Episode 200 - Niche Manufacturing in the AV Market & Beyond

Grayson Brulte:

Hello, I'm your host, Grayson Brulte. Welcome to another episode of SAE Tomorrow Today, a show about emerging technology and trends and mobility with the leaders and innovators to make it all happen. On today's episode, we're absolutely honored to be joined by Brandon Bartneck Vice President and General Manager, Edison Manufacturing.

On today's episode, we'll discuss the role of contract manufacturing and the autonomous vehicles market. We hope you enjoy this episode.

Brandon, welcome to the podcast.

Brandon Bartneck:

Thanks, it's great to be here. 

Grayson Brulte:

It's great to have you here because low volume manufacturing is going to play critical role in the future of mobility and especially autonomy as we try new form factors before we get into all things manufacturing, Brandon, what are your thoughts on the current state of mobility? And what role do you see Edison Manufacturing playing in that market? 

Brandon Bartneck:

So the current state of mobility, huge question there. And one of, I'll talk about things that I'm confident. And so one is, I don't know what the future looks like, and I'm fairly confident that no one does. I'm not a futurist. I don't think anyone can really predict what the future looks like.

But with that said, there are key trends, electrification, autonomy, connectivity, digitalization, things like that, that are moving. And one of the most important things I believe is that we can't have conversations around these topics in general terms and actually have talk about much that's meaningful.

You're like, even within the autonomy space, for example, you can't say what's the state of the autonomous. market, we can say, what does autonomous trucking look like? What does last mile delivery look like? What does middle mile logistics look like? These types of things. So long way of saying, there's a lot that's going on in a complex industry where there's pockets that are moving in different areas and no one really knows what the future is looking like with that said Edison.

We're Edison Manufacturing and Engineering. We're a niche contract manufacturer. We do low volume assembly for mobility related products, typically involving electrification and autonomy. 

Grayson Brulte:

So you, we have a lot to unpack there. Electrification was a hot topic and it's starting to become less than so a hot topic. We have the news out of the UK. Toyota is now investing in hybrid plants. Two new plants to create jobs. The Prime Minister of the UK said yes. You have Larry Fink who won't dare mention the word ESG.

You have hedge funds that are selling out of anything ESG, anything sustainability. And now it seems like we're moving to practicality of the COP28 where Saudis said no, we're still going to use fuels.

Does that impact where we're, if you want to call it, we're going back in time, we're going back to the Prius days, or I used to call it the Leo mobile because when Leonardo DiCaprio took it to the Oscars, that became the car. Does hybrid have their resurgent moment coming? Cause the way that the market is shifting back towards hybrid. And if so, what impact does that have on Edison? Will you start developing for hybrid or perhaps plug in hybrid? 

Brandon Bartneck:

Yeah, I think so. And it's something that. I believe is a good fit. I believe electrification, battery electric vehicles, hydrogen fuel cell electric vehicles have tremendous value to bring to the industry.
I also believe that there is so much uncertainty here across multiple dimensions. If you're in looking at infrastructure, the vehicle technology is good already, but getting better materials, regulations, geographical differences. And back to what I the general theme of what I mentioned the beginning is uncertainty is the thing that I'm most confident in, and in an uncertain future, picking a single solution and putting all your eggs in one basket is not a good solution.

Typically, you should mitigate risk by waiting and to try to advance multiple solutions, and then be able to deploy those when and where it makes sense. And yes, it seems like hybridization is having a bit of a resurgence. I think that's a good thing. I don't think those are mutually exclusive, having hybrids and plug in hybrids of battery electric vehicles.

And ultimately, we're for as Edison, we're here to serve the needs. And we, the reason we, and we'll get likely get more into this, but the reason this need and the niche that we're serving exists is because of the uncertainty in the industry. And because of the fact that there are. Low volume dynamic applications throughout the mobility sector that are not well served by the traditional approach to production.

And so whether it's hybridization, better electric hydrogen, fuel cells, autonomous driving, whatever we're here to be a good partner. 

Grayson Brulte:

We like good partners, State Farm is here for you. So you can say Edison is. He's here with Jake from State Farm. He doesn't like autonomous vehicles. You can see what they did to us in South Dakota.

We'd often forgotten that. So you look at where the market's going. Obviously, it's going to electrification. There are different forms of electrification, as you alluded to. A trend that's starting to emerge now is not mainstream, but it's emerging in engineering circles is electrified trailers for Class 8s of how do you reduce the consumption of diesel? Obviously, the trailers have to be built.

