Software Vets Launch Company at Incubator

Two old hands at starting software companies have joined forces to form FactoryDNA, Inc., which has just joined the Austin Technology Incubator.

Richard Lebovitz and Henry Perez, who founded Austin-based Factory Logic Inc. in 1998, have teamed up again to form a software company that will target the manufacturing industry.

Lebovitz says the company already has customers and revenue, but he declines to disclose details on either one. FactoryDNA employs five people after being in business for one month.

FactoryDNA develops software to carry out "lean manufacturing" for consumer goods manufacturers. The goal of lean manufacturing is to allow production plants to keep less inventory and lower costs.

The company will focus on consumer industries instead of aerospace and automotive manufacturing, as Factory Logic does, and will combine software with consulting services. Also, FactoryDNA's software is sold by subscription, while Factory Logic's is sold through licensing agreements.

"Our whole model is the mix of service and software. For years, consultants said software would not help create a demand-driven manufacturing environment, and then the software guys came in and said, 'You can do this using our product and that will solve all your problems.' But the truth is, it is a mix of both," Lebovitz says.

Manufacturers are concentrating more on the lean manufacturing concept. According to preliminary results of the 2003 Industry Week/Manufacturing Performance Institute Census of Manufacturers, a little more than one-third of U.S. manufacturers identify lean manufacturing as their primary improvement method. Only 2 percent of plant executives say their lean manufacturing processes are complete.

Lebovitz says companies such as The Procter and Gamble Co. and Johnson & Johnson are facing more pressure from large retailers such as Wal-Mart Stores Inc. to deliver the right products in anticipation of consumer demand. In the past, those suppliers typically have produced items according to their internal schedules; excess inventory wasn't part of the equation.

This is Lebovitz' and Perez's second time at ATI. They also started Factory Logic there.

Joel Wiggins, executive director at ATI, says he's glad to have FactoryDNA at ATI because of its executives' experience and global client base.

"One of the goals of ATI is to expand Austin's global reach, and this is a company that is going to have customers around the globe," Wiggins says.

Twenty-five companies are housed at the incubator, which is a division of the University of Texas' IC2 Institute.

© 2003 American City Business Journals Inc.

Web reprint information