Challenges in Startup Supply Chain Management

It was also in the beginning,

the top suppliers would not work with us, or we would get their D team.

Because who wants, if they got all these customers, they got the big car companies,

they got Toyota,

or they got Audi, and W, Ford as customers, and a start up,

who, now you're in the supplier's position, which

team are you going to assign to the start up that everyone says is going bankrupt?

You're going to assign the interns and rejects.

Okay, it's not going to be your top team, your top team is

going to go to like Toyota,

you know, your big customers, your top team.

So we would get the worst team usually at the

supplier company, if the supplier would even work with us. You

think that influenced you to vertically integrate more? No,

it was vertically integrate or die.

Makes sense. Yeah. We tried outsourcing.

The battery production originally was going to be made at this place that made,

I think, barbecue grills in Thailand.

I read that story.

Yeah, and I was like, man, they have no idea how to make a battery.

And I was like, this is crazy, we're moving it back to our headquarters

in St. Colas, and we're just going to make it here.

Because basically,

there's a massive amount of work going from prototype to production.

And you need a fast feedback loop with engineering.

And if that feedback loop is all the way out in Thailand, it's just no way.

If you have an existing production line that you already know how

to make it in volume, that you can move.

But you cannot create a production line that never existed,

that's super far away from where the engineers are. It's right before disaster.

And also, the cells were coming from Japan.

So they go from Japan, they go to Thailand,

they go through customs, they'd be waiting, then they'd be going to a battery pack,

then that battery pack would be sent to England, then Lotus.

These are all things that got changed.

But the supply chain, like let's say there's been a problem with the cells, the

supply chain was so long that you'd only find out

that it didn't work five months later. Yikes.

Yeah, and then you have five months of scrap inventory.

So this is a recipe for disaster.

So that got moved to San Carlos,

cells shipped directly to San Carlos, put in a module,

figure out why the module's not working, fix it, put it into a pack.

The original reason why the Rose to Battery Pack had like,

I think it was like 16 sort of blades,

was if one of them didn't work,

you could pull it out and put another one in.

Because that happened.

Yeah. So.