Why we co-built OPLIT
Truth is like poetry. And most people fucking hate poetry (had to find a first line)
Oplit founders Thibaut Wilhelm, Soufiane Lamrissi & Léopold Lambert (PM at OSS Ventures)
At OSS Ventures, we invest in and co-build the software stack of the future of operations. As a venture builder existing since 2020, we created 12 companies of which 8 performed a series A, and are present in more than 800 factories throughout Europe. As builders of solutions for the manufacturing world, we are lucky to be at the forefront of the future of operations and are grateful for it. We took a habit, when a company gets created, to write the short story of how it went and the things we learned. You may find in the writing below interesting as it lays down the early stage story of OPLIT exiting the idea maze, and sometimes great jokes and pictures made the cut.
2020 : Evergreen, broken supply chains and the new world
In late 2020, the great supply chain reset hit. Basically, the stop and go induced by COVID at the very start of the supply chains (China and Africa mainly) made a ripple effect all over the world, and hit our European and US-based manufacturers. Suddenly, everything started malfunctioning. Masks were impossible to make, Everything that was true in the last era of the world, pre-COVID, seemed not true anymore.
The shift is deep, still ongoing, and is taking the world by storm. Here are some ground facts that happened :
- One manufacturer closed a plant for about 2 months, negating two years of benefit, because he could not manage the variability incoming from suppliers ;
- One manufacturer went from -35% to +45% expected output of a given factory in the span of 2 months from demand variability ;
- One manufacturer went from close to bankruptcy to making bank in three months because the parts they were supplying suddenly became a must-have for manufacturers due to a particular lockdown + power plant outage in China.
The world has irremediably changed, but the world is still catching up with this reality. Our point of view at OSS Ventures about the new normal is pretty straightforward:
- From extreme productivity with fragile operations to moderate productivity with resilient operations ;
- From long, low-stock low-relationship supply chains to short, high-stock high-trust supply chains ;
- From hyper optimized rigid operations to moderately optimized hyper-agile operations.
We went on the look for like-minded manufacturers and founders in the midst of the pandemic and uncertainty.
Thibaut, Souf’, and the tale of product development
Thibaut, a former operations consultant with a steep track record in tech, and Soufiane, former CTO at top companies and a former energy trader, stepped in. They were aligned with what we were seeing and wanted to have a more desirable world in operations : greener, more humane operations.
LISI, an aerospace manufacturer and one of our historic co-builders, stepped in with four other manufacturers: they were seeing the same thing, for the same reasons. We started building and researching with over 60 partners, and co-constructing the product with three manufacturers.
So we got to work with the amazing team at OSS Ventures and conducted more than 75 interviews of selected supply chain specialists, customers and shop floor workers alike. In the span of six short weeks, we learned a ton and set out to create our first product, a simulation tool for mid-level planning activities.
Planning activities in manufacturing (AKA the “S&OP” — sales & operations planning) comes in three parts :
- The high-level strategic planning phase. Once every year or quarter, the whole organization tries to guess what the sales will be, what the operational KPIs (how much time it takes to produce a part, what the suppliers performance and speed looks like, …), and the big hats at the company take big decisions on what and how they want to produce. The type of decisions can range from closing down a factory to outsourcing or in-sourcing part of the production, making a strategic decision about having a new, deep relationship with a supplier, expanding a factory. Those decisions are what guides the 12 to 18 month roadmap of all operational companies. It is multi factory and done at Group level, and current king of the hill in this category is Anaplan, a little-known multicorn that deals with those operations (roughly 60% market share) ;
- The mid-level strategic phase. Once every month or so, at each factory or buying center, the local head of the factory meets with the head of supply chain and teams. They look at the reality of orders coming in and the reality of production of their factory and the suppliers. They take decisions that must have an effect in the coming month or so, to stick with the plan or deal with the variability. The type of decisions can range from recruiting temporary workers, opening the factory on a Saturday, slightly overpaying a supplier to get parts faster and the likes. The current king of the hill in this category is Excel, managed by the local supply chain nerd leveraging extracts from ERP (the source of truth for supply chain) with over 95% market share (the failed category of APS, Advanced Planning Systems, never really took off other than some very niche ultra-repeatable and stable processes. They’re all more or less dead now.) ;
- The low-level execution phase. Once every day or so, at each line of the factory, the production manager talks with the operational people about what’s happening on the shop floor and how it goes according to the plan of the level above. Depending on new events, quality issues and whatever, they can choose to change the order of production, have a new emergency operation by increasing capacity, offload some part to a supplier or so. The current king of the hill in this category is the local whiteboard with sometimes a printed list of orders that people tick with a pen when it’s done (over 90% market share). The ERP only serves as a checkbox for “the higher ups” and the failed category of MES (Manufacturing Execution System), even when it’s in place, does nothing for this phase with a very low satisfaction level.
We focused on the mid-level strategic phase and the supply chain manager persona. Here is the typical cycle :
- Get the data from the ERP or the equivalent single source of truth ;
- Run various “what if” scenario and compare the impact on main KPIs on cost (how many people to employ, when to open, which parts, how much stock) and revenue (which clients are served on time, which mix of product from low to high margin are served first, …) during a lonely one-afternoon preparation phase ;
- Run the first part of the meeting by showing how the previous plan was achieved or not ;
- Run the second part of the meeting presenting the new plan with different scenarios, change some part of the thing, and validate one with comments and why you took that bet ;
- Put the new, updated plan and parameters in the ERP as the new preferred scenario ;
Excel is the king in this process, mainly because ERPs are built to be single static sources of truth, and cannot handle multiple scenarios at a time. Our basic assumptions about what had to be done to meaningfully augment this process were :
- Augment “what if” scenario with deep analytics and more predictive outcomes than the poor rules the supply chain managers were able to implement with their limited excel formula skills ;
- Foster collaboration by owning the presentation part of the process and get all the comments and decisions in-app ;
- Turbocharge learning by owning the cycle of decisions and allow leaders to A. Reflect on their past decisions, to B. Inform future decisions with data-backed feedback loop.