They have to be modified. Is that something where a market that Edison potentially get in to start electrifying the trailers, because you do low volume contract manufacturing, let's just say you have a client, let's call them Acme truck or Acme trailer, for example, says, Hey, Brandon, we want to try a hundred of these, but we don't want to commit to a multi hundred thousand dollar order.

We want to try. Is that the niche that you fit in from? I don't want to call it the early days of experimenting. 

Brandon Bartneck:

Yes. Something like that is a great application. We do have discussions going on in the class eight electrification trailer space, as well as. various other forms of electrified trailers. And yeah, I think something that, that does tend to be a good use case.

Ultimately, it's a place where there's a value on flexible, capital efficient, yet robust manufacturing really that intersection is where we serve whatever industry it is. 

Grayson Brulte:

From a robust standpoint, is that the ability to deliver the product ability to deliver a great product? Is that the engineering know how? How do you define what robust is? 

Brandon Bartneck:

Yeah, so I'm really talking about manufacturing quality and it's across three dimensions you have delivery traditional quality and you have cost and the ability to execute in a repeatable Reliable fashion one of the things that's interesting, right? So like Class 8 trailer work, for example, there's an industry that served this market as including the tractor side of it as an outfitter for a long time.

But the type of outfits that we're talking about right now are fundamentally different than placards and drilling holes and some of the things that have existed in this space. And it also when you look at the cost and the risk. Whether it's electrifying trailer or adding autonomy to the bill of material costs are very significant.

The risks are significant, and you need to have an approach to manufacturing here that threads the needle between traditional automotive level quality and the needs of a given product. So you're not. This is no longer job shop type work where it's all about efficiency and kind of just get the job.

Like you need robust quality management systems in place. And so when I talk about reliable and in a robust matter, that's what I'm talking about. The ability to tightly control quality to the standard that's required for the product. 

Grayson Brulte:

When a company that comes to Edison and says, we want to do an Electrify trailer, we want to do. A, say, bespoke prototype vehicle, it might be a shuttle or a low speed shuttle, they just send over the CAD drawings and say, okay, put the Edison quality stamp on this, or do they move engineers into your facilities to start that development process or what does that look like? 

Brandon Bartneck:

So a lot of different flavors. Ultimately, we tend to, so we build things, but fundamental, we support that with manufacturing process development, production engineering, as well as supply chain management and execution. And often, yeah, it looks like you have. A CAD model of some sort, maybe it's a concept, maybe there's a prototype proof concept, maybe there's a small fleet that's been built, but yet you have a CAD model and a build material, some type of timing, some type of volume estimates, and they come to us and they say, Okay, how would you build this thing?

And can we build this thing? And so ultimately, what we do is we work with these companies, some of them Which are not historically manufacturing companies that don't necessarily have the in-house manufacturing, we'll develop a manufacturing strategy and a scalable approach to go from wherever they are, whether it's early in that phase of the concept.

And so building 1 of 2, 1 or 2 of something into 5 and a couple dozen, then 50, then a hundred, then a thousand, wherever you go, and we'll do that, develop a strategy that makes sense for the product, given the level of uncertainty in different areas. So back to this. That's the theme that I've brought up a few times here.

Now like the approach that you should take for building something like an electrified trailer or anything that we build is very different if you have firm demand and a firm ramp curve of on these dates I'm going to hit these production milestones versus. If you realize, which is the situation in most of these cases, that there's layers of variability on all dimensions here, on volumes, on when different build stages, there's going to be build stops, there's going to be potentially supply chain issues.

And so what we do is we coach and we work alongside our partners to develop them and then execute on a manufacturing approach that makes sense for their product and their situation. 

Grayson Brulte:

Do you view Edison as your version of AWS or Google Cloud Compute or Microsoft Azure? Is that who Edison truly is? You're that accelerator because if you're building a startup you need your compute power and you're going to go to one of the three major providers to get that compute power. When you're talking about automotive or heavy duty off road, you need a manufacturer. So do you view yourself as that cloud component to help that acceleration?

Brandon Bartneck:

I hadn't thought in those terms, but Yeah, ultimately, yeah, we're an enabler, someone who needs manufacturing support. We can come on, coach and deliver for them. 

