Issue #37 - The Future of Manufacturing
Topics this time: 5 filters of digital transformation, growth of the industrial tech ecosystem, supply crunch, the best-of-breed manufacturing tech stack, and several big funding rounds.
👋 Welcome to Issue #37 👋
time is passing by quickly and this is already the second last issue of this year. I’m happy to announce that we'll share a few frameworks we have been working on that in the next issues. We think those frameworks could be helpful if you’re working on digital transformation projects. I’m also glad to see that the combined enterprise value of European industrial tech startups has grown 2.2x from last year - especially since I believe it’s still day 1.
Enjoy reading - and as always, sharing and feedback is a gift 🙏
I. Frameworks and our next course
In the past few months we have developed unique frameworks together with leading industry experts that you can use in your daily work.
👉 These frameworks are part of our next flagship course Digital Transformation in Manufacturing. The course will start again on the 31st of January 2022. You want to learn more? Click here.
One of these frameworks is what we (thanks Philipp) call “the 5 Filters for transforming your shopfloor”. Here is how it works: Digital Transformation projects have to overcome five critical stages. Think of them as "filters" or steps to be taken. Once completed, they become non-questionable, and therefore the faster you can get through them the better. Start with the first, continue with the next filter in the right order and proof them step-by-step. In a nutshell:
II. Future of Manufacturing Community
👪 Future of Manufacturing Community: Our community has crossed 200 people and we’ll keep adding new members. You’re eager to discuss with us topics such as the future of MES, sustainability in manufacturing, or the pilot purgatory? Join the waitlist here and follow us on LinkedIn to stay up-to-date.
🏭 Next Community session: we’re hosting a community event lessons learned in 2021. We’ll talk about the development of ecosystems (eg. IoT), future platforms (eg. MES), or the funding climate for industrial startups. Sign-up here, the event takes place on the 14th of Dec at 6.00pm CET.
Got a friend or colleague interested in the future of manufacturing? Help me spread the word by sharing the newsletter if you like it!
III. What I’ve enjoyed reading 👇
🏭 Industrial tech ecosystem more than doubled in value to €73.9bn
Dealroom teamed up with Speedinvest to publish the Industrial tech report. It includes a general update on the industrial tech startup and VC landscape, a look at new facets of the market, and the impact and future of Climate Tech on the sector.
Industrial tech is key to solving the climate crisis with 3.2x increase in VC investment
The combined enterprise value of European industrial tech startups has grown 2.2x from last year
US and corporate money piling on and COVID-19 as an accelerator. 56% investment came in from outside Europe and €1.8 bn out of €3.8 bn is from the US alone.
⚙️ Building a best-of-breed tech stack in manufacturing
Manufacturing operations used to choose an ERP/MRP system that was designed for their facility, and fill in gaps with Microsoft Access, Excel, or paper. These systems require a lot of maintenance, manual data entry, and usually a team of consultants to implement. ERP systems have attempted to solve these problems, only to add complexity to their systems, resulting in complex software that is difficult to use and hard to scale. This article by MachineMetrics gives a good overview of the software tech stack in manufacturing.
A new generation of manufacturing software that is easy to use, cloud-based, and more flexible for changing business needs is coming. They are more specialized with individual companies that focus on one (possibly two) specific domains within an ERP/MRP/MES with most integrating with the previous generation ERP/MRP systems. The core building best-of-breed solutions begin at the machine level. Manufacturers must deploy a solution that can autonomously capture and standardize accurate, real-time machine health and performance data across all makes and models of equipment.
🤖 Ford, GM step into the chip business
Ford on Thursday morning outlined a strategic agreement with U.S.-based semiconductor manufacturer GlobalFoundries Inc. to develop chips. GM CEO Mark Reuss said his company is working to co-develop new chips with many semiconductor partners like Qualcomm, TSMC, and others. In recent years, U.S. automakers have hired thousands of software developers and programmers. GM expects the number of semiconductors used in vehicles to double over the next few years. The moves are part of a strategy to reduce the number of varieties of chips by 95 percent.
Several of Ford’s North American plants shut down at times this year as a result of the shortages. The effects have been felt across the industry similarly, with plant shutdowns and the removal of features like heated seats in Chevy trucks, touchscreens in BMWs, and USB ports in some Teslas.
🏭 Lead times for U.S. factories lengthen due to record on supply crunch
The supply squeeze that’s hounding U.S. manufacturers and the economy is getting even tighter. The average lead time for production materials in September increased to 92 days, the highest in data back to 1987. Wait times for supplies used in maintenance, repairs, and operations, matched a record at 45 days.
