Vertical Integration
"Imagine that your favorite corn chip manufacturer also owned the number one diarrhea medication"
As a corporation primarily concerned with production, our overwhelming imperitive is to get the assumption about the productivity of each purchased machine absolutely correct. More concretely, we live or die by minimizing the cost of good parts per hour per unit labor amortized over the lifespan of the machines (CoGPPULOL ??). This gives us a few vectors we can optimize independently without compromising on others, all of it of course limited by the capital available.
In very simple terms our tradeoff is between outsourcing production steps that eat into our own margins, or massive capex justified by sales and a reasonal amortization schedule. Motors are actuators remain failry high margin to begin with which is helpful, but it is not something that will last forever. Outsoucing also means you become less resilient to shocks your suppliers face (spike in raw material costs, industrial accidents, lead time creep, etc.). There are too many risks involved to start like that under ordinary circumstances and even more so during major supply chain disrupting events the planet over.
So sure, just vertically integrate. Right?
Throwing money at this problem will work to very long extent but you will very frequently find yourself at the precipice of unprofitablility. This is just true no matter how much you fudge the numbers around the COGPPULOL metric. It is not a coincidence that part of the pitch of many manufacturing operations is selling to cost-agnostic defense applications that block out overseas competition and require, to say the least, unusual methods for customer accquisition.
As a corporation aiming to bring robotic abundance at the consumer scale this is just not going to work.
Making accurate predictions about interest rates and the consequent cost of capital is difficult in the best of times, and we are not in the best of times. Uncertainty always leads to higher premiums and it pushes you further close to the edge. Betting on a protected market and wishcasting that the overwhelming industrial champion in China is gonna leave the fat margins around forever is just cope. And cope is not a strategy.
So, how do we plan to overcome this?
It's simple, we make the machines cheaper by building it ourselves. This is the Saturn Robotics vertical integration strategy.