Grayson Brulte:

How early do you come in the processes that when they raise the seed round, they raise the series A. They're actually going to pay the bills or where does Edison come in that process?

Because a lot of these smaller companies, smaller startups don't necessarily, they don't have the manufacturing expertise. They don't have the bank to go and build a warehouse and buy all the equipment, which you know from experience is a large CapEx expense. Where do you come into that process?

Brandon Bartneck:

That's somewhat complex as well. From an actual delivery perspective, until people are building products, then there isn't anything for us to build, right? But we're often involved significantly sooner than that. Sometimes actually precede. We have several things here going on right now. And which will work with because investors are going to ask the question of, how are you going to build this thing?

And so if we can come alongside and say here's how you might think about building this, here's what it looks like, here's what it's going to take from a tooling, fixtures, equipment facility perspective, here's based on the concept that you have right now. And this is often a design that's relatively early phase, but based on the concept you have, here's how you might assemble it, the sequences, the tack times for these.

And that information can be very valuable for someone who's trying to communicate with investors and trying to set things together. We also, besides that fundraising aspect, there's a lot that you can screw up early in, in the design process, right? And especially if you're a, if you think of yourself as a software company or you come from software perspective and you think that manufacturing is a bolt on that you put on at the end, that's not usually a good recipe.

And the thing that we often will come in and do is help from a design perspective. So offer DFM, DFA, design for manufacturing, design for assembly feedback to say have you thought about the way you're putting this together and access and fastener types? And fastener heads and things like that also supply chain decisions.

And like most, it seems like most people think about supply chain later than they probably should. Whereas like getting the right partners and the right types of partners on board soon is something that's, it's very important if you're going to have success. And so what will help even while the product's being developed with these types of aspects and kind of the, this is the coaching aspect that I mentioned.

Grayson Brulte:

How do they find you then? Is it just real, is it real relationships? Is it through investors and say, Hey, if I'm going to put half a million dollars into you, you have to call Edison because I trust their quality of the product that they're going to deliver or how are these startups, these pre seeds, how are they finding you?

Brandon Bartneck:

Yeah, I'd say there's a few sources. One is that exactly that. There are a few things that have come from investors and people who have. Talking to people was like you should talk to Edison early on and a little bit invested now is a big risk mitigation tool for the future. Some of it now that we've worked with more companies as people are moving throughout the industry, you do good work for one person.

They'd like to have you come back and that's been a good source for us. And then besides that, yeah, it's no net networks. And I know some people in the industry, we have others on our team. We spun out and maybe I could talk more at some point on, we spun out of a transmission component supplier of sorts PJ wall bank Springs with its own network and resources and such. And so there's several different places where people are coming from. 

Grayson Brulte:

Were you there during that spinout process? 

Brandon Bartneck:

I was not. So that took place in late 2020 when the company Edison. And Edison started and I joined a little after that. 

Grayson Brulte:

Because what you do from the spin out you have the heritage because then that, and that goes a long way, especially in this market as you're, so you have, let's say your traditional business with your more and more established, funded companies, they're coming to you for low scale manufacturing.

You have what I focus on the startups, the newer mobility companies. The putting those together, Edison's growing, it's scaling as Edison grows. How do you maintain the quality of your product? The quality of your products that you're delivering to the market where you're not diluting it as you're scaling?

Brandon Bartneck:

Yeah, and a few things. I'd say so one quick note. Startups is a great fit, and we provide a lot of value to companies that are going through that transition of bringing a new product to market and growing also, though, established companies, OEMs, as well as suppliers. Who are launching new types of products or products into new markets that are lower value than they typically are used to.

They're different in that you have an existing infrastructure, but that infrastructure is not built to serve the type of product that we're talking about here. So the issues end up being pretty similar and we're offering like, yeah, from OEM to supply large supplier offering some similar services there.

But this question of how do you control quality as you scale? That's one of the reasons why I'm grateful. So PJ Wallbank Springs has been around for, since 1982, so for 41 years. Spring assembly company primarily for automotive and automotive adjacent applications for historically clutch returns and automatic transmissions, although there's several other applications and growing kind of markets that PJ Wallbank is serving.

But 1 of the great things is that company has gone through significant growth over the last 7 years or so, tripling in size over a 3-year period and continuing to. To grow and expand and they've gone through several of these same things, right? So building a spring pack for a clutch return. A little different than assembling an autonomous vehicle or building an electrified trailer, right?

