Rhonda Dibachi, CEO of HeyScottie, is an American business executive, entrepreneur and author. HeyScottie is an artificial intelligence-powered platform delivering superior sourcing options for manufacturing finishing services.
Rhonda was also co-founder and CEO of Noribachi, a custom LED lighting manufacturer specializing in industrial and commercial applications. Prior to Noribachi, she co-founded Niku Corporation, a Silicon Valley-based infrastructure productivity software provider, with her husband Farzad Dibachi. Previously, she worked for Webvan and has been recognized as a leading female entrepreneur.
In an earlier career, she served as nuclear engineer for GE, and is an author, U.S. patent-holder, and has served a Board Trustee and Advisor for a number of educational, non-profit, government and educational organizations.
Grit Daily: U.S. manufacturing is a $2.1 trillion dollar driver of the economy*, accounting for 12% of GDP. Why is such a significant economic force so ‘late to the game’ in terms of technology innovation?
Rhonda Dibachi: I think if you want to boil it down to one thing it’s because manufacturing is a physical activity involving physical objects. It’s hard to digitize a physical object. It’s similar in the transportation industry, and the construction industry, which are also very famously non-digitized. So, the first things to go digital in an industry like manufacturing are the ones everyone is digitizing, like purchase orders and catalogs. Changing a paradigm for a piece of paper is an awful lot easier than changing a paradigm for a generator.
And even a piece of paper can be hard to digitize in the manufacturing sector. For example, the Underwriters Laboratory (UL) label, which signifies that your product has been tested, certified, and listed by UL. Years ago, we would order the UL Certified labels from Brady Corporation, and if we ran short or forgot to order, production would simply stop. You don’t want your product being shipped without that label. So, you’d lose days, maybe a week of production because of that tiny label. Today, you can print your own UL labels on-demand, but you have to buy a particular type of printer and special label paper because the UL Mark must be integrated into a label with the markings that are required by a specific UL Standard, and the label itself has to meet material and print requirements.
So, this tiny label that is an absolute must-have for many products to ship can only be digitized to a certain point, and it shows just one of the complexities and the interconnectedness of manufacturing.
Grit Daily: The pandemic has revealed a global “Achilles Heel” in terms of supply chain resilience. Can you explain some of the lessons learned – and more importantly – the steps being taken to strengthen the manufacturing supply chain today?
Rhonda Dibachi: The pandemic showed us how catastrophic a major supply chain disruption can be, causing delays in supply deliveries and manufacturing, leading to shortages of products that should have been on store shelves but were stuck in warehouses and on shipping docks, and causing many businesses to shutter.
At first glance, the problem with our supply chain seemed simple to some: it relies exclusively on single-source suppliers. If the majority of your components are coming from one supplier in China, and that supplier suddenly can’t fill your purchase order or shipping from China has ground to a halt, you’re stuck.
Some have suggested that the answer is to multi-source, but this is simply a no-go. Managing multiple providers is cost-prohibitive and flies in the face of every lean manufacturing best practice we’ve relied on for the past 50 years.
Rather, the solution is to intelligently apply tech in such a way that it gives more visibility into the supply chain without overburdening manufacturers.
What does that mean? The short answer is: contractually obligated visibility into your supply chain and your supplier supply chains.
One way to achieve visibility is to write it into your purchase order terms and conditions. It could take the form of requiring integration of an API and directing suppliers to require the same from their suppliers—creating a domino effect of increased visibility into the supply chain.
Incorporating an API into their enterprise resource management (ERP) program would not pose a challenge for large manufacturers. Smaller manufacturers can use an iCommerce (industrial commerce) platform (think Shopify for industry).
Grit Daily: One of the critical take-aways from the supply chain crisis is the manufacturing sector’s reliance on external resources to provide mission-critical processes in order to create product. Can you tell me your strategy to address this need, and why or why not a fully “in house” manufacturing approach would make sense?
Rhonda Dibachi: No one is fully in-house, because it’s simply impossible. Take Apple, for example. Apple doesn’t actually make iPhones; Foxconn makes iPhones. Apple doesn’t make the chips in its phones or other devices; Qualcomm makes the chips. Apple, like all manufacturers, selectively outsources a lot of components and processes, focusing their own production on whatever gives them their competitive advantage.
Looking at how badly the pandemic snarled and kinked and broke the supply chain, and how catastrophically that impacted everyone, it’s natural now to look for solutions like bringing more production in-house or, as some have suggested, multi-sourcing from suppliers.
But we can’t toss 50+ years of lessons in lean manufacturing out the window to try to create more resilient supply chains.
Every decision that you make to increase the network of your suppliers is going to erode your margins. Adding new production lines for components you used to get from suppliers would be astronomically expensive, if it was even possible.
Grit Daily: While manufacturing is a materials, equipment and process-heavy sector, I’d be interested in hearing more about industry beliefs and thought processes. Is there an openness among manufacturing leadership to adjust time honored processes, or is there a significant challenge in getting ‘old dogs to learn new tricks,’ in a manner of speaking?
