Atomic: AI Inventory Solution Founded by Former Tesla Supply Chain Leaders

Tesla's Production Challenges Spark New AI Supply Chain Company

In 2018, Tesla faced significant hurdles in scaling production of the Model 3 sedan, a situation that nearly led to the company's collapse, as stated by CEO Elon Musk. This critical period served as the catalyst for the creation of Atomic, a new venture focused on leveraging artificial intelligence to optimize supply chain management.

Founding and Initial Funding

Atomic was co-founded by Michael Rossiter and Neal Suidan, both former employees of Tesla. The company originated within DVx Ventures, the investment firm led by Jon McNeill, Tesla’s former president.

DVx Ventures spearheaded a $3 million seed funding round for Atomic, with additional investment from Seattle-based Madrona Ventures. McNeill highlighted the founders’ direct experience with supply chain difficulties at Tesla, noting they reported directly to him.

AI-Powered Inventory Optimization

Atomic intends to implement its agentic AI technology to expedite and simplify inventory planning for its clients. Initial trials have already demonstrated promising results.

One pilot customer successfully reduced inventory levels by 50% while maintaining a 99% in-stock rate. This balance frees up crucial working capital for other business needs and simultaneously mitigates potential risks.

The Importance of Inventory Management

McNeill emphasized the dangers of both excessive and insufficient inventory. Too much capital tied up in stock can negatively impact a business, while inadequate stock levels can lead to lost sales opportunities.

Atomic’s initial clientele spans the consumer packaged goods, food and beverage, and apparel sectors. The company asserts it has enabled these customers to decrease inventory costs by 20% to 50%.

Addressing Current Market Volatility

Suidan explained that the current global uncertainty has created substantial demand for solutions like Atomic’s, as existing systems are ill-equipped to handle such volatility.

Traditional planning often involves extensive, time-consuming scenario analysis, frequently requiring planners to revisit and revise their work in response to unforeseen questions from leadership.

Streamlining Scenario Planning with AI

Atomic’s software utilizes the same data sources as traditional methods but allows inventory planners to rapidly simulate various scenarios, a process that typically consumes hours or even days.

Rossiter and Suidan prioritize rapid deployment and adaptability when working with new customers. A generalized, flexible data model is crucial for quick implementation.

Empowering Planners with Control and Ownership

Suidan stressed the importance of giving planners precise control over the planning process. This ensures they maintain a thorough understanding of the plan and can confidently explain its intricacies.

Combining a flexible data model with planner empowerment is the core focus of Atomic’s approach to solving supply chain challenges.

A Lineage of Tesla Alumni

Numerous former Tesla employees have launched their own startups, including JB Straubel (Redwood Materials) and Drew Baglino (Heron).

However, Atomic distinguishes itself by building upon a specific philosophy developed by Rossiter and Suidan during their time at Tesla, rather than simply applying acquired skills to new problems.

Building on Tesla's Supply Chain Foundation

McNeill stated that Rossiter and Suidan were instrumental in constructing Tesla’s end-to-end supply chain orchestration system from the ground up.

Suidan highlighted that the value of their work at Tesla extended beyond the technical solution itself, encompassing a fundamental shift in the planning process.

Transforming Tesla's Planning Process

Prior to the new system, Tesla’s planning process involved disparate teams working in isolation, exchanging spreadsheets, and struggling to reconcile conflicting information.

The system they developed aimed to create a dynamic and efficient process capable of supporting Tesla’s ambitious business goals, resulting in a “complete transformation” of daily operations.

From Tesla to Atomic

While Rossiter departed Tesla shortly after the Model 3 production ramp-up, Suidan remained until 2022. In 2023, the two reunited to explore the potential for replicating their success on a broader scale, leading to the creation of Atomic within DVx Ventures.

Rossiter articulated the company’s ambitious vision: to provide support for every company involved in the sale of physical goods.