But there's a lot of this, there's a lot of similarities there from a kind of fundamental foundational level of how you build and deploy quality management systems, how you execute from a manufacturing perspective, how you manage your supply chain and your material planning and your material logistics and all of that.

And so there isn't a clean solution for how do you do this and scale and maintain quality? The closest I can get is like just do all the small things right and have enough experience and judgment around you to help identify the roadblocks that are coming before they become issues and go from there.

Grayson Brulte:

Do you feel it's in Edison's DNA from being spun out like the quality is in the DNA where the employees buy into the to the quality process where your fellow colleagues are not taking corners because they believe in the heritage of what PJ has built? 

Brandon Bartneck:

Yeah, I do. And ultimately, one of the interesting things to it, and I'm sure you've heard things like this in a lot of different perspectives, both PJ Wallbank Springs and Edison are, it's a deeply values and people and impact focus organization.

So the reason Edison spun out in 2020. in part. So Chris Wallbank took over from his father about a decade ago. PJ Wallbank Springs is family privately owned business. You can guess there's a growth and diversification play as the traditional markets evolving that has been served there, but also, I think most importantly, it's built around how can we impact people?

And yes, there's the grandiose, like how can our product that we build make an impact on our end customers? Even more fundamental, it's how can we make a positive impact on our employees, our customers, our community, our suppliers, and things like that. So that's, the how and why was really the seed that was baked around this.

And then we've built out, found this market to serve and are serving it well and are growing and are doing, I think, a lot of good things. Because of this deep focus on what we're doing and also a lot more focus than I've ever seen on how you actually operationalize that focus on vision and values.

Yeah, there's a quality culture, but there's also people are here because they want to do good work and they want to do hard things and they want to serve You can work somewhere else if you want to cut corners and right that so I think it is baked into the DNA from a couple perspectives. 

Grayson Brulte:

You have the heritage, you have the quality built into your DNA your focus on a variety of markets. Looking at markets, do you view autonomy as a growth market for Edison? 

Brandon Bartneck:

Yeah, and ultimately to autonomy I think across maybe not across the board because the robo taxi space is maybe a little different, but several of the core applications. So you had a great episode recently, on the autonomous trucking revolution that's coming, right?

And I agree with that. I think the autonomous trucking is closer. There's, the technology is very good. We're finding the fit now for business case and getting safety cases ironed out. And now it's a, it becomes a scaling discussion. And there's a few other. Adjacent type, shuttles closed campus, autonomy, yard truck, logistic, and even once if you get into warehouses, things like autonomous forklifts and aspects of AMRs and AGVs, several of these applications are in a position that over the next few years.

They're going to grow and the manufacturing approach for these markets tends to be a great fit for the things that we focus on, which is that flexible, capital efficient, and yet robust quality perspective. And that, yes, I'm confident they're going to scale in the next few years. I don't know if it's 12 months from now or 18 or six or 24 months.

And then also, I don't know exactly how big those volumes are going to be. And so if you can take a capital efficient approach and build good quality. Quality products reliably be in position to scale, then you can serve the market. And we're showing that so far and we're supporting multiple customers currently as we speak in late 2023 doing this. And I think there's just, there's more on the radar.

Grayson Brulte: 

Are there any limitations? And so you mentioned, oh, so you have the Thomas forklifts and warehouses. You have the bots that run the run around warehouses. You have class eight autonomous trucks that are. Very big and you have shuttles and to some degree you have robotech. So different sizes, shapes, weights, form factors are little limitations where Edison can go from a size and form factor and weight perspective. 

Brandon Bartneck:

I don't think that's necessarily the core driving thing that will, there are limitations on the business and things that we focus on, but it's less about the form factor and it's more about the complexity of the product and the existing solutions.

For example, certain types of AGVs have been built for a long time, and there's good applications, and it's just a iteration, and there's already people who are doing that really well, so there isn't probably a need for us to serve if it's just a modification on an existing design.

There are different approaches and things that are being produced still in different robotics applications where It's fundamentally different than the traditional manufacturing approach. And that's where we offer a lot of value, but the really, as long as the customer and the market that they're serving values is flexibility and capital efficiency.

And there's sufficient complexity to have a need for the robust quality approach that we take, then it tends to be a good fit. 

