April 19, 2017

Combi Works’ factory concept is in demand

Combi Works does not own any factories, instead it uses a partner network to manufacture products for its customers. Now it wants to transform the whole production process into a digital platform.
Combi Works does not own any factories, instead it uses a partner network to manufacture products for its customers. Now it wants to transform the whole production process into a digital platform.
istock.com/gilaxia

Finnish company Combi Works is remodelling manufacturing by combining digital tools and the surplus production power of factories around the globe.

Manufacturing is in dire need of modernisation, believes Edward Blomstedt, the CEO of Combi Works. Instead of owning their own production facilities or managing rigid sourcing agreements, companies require fast, flexible delivery and the Helsinki-based company is making this a reality with its ‘Factory-as-a-Service’ (FaaS) concept.

The idea is simple: most factories have surplus production capacity, but it rarely gets matched with companies in need of it. Combi Works wants to harness this extra capacity on a digital platform which analyses where is the fastest and most efficient place to manufacture each of its customer’s products. This enables the companies to react swiftly to market changes, scale production up or down as needed and focus their own resources on product development.

“If you can standardise and manage production through a digital platform, you can move production where the demand is,” Blomstedt explains. “This means you need less storage and shorter logistics chains. The production is faster, more efficient and scalable.”

What makes the model particularly ambitious is the company’s plan to include financing and insurance in the package to create a one-stop-shop for all aspects of the production chain.

From Russia with manhole covers

The origin of Combi Works lies in the years Blomstedt spent in Russia as a teenager while his mother was helping to launch the country’s first mobile operator.

“We made a deal with mum to move to Russia for two years; it cost her a few Nintendo games and a dog, but it turned into six years,” he recalls with a laugh.

“At the World Economic Forum one of the main focuses was ‘Industry 4.0,” says Edward Blomstedt. “I see it as an important thing, the talk about automatisation and robotics, but it still mainly looks at how a single factory can digitalise its operations [not the whole production chain].”

“At the World Economic Forum one of the main focuses was ‘Industry 4.0,” says Edward Blomstedt. “I see it as an important thing, the talk about automatisation and robotics, but it still mainly looks at how a single factory can digitalise its operations [not the whole production chain].”

Combi Works
The experience came in handy some years later, when Blomstedt was studying production economics in Finland. A Russian factory sought to produce manhole covers for the Finnish market and Blomstedt started to work with them alongside his studies, got his mother (and later brother) on board and founded Combi Works in 2005.

Today Combi Works describes itself as a FaaS company. Instead of factories it owns production capacity and uses partners to manufacture everything from windmill parts and greenhouses, to solar-powered street lights and consumer products for its customers.

Over the years the company has built a network of partner factories which cover nine countries, including Estonia, China and India. This is the network Combi Works is now tapping into as its expands its FaaS concept into a digital product.

This process is boosted by two million euros in research funding from Tekes, the Finnish Funding Agency for Innovation. Combi Works is also collaborating with Finnish software house Cubescom to develop its digital management platform and integrate insurance and financing elements.

“Currently, for example, banks finance the buyer of a tractor, its manufacturer and the factory all separately,” says Blomstedt. “Instead there could be a single [financing] pipeline following the product throughout the process.”

Industry 4.0

Combi Works is not the first to talk about FaaS, but Blomstedt’s vision is to expand it to cover the whole manufacturing process and make the term the company’s own.

“No factory has a 100 per cent utilisation rate and we think it makes more sense to use them more efficiently than build new factories,” Blomstedt explains. “With our model, there will be less idle factories and futile factory construction.”

While Combi Works’ digital FaaS model is still a work in progress, the company is expecting to release the first demos this autumn and launch the platform in 2018. Ambitions are high:

“With good luck, we will disrupt both the manufacturing and financing worlds,” Blomstedt declares. “So, just your typical nine-to-five job.”

 

Text: Eeva Haaramo

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