Deploying a Local Supply Chain in the Context of a Global Crisis
At Auum — an acronym for “Arrêtons l’Usage Unique Maintenant” (“Let’s Stop Single Use Now”) — our mission has always been to encourage reuse through the development of cleaning technologies. It also reflects the vision of an industrial company capable of integrating the entire value chain, from the creation of our technologies to their assembly and delivery to our customers. Every department plays a key role in building this project. However, in today’s unprecedented context of shortages, the development of a European supply chain has become an undeniable strength.
Our inspiration: Tesla, the symbol of vertical integration
It is true that such models are becoming increasingly rare in France for hardware projects — in other words, the development of physical products. Companies often choose to outsource their production to integrators and EMS providers (Electronics Manufacturing Services).
This multi-tier outsourcing model has already proven its effectiveness. It is the model traditionally used by established industries such as automotive and aerospace.
However, some newer companies have successfully implemented a different approach and disrupted industries that had been established for decades. Tesla is one such example and has become a symbol of vertical integration. The company managed to reshape the global automotive industry.
Today, Auum has drawn inspiration from these new models while adapting them to our financing model, our areas of expertise and the current context.
The key lies in our ability to operate as an open platform with strategic partners. These partners are able to supply both technically advanced, high-value components and standard components that are already proven and functional.
It is therefore thanks to a local and well-controlled supply chain that our integrated model can fully express its potential. This is particularly reflected in our ability to implement product improvements quickly and reduce our overall costs.
Agility through technological proximity
Machining, 3D printing, moulding, precision sheet metal work, electronic board manufacturing, cable harness assembly… An auum-S contains more than 150 different components, all of which rely on different areas of expertise that are difficult to integrate internally from the outset.
To maintain a high level of agility during its development, Auum has operated as an open platform by working with partners located as locally as possible.
To maintain complete control over our technology, we have relied on two approaches to integrating expertise: internal skills, through team training and the recruitment of experts, and external skills, through R&D partnerships and the selection of key European suppliers and partners.
Paul Saunal, Auum Head of Global Supply Chain
In France and across Europe, it is possible to find SMEs and mid-sized companies capable of supplying high-quality technical components.
However, to remain efficient and competitive against Asian competitors, it is essential to develop new forms of partnership.
Auum therefore involved external experts from the design stage of certain components. These specialists are able to contribute their experience and help us quickly achieve an industrial level of manufacturing.
In addition, Auum has been heavily involved in quality processes at its partners’ facilities to ensure consistency between their workshops and our own assembly site.
This proximity helps accelerate production processes and ensures more consistent quality, which in turn improves competitiveness.
Trust through cultural and geographical proximity
Today, this cultural and geographical proximity has transformed the relationship. Our partners are prepared to invest locally in their production facilities so that we can grow together.
Auum currently works with around thirty French and European partners. Our company continues to invest alongside them, particularly to optimise the flow of information.
We are planning to implement a shared digital platform to make day-to-day communication and exchanges easier.
The potential risks of this European model could lie in sourcing and pricing.
Sourcing is essential, and the experience of our teams has allowed us to quickly identify the right partners.
When it comes to pricing, some may argue that compromises need to be made. However, as far as unit component costs are concerned, the sharp increase in transport costs — fuel prices, transport shortages and other factors — has significantly changed the equation.
The two pillars of our integration chain
When a supply chain operates independently, there is always a risk that it will function in “silos”.
This is why Auum’s industrial strategy is based on two pillars:
A supply chain that is as short as possible, in order to optimise quality and responsiveness. This performance is based on two essential factors: reducing the number of intermediaries as much as possible and maintaining geographical proximity with suppliers and partners.
The gradual integration of industrial processes. When production volumes justify it, bringing previously outsourced industrial processes in-house will make the supply chain even more agile. It will also improve working capital management by reducing capital tied up in processed products, dormant inventory and other stock-related costs.
What are the next steps for our supply chain?
Auum is currently working on the creation of its Auum Center, including the implementation of its new assembly line: the auum Pulse Line.
The objective is to streamline all production flows and provide the best possible working conditions for our assembly teams.
As part of this semi-automated production-line project, Auum plans to work even more closely with its long-standing partners in order to bring certain processes in-house and continue its growth.
With this model, Auum is able to deliver to a large number of European countries.
In the future, the next step will likely be to address the North American market, raising the question of whether this model should also be replicated across the Atlantic.