Grayson Brulte:

You mentioned capital efficiency there. Is that one of the key reasons why a company will choose that you become an OpEx expense, you eliminate the CapEx expense. Is that one of the reasons why a company would choose to work with Edison?

Brandon Bartneck:

Yeah. And in a quick example here, so there's a this is more from the traditional or established company perspective, but there's a. large automotive OEM launching a new product that does not look like what they typically build. And it was literally like 12 percent of the internal costs that we had, that they had gotten from their own facility was what it was going to cost us because this product just was not well suited at the volumes for a highly automated approach, but their internal manufacturing site only had one approach that they could apply to building it.

And we were. significantly more capital efficient and cost effective for the initial run to build. And I think that's, it's one of the things, right? So when you're ultimately, when you look at how you're going to manufacture and whether you're going to build some, say you're a startup again, and you're thinking about, are you going to set up your own manufacturing operations or are you going to leverage a contract manufacturer?

And if a contract manufacturer, are you going to use? The existing established that there are some large players in the contract manufacturing space that have served for a long time and have a given market or is there an opportunity for someone like Edison to come in at it with a more capital efficient and more agile approach.

And I think there are certainly opportunities and in a lot of markets where it makes sense to try to limit that upfront capital. And we can serve, so we leverage the systems, the people, the processes, and things that we put in place, even the facility that we put in place. And we're able to do that in an efficient way that generally makes it more cost effective for our customers.

Grayson Brulte:

For the OEM, it's a lot more cost effective for that OEM. Let's say, let's just call me Acme OEM for brand wise. So I'm Acme OEM and I approach OK Brand and we're doing a, call it a Star Wars, Star Trek, out there vehicle type, we've never built before. No pedals, no steering wheel, we only need to say start with 10 because we want to test them.

You can do that, but then what happens, say okay, now I want to go up to I want to go to 100. I want to go to 200. Can you go through that whole journey with that OEM or with that startup from the prototyping phase to the actual, it's called deployment phase? 

Brandon Bartneck:

Yeah, and there tends to be at some point a top end limit. It depends on the product. If it's a smaller component or system, it could be tens of thousands or 50,000 or something. If it's a vehicle, it's usually low thousands or mid thousands per year at which it makes sense to. Invest in a more capital and not that we're opposed to doing that, especially if there's a long enough time frame, a few years from now we can be building at higher volumes and can do it effectively as we sit here today. Yes, we can go from.

One or two something to dozens, to hundreds, to low thousands and take a staged approach alongside our customer and be a good partner for them. 

Grayson Brulte:

What do you have to do on day one when you sign the agreement, you roll your sleeves and say, okay, this is off to the races, to avoid the potential pitfalls that might come from this?

Because you've obviously have, since 1982, you've learned a lot of lessons. Forty years, 41 January 1st, we're going 41 years. So you've learned a lot. So how do you avoid those pitfalls when you're sitting down there? Okay, the ink is dry. We're getting ready to go How do you avoid those pitfalls?

Brandon Bartneck: 

Several aspects here. I'll maybe I'll highlight two for now. And so one is the be transparent like have a legitimate transparent discussion, which is tough and it's easy to say But like it's really important here that we have a clear Communication, transparent discussion with our relationship with our customer and that we understand and are both up front about what this ramp is going to look like and the points of uncertainty, because if you again back to what I've mentioned a few times, but if you know that you're going to reliably go from 1 to 10 to 52, 500 to 5, 000, you'll take a very different approach than if you have gates that you're taking and there's uncertainty at each of those levels and products could evolve and maybe there's a, maybe you stop at 200 instead of 5, 000, like you, you're going to invest differently and you're going to establish a manufacturing system that's different if there's more variability in the system.

The other thing is, understand that I mentioned supply chain already. If you haven't been in the manufacturing world and you haven't lived this firsthand, it's hard to appreciate how big of a killer this can be. You can, if you've done work yeah, you have a part that isn't quite right, you can fix it. You can muster your way something. You have a process that's ineffective. You work nights, you work weekends, you figure it out and you're fine. Any component in a build has the opportunity to present a build stop and just completely shut you down. And so you need to understand that each item, even as something as small as a bolt or a simple fastener can completely stop your operation and make decisions based on that.

And so you need to, again, have systems in place, your ERP system, the way in which you're managing your demand and your execution towards that demand, and you're tracking. And decisions you're making about your inventory safety stock and things like that all need to be in line and also the suppliers that you choose.

