PartsCloud is a German B2B technology startup that announced its successful closure of a €5 million seed funding round. It was invested in by key investors such as Newion, MBG, and SquareOne. This really gives a nod of confidence on the innovative solutions provided by PartsCloud.

Founded in 2021 by industrial engineers Benjamin Reichenecker and Fabian Gemmecke, PartsCloud emanated from direct experience of the pains associated with a traditional management of spare parts. Having worked for six years in the management of a mid-sized mechanical engineering company, 

Reichenecker said, the management of spare parts is labor-intensive without digital support. He further indicated that, for instance, most companies still rely on Excel spreadsheets in planning.

Traditional Spare Parts Management Problems

The inefficiencies in traditional spare parts logistics are well-documented. According to PartsCloud, about 80% of spare parts stored in factory warehouses are never used and end up being discarded. This overstocking is due to the archaic ordering methods that rely on intuition rather than data-driven insights, which lead to both stock shortages and excess inventory. 

Such practices not only tie up capital unnecessarily but also increase the risk of production downtimes due to unavailable critical components.

Read more: Trayd Raises $4.5M to Transform Construction Payroll Management

PartsCloud’s Innovative Solution

To mitigate these concerns, PartsCloud has come up with a fully digitalized platform that automates various aspects of spare parts management. The key aspects include;

• AI-Powered Inventory Forecasting: The algorithmic approach used by the platform predicts spare part demand, allowing optimal stock levels and reduced overstock or stock-outs risks.
• Automated Customs Processing: The web-based platform has streamlined complex customs procedures, allowing for smooth movement of parts across borders without significant delays.
• Logistics Management: The platform automates the logistics workflows that reduce manual intervention, cutting the internal process cost by up to 79%.

Read also: Observo AI Raises $15M to Transform Data Management

Impact and Client Success Stories

Since its founding, PartsCloud’s platform has been adopted by over 25 companies across Europe and the USA. The AI-powered planning solution has shown strong benefits, such as a cut in inventory costs by about one-third. Clients have reported big improvements in efficiency and accuracy. 

For example, Christian Meisen, the Head of the Global Service Center of WEINIG Group, claimed that using PartsCloud enables him to significantly optimize efficiency and accuracy in the management of spare parts, cutting manual planning efforts by over 85% and increasing spare parts availability.

Presently, the investors have realized the core requirement of the solutions presented through PartsCloud for the current market scenario.Leopold Lindner, VC Investor at Newion, said that in a market under economic pressure and facing a skilled labor shortage, spare parts management has become a critical revenue factor for machinery manufacturers. 

He said that old systems and inefficient processes are what hold many companies back, and PartsCloud provides the necessary tools for efficient spare parts management, allowing SMEs to stay competitive and meet global demand quickly and accurately. 

Read also: SuperOps Raises $25M to Transform IT Management with AI-Driven Solutions

Future Plans and Market Expansion

With the funding now in hand, PartsCloud looks forward to further strengthening its AI-based inventory planning software, which already enjoys an error rate of 30% that is lower than traditional methods. The company also plans to venture into new markets, such as Asia, to expand its global reach. 

For Fabian Gemmecke, COO, their solution is “a worry-free package.” He says that because the user-friendly software does not necessitate an elaborate logistics or planning department, which small companies cannot afford to maintain, the solution appeals greatly to those smaller companies.