswagen's software challenges. The success of their collaboration hinges on effective integration in a JV where neither company holds full control, aiming to enhance EV capabilities and financial stability for Rivian.
SyncTwin Helps Democratize Industrial Digital Twins [Nvidia Blog]
SyncTwin GmbH has developed a groundbreaking digital twin app tailored for manufacturing and industrial sectors, leveraging NVIDIA's cuOpt and Omniverse technologies. The app utilizes cuOpt, an accelerated optimization engine, and Omniverse,facilitating seamless collaboration among factory plant managers and teams, consolidating various manufacturing aspects into cohesive digital twins. This includes integrating visual data, production details, product catalogs, orders, schedules, resources, and production settings into unified virtual environments. Notably, OpenUSD enables non-destructive editing and composition of complex 3D assets and animations, further enhancing the fidelity of digital twins. Michael Wagner, cofounder and chief technology officer of SyncTwin, highlights OpenUSD as a transformative tool that bridges diverse factory domains into a single digital twin, thus enhancing collaborative efficiency across assembly, logistics, and infrastructure planning. Wagner emphasizes the app's ability to aggregate diverse data sources, such as Microsoft PowerPoint floorplans and Excel spreadsheet warehouse container data, into unified digital twin scenarios reducing reliance on manual inputs and further optimizing factory planning and operations.
Materialise and nTop Collaborate To Accelerate DFM Process [Metal AM]
Materialise and nTop have collaborated to integrate nTop Core, nTop's implicit modelling API, with Materialise's Magics 3D Print Suite and NxG Build Processor. This partnership aims to streamline the design-to-manufacturing process, enabling the production of complex parts previously challenging to manufacture. A notable success includes the creation of a high-performance additively manufactured cylinder head for Wärtsilä, achieving a 60% weight reduction and improved cooling. The integration addresses a common issue by allowing seamless exchange of implicit design files between teams without meshing or intermediate processes. nTop's new implicit modelling kernel and file format support intricate, high-performance geometries efficiently, surpassing traditional CAD or mesh-based files in size and complexity. Materialise's NxG Build Processor then translates these designs into manufacturable instructions for additive manufacturing.
Persona AI Brings Calm to the Hectic Humanoid Industry [IEEE Spectrum]
Persona AI, founded by Nic Radford and Jerry Pratt, aims to revolutionize humanoid robotics despite the challenges. Radford, known for leading NASA’s Valkyrie project and founding Houston Mechatronics, and Pratt, with two decades of walking robot expertise, see a pivotal opportunity despite past reservations about commercializing humanoids. Radford emphasized their timing: "We’re finally going to explore it, although we know better than anyone that robots are really hard. They’re not that hard to build; but they’re hard to make useful and make money with." Their venture, Persona AI, seeks to capitalize on recent advancements in perception technology and increasing industry demand for robotic solutions across sectors like warehousing and logistics. The co-founders acknowledge the competitive landscape but remain optimistic: "There’s going to be multiple winners here," Radford noted, referring to the burgeoning market for humanoid robots. Looking forward, ongoing challenges exist such as developing reliable hands and efficient batteries, critical for robot durability and usability. Persona AI plans to build a diverse team to tackle these issues while striving for early partnerships and customer engagements to validate their approach.
Research:
Industrial Software Market Update [Houlihan Lokey]
Podcasts/Video:
The Entrepreneurs That Opened the Chinese Market [Odd Lots]
Manufacturing Deals🏭💵
Formic - A company developing a robots-as-a-service platform for manufacturers
$24.7 million [Series A] - Led by Blackhorn Ventures led, and joined by Mitsubishi HC Capital America, NEC, Translink Capital, Alumni Ventures, FJ Labs, Lux Capital, Initialized Capital, and Lorimer Ventures
Bright Machines - A company developing a robots-as-a-service platform for manufacturers
$106 million [Series C] - From BlackRock, Nvidia, Microsoft, Eclipse Ventures
Sift - A company developing unified observability solutions for complex machine development
$17.5 million [Series A] - Led by GV
Zyod - A indian company developing a platform for clothing manufacturing
$18 million [Series A] - Led by RTP Global and oined by Lightspeed, Alteria Capital, Stride Ventures, Stride One, and Trifecta Capital
Planned Downtime 🏭🧑🔧
Simone Biles is Back