I think one of the, one of the pitfalls that we see often is going for a marginally cheaper supplier who maybe they're overseas, maybe they're taking some other approach, but unnecessarily exposing yourself to timing and delivery risk. Which one issue on that side is going to so far outweigh whatever marginal component benefit that you had on a cost basis that like just being, yeah. Being Pennywise and pound foolish is something that we see repeatedly. 

Grayson Brulte:

 I'm trying to use a nice word here. I was gonna use a bad word, but this is a G-rated show. There, there was a lot of idiots when it came to the supply chain during the pandemic that it was the hurry up and pray, hurry up and wait.

There was no actual planning that went into the supply chain. Do you spend a lot of time with what's called customer A, B, C, trying to understand the nuances around a supply chain, around the quality of a product? Because you, we saw what happened in the Suez Canal. Ship got stuck. We're seeing what's happening now in the Middle East with the conflict.

We saw what happened yesterday where China's threatening the U. S. over our aircraft carrier in the South China Sea. All geopolitical issues, all parts come from those parts of the world. In Israel, we get a lot of fertilizer, which goes into this stuff. Are you having a geopolitical risk as it relates to this thing?

Okay, there's conflict brewing here. We got a stock up on the bolt, or we've got a stock up on the chip, because there might be some sort of restrictions or geopolitical retaliation. Are you looking at all that to ensure that the Edison supply chain runs fully smooth and your clients can deliver their product when they promise to their investors?

Brandon Bartneck:

Yes, I'm not going to pretend that I or anyone at Edison or anyone, I guess for that sake, really has a firm grasp on geopolitical impact and situation and can make firm predictions on what's going to happen. But ultimately we do identify that as a risk and partly for those reasons and partly for communication reasons and things like that.

We generally tend to prioritize a domestic or North American supply base more often than you might see in high volume production, because when you have dynamic builds and when you have this is a high chain environment, almost always it's high change environments in which we're working. And so having a supplier partner who you trust is going to work alongside you and work on these emergent issues and can do it on a time zone or in a way and ideally can come to your factory, you can go to their factory and spend time together and there's a lot of value there, more so than you'll see in the high volume, repeatable supply chain space. So I think that's certainly an aspect of it. And I also would highlight, I don't know, we're talking about low volumes here, right? Not many suppliers want to really provide low volume products.

There's some who specialize in that, but for the most part, we're working with suppliers who have bigger books of business. They have customers who are paying them more money. And they're focusing on other things. So we need, there's a lot of intentional work and partner selection and relationship building and things like that.

Having a trusted supply base in this low volume space, especially early on when you're building a handful of something or dozens of something and knowing that you can count on people to deliver and to prioritize your products. 

Grayson Brulte:

Why was the decision made early on Edison to focus on low volume and not mass manufacturing, like a Foxconn, for example why focus on low volume?

Brandon Bartneck:

Yeah, so there's a few things that go into that. So one, one is that this is an either or decision. I'm fairly confident there and that there are forks in the road and there are trade off decisions that need to be made that either make you good at high volume or they make you good at low volume.

The way in which you're setting up your systems and your processes, the people you're hiring, the way in which you're set, you're conducting business, the suppliers that you work with, the things I just mentioned there, your overhead. So your manufacturing approach, you can either be good at high volume or you can be good at low volume.

And so we chose low volume because we believed and still believe that this market is underserved and that there's people who are doing work in this space and trying to do work, but ultimately there's not many really good, like in the autonomy space, for example, there aren't many, if anyone else who's really good at doing this in low volumes and doing it in a repeatable, effective way.

And this is also something that's critical. So I came from FEV previous. So I was at Boeing and manufacturing and I worked at FEV, which is an engineering services company. And I was working on a lot of the types of products that we build here. But from a product development perspective, and one of the core things that I came to realize in part through that work in part through podcasts that I host, but is Technology is pretty good.

Maybe good enough in a lot of places to make the tech the technology shift that we're trying to make in the mobility space towards Decarbonized solutions different forms of electrification towards autonomy towards a few other things but the gap from a prototype and a proof of concept into production is a killer and Many companies are not making it through that leap.

So There's a, there is a need here and there's an op, there's a need to focus on this and to serve this market really well. And so that, plus a few other things ultimately made us think that this is the right place for us to be in. As we sit here today I'm very confident this is the right place for us to be.