For factory purchasing managers looking to upgrade or replace equipment, the average lead time swelled by 8 days to 154 days, the longest since 1989. Persistent shipping challenges, pandemic-related production interruptions in export-driven economies such as China, transportation delays, and labor-supply constraints in the U.S. continue to beleaguer manufacturers.
🚗 Cars will become more like iPhones, offer downloadable ‘a la carte’ features
Doug Field, who left Apple and became Ford’s Chief Advanced Technology in September, said “The disruption in the auto industry, driven by software, autonomy, and electrification, is going to be as big as anything that’s happened in the last century.”
Automakers are shifting to a more digital mindset and offering upgrades and updates that might require a subscription. Tesla is famous for this move. Drivers can install Full-Self Driving and other autonomous driving updates over the air. Purchasing Full-Self Driving used to cost $10,000 when buyers purchased the vehicle. Now, Tesla offers FSD through a monthly fee.
IV. About industrial Startups and Companies
🤖 Jungheinrich acquired Arculus to create the future of automation
Arculus is a technology company based in Munich that operates in the autonomous mobile robots (AMR) sector, focusing on autonomous mobile robots, modular production platforms, and software solutions for mobile automation. In acquiring Arculus, Jungheinrich has added highly innovative hardware and software solutions in the rapidly growing autonomous mobile robots sector to its existing portfolio of automation systems. Apparently, this has been one of the biggest startup acquisitions by a German Mittelstand company.
The intelligent traffic control system Arculus fleet makes it possible to operate automated guided vehicles (AGVs) from different manufacturers in a shared logistics and production environment. The standard developed allows for the quick and efficient integration of automated guided vehicles from different manufacturers into a single control system – to optimize logistics process and thus increase the degree of automation, which Jungheinrich will also benefit from in the future.
🤑 SVT Robotics raised $25M Series A led by Tiger Global
SVT Robotics provides a platform for pre-built integrations and functionality programmed by its various-automation partners. Customers select which technologies they want, and SVT designs a robotics solution using drag-and-drop tools. The solution can then be deployed on-premises or in the cloud, depending on the customers’ requirements.
Realtime Robotics, a competitor of SVT for the over $150 billion industrial automation space, raised $31.4M in June and claimed deployments of its platform increased 375% from Q4 2020 to July 2021. Current customers include “top companies” within the warehousing and manufacturing space.
🤑 Hardware design platform nTopology raises $65M
nTopology offers CAD software, designed to be used by engineers in a wide range of fields, including industrial design, aerospace, automotive, and medical. The company promises a more elegant solution than more traditional systems, specifically focused on the world of 3D printing/additive manufacturing. The latest $65M Series D was led by Tiger Global (who else).
The titular software offering allows engineers to utilize the power of the additive manufacturing process. Existing 300 clients include the likes of Ford, Lockheed Martin, and Honeywell. nTopology also recently partnered with 3D printing giant Stratasys to create FDM Assembly Fixture Generator, a software platform designed for additive manufacturing workflows.
💵 Eclipse Venture launched its first Early Growth Fund of $510M to power the industrial revolution
Eclipse Team’s North Star has been modernizing analog sectors and helping startups in the “real economy” do more than just build businesses, and change the way industry operates. The need to digitize the real economy and legacy industries is no longer an option. To double down on that Northstar, Eclipse raised its first early growth fund of $510M.
Supply chain bottlenecks are crippling the world’s economy and infrastructure is crumbling around us. The brittleness of our manufacturing system reveals the biggest opportunity in modern history. In fact, the U.S. economy operates at only 18% of its digital potential:
V. Additional funding news in short 👇
👉 Daedalus (DE): the technology company that claims to be building the world’s first autonomous and instantly reconfigurable factories, has raised $11.5M (approx €10.17M) in its Seed round from Addition. Read more
👉 Kodiak Robotics (USA): the California-based autonomous truck developer has raised $125 million in an oversubscribed series B from SIP Global Partners. Read more
👉 Rocsole (FI): the smart process imaging startup that provides process insights with tomography solutions, has secured €5M Series A from Springvset Oy. Read more
👉 FJDynamics (CHN): the robotic startup founded by DJI’s former chief scientist to make manual labor easier, has raised a $70 million Series B round. Read more
VI. Additional content and the I40 Landscape
Industry 4.0 Map - Reinventing the Factory Stack
There are now more than 500 industrial startups in the landscape. Get ready for an update around Christmas time.
👉 Do you want to learn more about these industrial startups in the map, how the landscape evolved, and future development? Learn more about it in our onlne course.