In about two months, we whipped out an MVP that did the job. Users were happy, and after some tinkering, we were owning the meeting and its preparation. The first four clients were happy as can be, and we were starting to have very nice verbatim such as :
“We made it through this month only because of OPLIT, otherwise the variability would have probably killed us”
( A factory director )
Everything seemed fine, recruitment was going well and we even had a drink to celebrate the fact that OPLIT was getting their own offices out of OSS Ventures. We were slowly offboarding the OSS team of product managers, tech professionals and growth managers who had been hard at work to start the new project. A fundraising was almost guaranteed given the traction (almost 10 clients onboarded and to be deployed, with blazing fast execution). Then, Thibaut called.
“We have to talk”.
He sat us down and exposed three points :
- Perceived value of “making better plans” was too low to have a pricing compatible with standard cost of acquisition of a factory customer (roughly 6 to 9Ke, so you better have 40K+ ARR to justify this) ;
- General managerial immaturity of manufacturing made it so that even a good plan is, on average, badly executed on the shop floor ;
- The learning feedback loop was extremely unclear because supply chain managers had in fact no idea why their plans did not pan out — OPLIT could point out what went wrong, but the why was flimsy.
We often joke with Thibaut that him saying “It’s not so bad” is the equivalent of a more cheery entrepreneur losing her mind over how great everything is. Working with him, we’ve come to deeply appreciate his “only the paranoids will survive” mindset that makes him a great truth-saying entrepreneur. In this particular case, he was 100% right and OPLIT was on a bad path. After some tiptoeing around the issue, Thibaut called the shots : “We have to build the second part of the product before scaling. Otherwise, it will just be premature scaling and we’re too respectful of investor’s money to do that.”
OSS first value is “Build a thing that matters”. It embodies our ethos of building things, of questioning ourselves about making things that actually change the world and not waste investors money, world-class founders time, and our energy on projects that ultimately don’t matter. So for us, re-investing time and money on OPLIT, without asking for anything in return but the success of the project, was a no-brainer. We re-staffed the team, re-housed OPLIT, and went to work.
The second part of the puzzle and why it mattered
We went into full user research mode, again, and talked to supply chain managers and operationnels alike. The three issues pointed out by Thibaut were indeed burning, and the full value was not unlocked. Actually, the added value to the factories was so little (making the life of one employee easier in about 20% of her job) that there was no way to get to the right perceived value. The plans were faster to make, yes, and documented, yes, but the actual improvement in efficiency were nowhere to be found. The very enthusiastic feedback from supply chain managers was one of a user’s life becoming easier, but a C-level willingness to pay for that is so low it does not matter in the end.
After getting to work again, it hit us :
- We focused on the wrong KPI to optimize for (better/faster plans) when we should have focused on result KPIs ;
- To truly be a game changer, OPLIT had to be the go-to solution for the bottom two level of the process, not just the middle one ;
- We had completely ignored the shop floor worker and how she was actually executing the plan (hint : it was bad) ;
- The shop floor worker’s median level of information was a one week old printed sheet of paper on a whiteboard that was disconnected from the previous plan, with no explanation on why, and she was sometimes ignoring those informations altogether. No wonder the plans were not executed that well.
The plan was actually pretty simple once that data was available : we had to own the execution part of the plan, by offering shop floor workers A. Instant visibility on what needed to be done and in which order, B. Why it was actually in this order and not another one, and C. The possibility to put their thinking on why it should be executed differently (particular machine sequences, little-known quirks of the production processes). By doing this, we were providing to the supply chain manager I) real-time vision on what was being executed, ii) a feedback loop on why sometimes the shop floor was doing something else than the initial plan.
This part of the product was trickier, as the app had to be designed for touchscreens (shop floor workers have no dedicated workstations, often no e-mail and need to see the production orders at all time) and had to maintain a constant connection to ERPs, old and crappy softwares that are actively fighting any kind of connection and innovation in their perimeter. But we got it to work in our first three factories in about six weeks.
And then everything changed.
The numbers started to improve, usage started to improve, the return on investment was way clearer and the customers were piling up. Time to raise.
The next 10 years
Between Thibaut, Soufiane and Newfund, the French/American fund, it was love at first sight and they quickly assembled top minds from manufacturing and technology to raise a very well executed first fund that gives them the room to have a 20-ppl team, meaningfully raise revenue and prove that OPLIT can own the whole supply chain execution and help manufacturers deal with uncertainty. We are extremely confident in Thibaut, Soufiane and their team’s ability to change everything in the game in the next 5 years.
Here’s to the next chapters of OPLIT. Here’s to building things that matter.
If you read this far, you’re likely very interested in this story. At OSS Ventures, we fuel on having incredible founders joining, ambitious factory executives taking the leap of faith and working with us, and ambitious investors joining in. If you fit in one or all of the above categories, we want to hear about you. firstname.lastname@example.org . Hit us up. Maybe together we can find product-market fit instantly instead of in two successive motions.