Grayson Brulte:

You said the magic words, serve the market well, if you're going to build a product, you're going to build a business, you want to serve that market well, you want to serve your customers well. When you're focused on the low volume, obviously there's got to be a cap at some point, but what is the annual average output that you're thriving for, you're working towards?

Brandon Bartneck:

Yeah, and so as we mentioned, it often starts well, 1, 2, 5, 10, 50. Ultimately it's, it tends to be in the hundreds to low thousands for larger scale products and say vehicle level, whether it's assembly or outfits or that type of stuff, we also do serve components and sub assembly work where, simpler things in the electrification space, as well as a conventional propulsion system and related space. And that, that can more easily get into, 10, 000 plus and be a good fit. 

Grayson Brulte:

And then when you do that, do you just ramp up more factory space? Do you have multiple factories around the country or how do you ramp on that volume? Say one of the big three comes to you or one of the big German OEMs says, okay, Edison, we need to do 10,000, 20,000 a year, then do you just bring that facility online to serve that customer? Do you already have that capacity today? 

Brandon Bartneck:

Yes, so we do have capacity today. We have warehouse space and the ability to ramp up and down the things, the types of products that tend to be a good fit at tens of thousands of units are relatively low footprint type items on the line, right?

So it's not. When we're talking about things like a class 8 trailer or even a cab outfit or something like that, then Yeah, 50, 000 or something would be a lot and would require a lot of space But it's a smaller form factors for those higher volumes And then but even though if you're looking at thousand few thousand trucks or trailers like That does require a large footprint and we will all grow our current facility and that's as part of the plan So we're We have a nice facility right next to PJ Wallbank Springs and Port Huron, Michigan right now. And it's not going to be our last facility. We're going to scale when and where it makes sense. 

Grayson Brulte:

As you scale when it makes sense, will you add automation into the line to further streamline your product while increasing your profit margins? 

Brandon Bartneck:

Yes, I expect to intelligently though. So I mentioned capital efficiency is something that's very important to us. And as soon as you make large capital investments in things like automation, You begin to chip away at the inherent flexibility that we currently have and the cost structure that we currently have. So there certainly will be, almost certainly will be places where we're going to invest in and continue to invest in flexible automation and things like that. But, we're not in a hurry to, to invest before we need to there. 

Grayson Brulte:

You're smart because you don't know, you could have established company that comes to you for a class eight vehicle or a company that comes for a warehouse robot. It's giving you the ability to move. You want to be flexible.

I'll give you, I'll give you a lot of credibility on that. In your opinion, what is the future of automation and manufacturing look like? Cause obviously they complement each other, but you said the key there, you got to stay flexible throughout that process. 

Brandon Bartneck:

Yeah, and I don't know if I can speak to the overall industry. I will say, there's macro forces that automation continue to get better. And we're keeping eyes on that. Also, labor shortages are an issue now and will continue to be. So there's a few kind of macro trends that will continue to impact this industry. But maybe I can give an example of our sister company, PJ Wall Bank, that the way they've approached automation, I think mirrors the way that we're thinking about it.

And that it's people first, it's human labor first. So even, 20 million plus products per year that are produced from that facility. It's, there's more human labor than you would likely expect. And not because we're opposed. by any means to automation. It's when and where it makes sense applying technology and specifically automation is something that we believe in and doing it intelligently.

It's that we will not invest in technology for technology’s sake. We will make intentional strategic decisions and figure out how does this serve our business and how does this this is the same discussion now that we're having in the autonomy space, right? Like the companies that are doing things.

And are approaching this the right way. Aren't taking a solution and trying to throw it to a or they aren't taking a technology and trying to find a problem to solve with it. They're taught, looking at a problem and trying to figure out which technologies are the right thing. And we're thinking about it in the same way.

Grayson Brulte:

You have to think about it in the same way. Why. And now moving out of automation from the factories onto the streets, why, in your opinion you host a really great podcast and you had a lot of these really interesting discussions. You've talked to hundreds of individuals. Why is there's this diversion path where one, one company says, we're just going to take off the shelf and we're going to deploy it.

It's just going to work. And then you have another company says, Nope, we're going to look at the problem holistically, and we're going to build a product to serve that market. And there's no there's no middle line. It's just it's a, or B and there's this big divide.

Why from your podcast standpoint, do you think that there is this big divide?

