The last few years have shown that our global supply chains are relatively fragile and opaque. Between Covid, labor shortages, war, and sanctions, it has been difficult to source goods both large and small. In this episode of The Understory Podcast, we dig into the complexities of our global supply chain and how these challenges can be overcome with better sourcing insights and practices. Partsimony is helping companies build sustainable and cost-effective supply chains using its intelligent sourcing and management platform.
We are joined by Rich Mokuolu, CEO of Partsimony, who explains how the industry is ripe for modernization. Partsimony uses artificial intelligence and data analytics to optimize distributed manufacturing decisions such as where and from whom to source product components. The platform allows sourcing managers to make data-driven decisions while adjusting for ever-changing environments. Tune in to learn more about how we can make our supply chains more resilient.
JJ (host of The Understory Podcast): Hello everybody, welcome to another episode of The Understory Podcast. Understory is a global community of innovators, entrepreneurs, startups, and companies focused on making our world more sustainable.
Today, we have Rich Mokuolu, the CEO of Partsimony, join our podcast and talk about what Partsimony is doing and what Rich and the team are building. Rich, thank you so much for joining our podcast today. Tell us a little bit more about your background before we dive into Partsimony.
Rich Mokuolu: Thank you. First of all, thanks for having me. My background is in mechanical engineering, and I did that in undergrad Georgia Tech and went into doing manufacturing supply chain strategy at GE while studying in the aviation business to help build jet engines. Later, I was certified and fortunate enough to be part of the executive leadership program, a GE corporate program, where I flew around the world working in different industrial businesses within manufacturing supply chain strategy.
JJ: What an amazing experience. I don't think a lot of people can say that they have helped build jet engines. Tell us more about how that experience has informed you as you lead and build Partsimony.
Rich: It's interesting. Partsimony came about from impulsive frustrations. Like most engineers, I love to tinker in my free time. I basically had a dream in senior college right before graduation, for this loading device that relates to the military space that I built based on my dream. Funnily enough, it worked, and I was able to get utility patents issued in the US and in Russia through the PCT filing process.
In my day job at GE, I was doing manufacturing supply chain strategy, so I understood the intricacies of the supply chain. It was a mix of experience seeing how large corporates do strategy and how a lot of hardware founders tend to approach the pricing strategy. There were a lot of inefficiencies, specifically, when you look at the way corporates do it. It's all about mitigating risk, rightfully so, you tend to make similar or the same decisions repeatedly. You go to the same vendors you've whitelisted for decades.
As a hardware founder, you tend to cluster pricing strategies around Amazon buying, you find a vendor or GM and have them do everything for you. The risk, obviously with that, is that you lose leverage over time, which is why the companies like GEs of the world have very robust supply chains. It's very complex. You're mitigating risks so much that you don't allow yourself room to innovate or to find those inefficiencies.
I'll give you an example that helped crystallize everything and it links to what Partsimony does. An example of this is enterprise customer A, which we've worked with, and they have been in the industry for over 100 years, a multibillion-dollar company. They're very well known, and so they said, ‘If Partsimony can save us 25% with our supply chain, it would be a slam dunk.’ For this company, they're so cost-conscious that 10% savings would be a huge win. So, 25% was a huge stretch goal, and when they used Partsimony, we saved them over 80%. They said OK, look it was a fluke, you got lucky. Let's give you this real problem that we've been trying to solve and let's see how you really do. With that, we got over 55% of cost reductions.
Now the natural question is, how do we do that? There are two levers that we pulled. The first lever we pulled was understanding the right manufacturing methods that made sense for the given product line. It turns out, they're using more expensive manufacturing methods than they needed to. The second lever is going down to tier two or tier three manufacturers within the supply chain. To take a step back when people talk about supply chain structure existed in a tiered ecosystem. Think of a Tier 1 manufacturer being a Foxconn for example. They make iPhones and do the final assembly, testing, and packaging. They can also service OEMs. Then you have your Tier 2 manufacturers that make the components that go within the product lines. In the case of an iPhone, they may make closures, or they make the actual circuit board that goes into the iPhone. Then at the Tier 3 level, go into the raw material providers. They make the aluminum or the gorilla glass that goes into the phone.
A lot of times you'd hear this phrase supply chains are very opaque. They're not very transparent, but what we've found is that statement is just a symptom but not a root cause. The root cause is within supply chain structures is that no one says no, especially when you have millions of dollars on the line. If you're a large company like Company A, in this example, and you have millions of dollars on the line, you give it to the vendor that you've whitelisted for over a decade. They never tell you no, even when they can’t do it. Instead, they are subcontracting that to someone else to a Tier 2 or Tier 3 vendor who does all the work. All you know is that your parts get delivered to you. Therefore, a lot of times people understand the intricacies of supply chains where there's a lot of opacity because of different actors in the sensors within the actual ecosystem.
