Tesla was notoriously struggling to expand production of its Model 3 sedan in 2018. So CEO Elon Musk said his company has been a few weeks away from collapse. That near-death experience helped create an entirely new company called Atomic, built around using AI to streamline the supply chain.
Co-founded by former Tesla employees Michael Rossiter and Neil Suidan, Atomic was created within DVX Ventures, a company run by former Tesla President John McNeill. Rossiter is also a partner in DVX, leading Atomic’s $3 million seed round, with Seattle-based Madrona Ventures.
“Michael and Neil experienced this pain firsthand as Tesla leaders in the supply chain. I saw the work firsthand because they worked for me,” McNeil said in an interview with TechCrunch.
Atomic plans to deploy customer and agent AI to make inventory planning faster and easier. We are already working with our pilot customers. In one case, customers were able to cut inventory levels by half while maintaining a 99% inventory rate.
That balance will free up working capital that businesses can use elsewhere and reduce risk, McNeill said.
“If you’re too tied up with stock, it can be harmful to your business. And if you don’t have the right thing when your customers are ready to buy, you’re spending a lot of time on your own.
More broadly, Atomic’s early customers have belonged to the consumer packaging products, food and drinks and apparel industries. The company claims that these customers helped reduce inventory costs by 20% to 50%.
There is a great demand for solutions like Atomic’s because there is currently so much uncertainty in the world that existing ones are not built for this kind of volatility, Suidan said in an interview.
Now, “planners lock themselves in a room for a week trying to put together different scenarios, then put them back into leadership and get questions they didn’t expect,” Suidan said. They then said, “We need to go back to these documents and spend a few days, and this is a process that is all consumed because we don’t have the tools to confidently manage uncertainty.”
Atomic’s software pulls information from the same source document, but allows inventory planners and supply chain team members to quickly simulate multiple scenarios. This usually takes several hours or days.
Rossiter and Suidan pride themselves on being able to run quickly and adaptably with their customers.
“You can’t create custom applications for every customer. You need a generalized, flexible data model. This requires a flexible data model that can be applied to everyone. “And you need to provide precise control so that planners feel genuine ownership of the plan. And they can explain it inside and out and pull all the levers of the plan.
Many Tesla employees have found their own startups, including former CTO JB Straubel (Redwood Materials) and former SVP Drew Baglino (Heron).
But the atomic is different. In addition to taking the skills they learned at Tesla and applying them to new problems, Suidan and Rositer are building their atomic around the philosophy they developed together at the automaker.
“They built an end-to-end supply chain orchestration system from scratch at Tesla,” McNeill said.
Suidan said the value of what he built with Tesla is just as much about the solution as it was changing the process.
“The way the business was planned when we started was for dozens of different teams to work in isolation, hand over these spreadsheets, try to tie them together once a week, presenting executives a summary of the plan, chasing the tail for the majority of the rest of the week, trying to find out why one part didn’t work or the other part didn’t work,” Suidan said. “Our work has led to building a system that will allow this company to flourish, drive, maintain its dynamism and maintain its ability to achieve these business goals.”
Suidan said the planning system built within Tesla has brought about “complete transformation” in daily operations. Rossiter left Tesla shortly after the Model 3 ramp up, but Suidan was stuck until 2022.
In 2023, Suidan said the two gathered their heads and asked, “How does this kind of transformation work for all businesses, all businesses?” And they set out to create an atomic within DVX.
In typical Tesla fashion, they really aim for that high. “Our vision, our ambition, is to support all businesses selling physical products,” Rossiter said.
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