Brandon Bartneck:

And I guess a funny anecdote, but I. One of my team members and I said like back-to-back discussions we had with prospective customers and one of them tech individual who in the autonomy space was so focused on the autonomy stack and just didn't think about the manufacturing and the hardware at all.

The other one was a traditional hardware. Yeah, we had seemingly very little respect and they're like we'll just go buy autonomy from someone and throw it on our hardware and we're like and I'm being crude and but like that there was a pretty, it was a stark contrast between the two approaches of the traditional manufacturing in the tech space and how they think about things and The answer has to be somewhere in the middle.

The autonomy is super important. The manufacturing and the product is super important. And also though, building it into your cut. So like one of the things that I focus on, I think more than anything on the future mobility podcast over the last year or so is like, how do you actually build a business around a given technology?

And how do you serve? real needs, right? And like the answer isn't simply take autonomy, take manufacturing and build a good product, but it's go solve a real problem in the market. And one of the tough things I think is that the people on the product side are so excited about the technology for good reason.

This is super cool stuff. They're like, it's easy to get sucked into how cool the thing is that you're building. And it's a lot harder to sit back and have. The difficult discussion of Oh, here's this. I didn't think I was ever going to be a logistics person and go understand the shipping industry, but, and the, all of the difficulties that come with it and you get into it and it seems like a simple industry from the outside.

But then like any industry, you're asking enough questions and it is super complex and there are things that are done for reasons, some that make sense, some that don't make sense and to actually serve. a given market, you need to go and you need to understand the state of that market, build relationships with the people who are actually going to use your product and then put a solution together that serves them.

And I don't know, that's uncomfortable. It takes time and it's, it takes a lot of discipline too, because Issues continue to come up on the product side, but you have to somehow think, be able to continue to keep an ear to the customer and work alongside them. 

Grayson Brulte:

This is where hiring individuals smarter than you comes into the picture. You could be the world's best founder, have the world's best coding abilities, but you might not know how they pass a bill from a legislative perspective. You might not know me geeking out within the geopolitics of the supply chain. So you go and hire individuals for that, and then you build a truly great company.
And that's where individuals have to come together and say, Okay, I know this little niche. I don't know this bigger niche. We have to come together. Otherwise they're going to run into issues. And unfortunately, You and I in this audience have had a front row seat to some of these train wrecks that have happened when somebody tries to force something through there.

And to our listeners, if you're interested in this conversation, I highly recommend you check out the Future of Mobility Podcast. Brandon does a really great job interviewing a lot of really interesting, wonderful people. Brandon, this has been a fun conversation about contract manufacturing. I got to study a lot for this, so it made me really happy and really proud.

I'll relay that to you and the good folks at Edison manufacturing there, as we look to wrap up this insightful conversation, what would you like your listeners to take away with them today? 

Brandon Bartneck:

Yeah. So first of all, thanks for having me on. Likewise. We really appreciate this. I really like what you're doing with SAE tomorrow, today, and great podcast and great listening and education, and I use that for some of the prep for my podcast episodes as well.

So there's a bit of a closed loop here, but I guess the thing I would say is takeaway is man, manufacturing's not a Bolton solution. If you're trying to do something to make an impact in the world and it requires a physical product, you need to be thinking about manufacturing likely sooner more or likely sooner than you are or than you think you might.

And I, this is, I didn't think I would care about manufacturing as much as I, I grew up in the Detroit area. I tried to get away and go work at Boeing and then in South Carolina, and then, I came back and got drawn through a of crazy route to where I am right now, but this is something that I really am passionate about serving this industry and Edison.

We've put together this team to do exactly what we're talking about here and to be an enabler for the companies that are shaking things up and making a better transportation ecosystem.

So if you want to chat, shoot me a note. LinkedIn's easy place to find me. If I can give him an email, it's my first name dot last name at edison manufacturing dot com, Brandon Bartneck at EdisonManufacturing.com.  Shoot me a note if you want to chat him, this is something that I'm really passionate about and really appreciate it, Grayson. 

Grayson Brulte:

You're very welcome. Find Brandon on LinkedIn. That's Brandon Bartneck, vice president, general manager, Edison Manufacturing and Engineering.

As Brandon says, do not cut corners, do manufacturing right. Today is tomorrow. Tomorrow is today. The future is Edison Manufacturing. Brandon, thank you so much for coming on SAE Tomorrow Today. 

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