JJ: Rich, that's a great example. I love that. You really point out how complex the manufacturing process is, especially for hardware products. When people think about hardware companies, they may think of the thing that they are most familiar with, but as you point out on your website the manufacturing comes in all sorts of shapes, whether that's 3D printing, whether that's machining, fabrication, injection molding, electronics, casting assemblies, and all those different elements contribute to making a product come to life. You talked about and eluded to supply chain resiliency using information and insights to help design the manufacturing process and connect that to the supply chain. Tell us more about how important it is for supply chain resilience and what is the state of play? How are companies of all shapes recognizing the importance of supply chain resilience?
Rich: That's a great question. When you think about supply chain resilience, this is something the supply chain manager is typically focused on. It's not a necessarily new concept, but what is changing is the industry itself, the landscape, the playing field if you will. To answer that properly we would have to go back a little bit in time to cover a little bit of history. If you look at supply chains and the way manufacturing ecosystems are structured - I'll use the US primarily as a key starting point - manufacturing primarily was in countries like the USA. Over time, it migrated to China, Asia, and different low-cost countries. The movement there is around how do you maximize profit and shareholder value. Going to low-cost countries solves things. You had a lot of concentration of manufacturing capacity in specific regions.
When you look at resiliency and the future, you have more distribution and fragmentation. The reason being is when you look at sustainability, for example, reducing carbon footprints, or you look at the risk of pandemics, you need to have a more distributed network to basically deal with that. I'll use the pandemic as one of the examples. What's interesting about the pandemic? If COVID had started in any other country, in Kenya for example, it would not have crippled the world the way it did. When you look at what happened with COVID, China has really taken a huge major role in terms of manufacturing capacity, so when we needed things like ventilator components, China was offline. In this scenario, we needed ventilators but, we couldn't really manufacture ventilators because some of the components were at tier two or tier two manufacturers in China. Where Partsimony came in is identifying alternative manufacturing methods and manufacturers that could be use locally within your ecosystem to manufacture ventilators faster. That's where we were able to help out.
The key to resilience in the future is not going to be around a specific region, is not even only going to be about only local. It's going to be about how do you mix your supply chain decision-making around a hybrid of local and international global supply chains. With that, you have an increase in complexity. Where Partsimony comes in is we use machine learning to reduce the cognitive load of that complexity so experts can focus on that last 20% that matters. We use reinforcement learning to make that decision faster over time.
JJ: You just answered my next question, which is, how does Partsimony help with this particular problem? One of the things that you point out, which is interesting, is that when people think about supply chain resilience, I think some people only focus on the source or the sourcing aspect. It's the sourcing, where your suppliers are and where your manufacturing capabilities reside, but also, as you pointed out, it's the process. It's how do you manufacture and the design process. It's interesting to learn that the cognitive manufacturing supply chain is taking different kinds of data from your clients and helping them understand where they can do things a different way, from a manufacturing design process perspective. Then, you also help them with constructing a better, more resilient supply chain with different vendors and so forth.
Rich: Exactly, our whole thesis is that the future, this new paradigm that we're in, is all about uncertainty. That's the only certainty we have is uncertainty. I would never have imagined I'd be witnessing countries go to war again in my lifetime at least, but that is the case today. For supply chain managers, you need an edge to be able to quickly adapt to that uncertainty. Now, it's not reasonable to put so much pressure on supply chain management experts to manage all this uncertainty in real-time, it's not humanly possible. Where Partsimony comes in, is basically leveraging data and a network to provide that edge to the supply chain manager to effectively adapt to changing landscapes and a data-driven decision. You're making more major decisions that yield better outcomes over time.
JJ: That's great. In terms of the company, where are you guys based? I know you have some big-name clients, maybe share that with the audience as well.
Rich: We're a fully distributed team. Our core of my twin brother and co-founder, Roland and I, are based in New York City. We have a fully distributed team with team members in Canada, Dubai, Kenya, Virginia, Poland, and Nigeria as well. In terms of customers, we're still in the early days, but some of our big customer names would be Stanley Black and Decker, Launcher, and a few other corporates. Our biggest customer base, and who we resonate with the most are building really complex product lines that have to do with some level mechanical assemblies. For example, in America, electronics and mechanical assemblies like automotive, aerospace, and robotics.
JJ: That's great. I love the history, the founding story, and where you are. You guys are building some really cool stuff here.
Tell us, as the last question, where can people find you if they want to learn more about your company, work for your company, learn more about the solution, and get a demo, that sort of thing.
Rich: Absolutely, people can find us at our website its partsimony.com.
JJ: Great! Rich, we hope to talk to you again as you continue to build out your company and thank you so much for being on The Understory Podcast and this particular episode. Rich Mokuolu, the CEO of Partsimony.
Rich: Thank you so much for having me.