Rhonda Dibachi: Nobody trusts anybody else in manufacturing. It’s very competitive, so everyone keeps their cards pretty close to their chest. That’s why it’s so hard to get pricing and lead times.
Grit Daily: It’s the start of the new year. Do you have predictions or emerging trends you can brief me on regarding this industry?
Headless architecture. The near future will bring steps towards truly distributed manufacturing. The first step is the connected factory. The next step is connecting manufacturer to manufacturer, giving them a real insight into their supply chains.
Connecting manufacturer to manufacturer requires a great deal of trust, which is not in abundance among manufacturers—so this is where headless architecture can provide the solution.
We already have a potential roadmap, in headless architecture systems like Shopify. That’s the retail consumer side of the picture.
The industry commerce side of the picture is materializing through offerings like Microsoft’s “Dynamics” headless ERP architecture, Inxeption’s iCommerce platform, and the blockchain.
To get beyond the self-contained bubble of the connected factory to the next step—connected manufacturers and a more transparent supply chain—you have to invite your suppliers in, and the blockchain offers a mechanism for the trust that will be required.
The blockchain is also perfectly suited to headless architecture solutions, offering the speed and security to power back-end processes while building trust by verifying the legitimacy of suppliers, transactions, and products.
Grit Daily: Please tell me how HeyScottie delivers effective sourcing referrals – and what role you hope your company plays in the industry?
Rhonda Dibachi: HeyScottie dramatically simplifies the process of finding finishing services like powder coating, anodizing, and electroless nickel plating for manufacturers. With the HeyScottie Automatic Pricing Engine, we’ve cut the RFQ process for finishing services down from months to minutes.
All a manufacturer has to do is upload their CAD and tell HeyScottie to “go fetch.” HeyScottie will immediately come back with the best pricing and leadtime for the requested finishing service.
What’s more, with HeyScottie, manufacturers don’t have to settle for the best finishing service in their local area. We built the nation’s first database of finishing service operators, pricing, and turnaround times, so we can often save manufacturers money and get their finished product back to them faster by using finishers in the next town, next state, or even across the country.
Using HeyScottie gives manufacturers an opportunity to see what’s available here in the U.S. and potentially to bring some operations back to the U.S. because they can now see and get easy access to finishing services they may not have known were available here.
Grit Daily: Although we’ve focused on domestic manufacturing, both market demand, industry relationships and resources are global in nature. Can you address the challenges of streamlining manufacturing process from a global perspective? Do differences in facilities, materials, processes and cultural norms make true efficiencies improvement unattainable, or is there opportunity for improvement?
Rhonda Dibachi: U.S. manufacturers have been following the principles of lean manufacturing to increase efficiencies and cut waste from their production and business processes for at least a half a century. And they’re very good at it.
So, it’s not really about lack of efficiency in manufacturing or differences in materials, etc. China became the center of the world’s supply chain because of cheaper labor and huge government investment in the country’s manufacturers. Between U.S. trade tariffs that went into effect in 2018 and China’s zero-Covid policy, China has been losing ground to other countries, but those countries, too, offer cheap labor.
Does that mean that there’s no hope for U.S. manufacturers to compete on a global level? I don’t think so.
One of the things we learned from the pandemic is that we can’t afford the type of supply chain disruption that we’ve experienced for the past few years. And one way to avoid another supply chain catastrophe is to look closer to home for the goods we’ve been shipping from other countries.
Production is already starting to come back to the U.S., thanks to things like the CHIPS Act, which allocated $280 billion to boost U.S. chip production.
Another advancement in manufacturing that’s a boon to the U.S. is the profusion of manufacturing-on-demand companies like Xometry, Fast Radius, and Protolabs. These companies and others like them are bringing Amazon-like speed and convenience to the manufacturing space, making it easier to not only manufacture in the U.S., but also to innovate.
When I was working in manufacturing in the lighting industry, we were able to successfully compete with cheaper overseas manufacturers by customization and new product introduction. I saw that my U.S. counterparts were doing great stuff, introducing really clever new products. I rarely saw innovation from overseas, because their primary driver is to take something and make it cheaper.
We in the U.S. excel in new product introductions. Additive manufacturing and the rise of online manufacturing marketplaces are helping U.S. designers bring more products to market more quickly.
Rhonda Dibachi: Rhonda, your biography notes that you started your career as a nuclear engineer, but now you are the CEO of a company focused on manufacturing resources and productivity. Can you tell us why you made the switch and what elements, if any, of your professional experience informs your current role?
Rhonda Dibachi: I followed the money out of nuclear and went into technology because that what I had been doing at the nuclear power plant, implementing a computer system. I was able to parlay that experience into my Oracle career.
But I really love manufacturing and feel like the manufacturing industry has been unfairly undervalued in favor of the tech industry. One of my goals in starting HeyScottie is to help manufacturers become more digitized so that their valuations will improve. But, as I mentioned before, it’s hard to digitize a physical object, and there are already some very effective innovations in digitizing the production line and other internal processes. HeyScottie allows manufacturers take their digitization efforts beyond their own four walls and beyond their geographical area to get better and faster finishing services.