Bright Machines and Software-Defined Manufacturing
“Why software is eating the world” was the title of a famed blog post published in 2011 by venture capitalist Marc Andreessen which addressed concerns in the investment community of another tech bubble. He argued that “new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity.” Since that piece was published nearly ten years ago, the Nasdaq returned +284%, and software has all but dominated thanks to the proliferation of big data and machine learning algorithms that know what to do with it.
It’s incredibly difficult to build good software which is why senior talent in areas like software product management are such valuable resources. As a senior product manager, building low-defect software to specification just isn’t enough. You need to build what your customers want and need. You also need to anticipate emerging needs as well and prioritize everything accordingly. A startup called Bright Machines believes they can build software that is just what the $3 trillion-plus manufacturing industry needs.
Software Eats Manufacturing
Founded in 2018, San Francisco startup Bright Machines has taken in nearly $200 million in funding so far to develop a new paradigm – Software-Defined Manufacturing. They’re melding robotics with computer vision and machine learning to build modular microfactories for assembly automation that are sold using the “as-a-service” business model.
“If you’re like me, you probably get fatigued by tech company jargon,” says co-founder and CEO of Bright Machines, Amar Hanspal, who previously worked at Autodesk as their co-CEO and chief product officer. In that capacity, Mr. Hanspal was responsible for moving Autodesk’s software products into the cloud where they could be accessed by more than 12 million customers. Last year he authored a blog post which talks about how Software-Defined Manufacturing (SDM) isn’t just another acronym.
For the past 30 years, manufacturing automation has been all about the hardware. Industrial automation companies develop sophisticated pieces of hardware to accomplish a particular task. SDA is all about moving that complexity from the hardware into the software. It’s also about data. When every part of the manufacturing process is controlled by software, it’s very easy to figure out how defects are happening and how to prevent them. It’s also much easier to make processes more efficient.
Production equipment becomes capable of flexibility and repeatability, not just for one product lifecycle but for years of evolving product strategy and innovation. Applications can be built on a software stack for things like managing quality, traceability, and configuration.
Working alongside Mr. Hanspal is co-founder and Chief Operating Officer of Bright Machines, Tzahi Rodrig, who previously worked as president of worldwide manufacturing operations at Flex, where he was responsible for more than 150,000 employees, 100 sites and $20 billion in revenue. It’s no surprise that Flex – one of the world’s largest manufacturing companies – was Bright Machines’ first client. (Flex is also an investor as well.)
Bright Machines can deploy their microfactories in half the time it takes to do a traditional automation deployment. Out-of-the-box capabilities include things like screwdriving, soldering, applying labels, and pick & place part assembly.
Bright Machines Success Stories
According to an article by Business Insider, just one year after being founded, Bright Machines had booked $100 million in revenue with customers in automotive, consumer, and electronics companies. When you’re selling a product or service that saves companies money, it becomes an easy sell. Bright Machines has published numerous case studies on their deployed microfactories which show the benefit of software-defined manufacturing in hard numbers.
- A global leader in single cup coffee makers was having problems with labor shortages and product quality. After deploying a microfactory for a particularly problematic process, they increased yield from 60% to 98%. Additionally, they realized a 50% increase in units produced per hour and a 90% reduction in human operators required.
- A manufacturer producing control panels for building security systems had difficulties maintaining their goal of 630,000 control panels per year. After deploying a microfactory, they increased production by 71% over the former eight-person crew, leading to an output of 1.1 million units per year with a 34% savings over the human-run lines.
- A top automotive manufacturer deployed a microfactory to help assemble infotainment centers. Unit production increased 33% per hour alongside a 50% reduction in assembly-line staff. The new microfactory required only 25% of the human touches and defect rates reduced by 88%.
Imagine being able to increase output and reduce costs at the same time. It’s also about the whole “continuous improvement” mantra you always hear being thrown around the factory floor. Each Bright Machines microfactory produces a wealth of data that can then be ingested by hungry machine learning algorithms which will continuously improve over time. It’s easy to see how intelligent software will be the foundation of any smart factory.
What About Cobots?
Since we happen to be holding shares in Teradyne, we’re also curious to know how Bright Machines will impact the broader industry of collaborative robots (cobots) and industrial automation. What’s the point of having robots “collaborate” with human operators when you can just remove the human element entirely?
One thing we couldn’t figure out was which robotic arms are being used for the Bright Machines solution. When their customers start demanding these microfactories in the thousands, whoever makes these robotic arms will benefit. Given their goal of keeping the hardware simple, it seems likely that they’re able to use any type of robotic arm, but they’re probably using one developed in-house so they can control the supply chain. Hopefully, there’s still a niche for cobots, and Teradyne’s transition towards industrial robotics will continue its growth trajectory.
Last week, CB Insights published their list of 50 future unicorns and Bright Machines is one of them. Given how experienced the leadership team is, we can safely assume they signed up for the long haul as opposed to looking for a quick exit. They’re likely to go far beyond just achieving unicorn status as they work fast to disrupt an industry worth trillions of dollars.
This little-known grocery technology company is deploying retail robotics technology to help companies like Kroger compete with Amazon. So we bought the stock. Become a Nanalyze Premium annual member today to see the ~35 holdings in our tech stock portfolio.