Guide to Rapid Production Efficiency in Vertical Startups

Vertical startups are reshaping the manufacturing landscape, promising faster production ramp-ups with minimal disruptions. While the concept of vertical startups might seem ambitious, it holds transformative potential for businesses seeking streamlined operations and quicker returns on investment. In this deep dive, we’ll explore the crucial elements that make vertical startups successful, uncover challenges, and discuss strategies to bridge gaps between collaborators such as Consumer Packaged Goods (CPG) companies and Original Equipment Manufacturers (OEMs).

This guide is based on insights shared by Rebecca Marquez, PMMI‘s Director of Custom Research, during a podcast discussion. Her expertise, combined with real-world experiences from industry leaders, sheds light on how to navigate the complexities of vertical startups.

What is a Vertical Startup?

A vertical startup in manufacturing refers to the rapid and efficient execution of production processes, bypassing the gradual ramp-up traditionally associated with new implementations. Picture the concept as a near-straight line on a graph, going directly from zero to full production capacity with minimal delay. While skeptics might argue that this ideal is unattainable due to the inherent challenges of launching new processes, some companies have successfully demonstrated that it’s possible with the right approach.

Unlike standard production startups, which often face gradual progress and frequent disruptions, vertical startups rely on meticulous planning, robust collaboration, and seamless execution. This process allows businesses to minimize downtime, reduce costs, and meet market demands more quickly.

Key Pillars of a Successful Vertical Startup

Vertical startups demand a tightly coordinated effort between different stakeholders. As revealed during PMMI’s discussions, the following pillars are non-negotiable for success:

1. Transparency: The Foundation of Collaboration

Transparency emerged as a recurring theme in discussions about vertical startups. Both CPGs and OEMs must foster an open exchange of information to build trust and pave the way for meaningful partnerships.

Why It Matters: Transparency ensures that both sides are aligned on expectations, timelines, and potential risks. When competing interests or miscommunication arise, progress stalls.
Challenges: Some stakeholders are hesitant to share information, fearing they may lose competitive advantages or expose vulnerabilities. Overcoming this hesitation is essential to success.

2. Pre-Planning and Preparation

Vertical startups require extensive front-end work, from defining goals to aligning stakeholders. This goes beyond routine planning to ensure every detail is accounted for.

Scope Definition: All stakeholders must have a shared understanding of project goals, roles, and desired outcomes. Ambiguity can derail progress.
Documentation: Clear and comprehensive documentation keeps everyone on the same page. Proper records help mitigate risks and ensure accountability.
Role Precision: The right people must be involved at the right time. Success often hinges on contributions from key decision-makers and experts.

3. Process Optimization

Before production begins, every process and technology must be optimized for efficiency.

Proactive Refinement: Address inefficiencies or bottlenecks early to avoid costly disruptions during implementation.
Technology Integration: Ensure that all machinery and systems are ready to operate cohesively in the production environment.

4. Early OEM Involvement

A recurring point of contention during the PMMI discussions was the timing of OEM involvement. While some CPGs prefer to delay OEM participation until later stages, early involvement is critical for vertical startups.

Collaboration Benefits: Engaging OEMs early allows for tailored solutions that align with project goals.
Frequent Engagement: Consistent communication with OEMs ensures that potential issues are addressed proactively rather than reactively.

5. Risk Modeling

One standout insight from the PMMI discussion was the importance of modeling risks. This goes beyond standard assessments to simulate various scenarios and identify vulnerabilities.

Why It Works: By anticipating potential challenges, businesses can develop mitigation strategies and foster confidence in their approach.
Unique Approach: Some companies have successfully achieved vertical startups by prioritizing risk modeling as a key planning activity.

Common Challenges and Roadblocks

Despite its promise, achieving a vertical startup isn’t without hurdles. Below are key challenges identified by industry stakeholders and strategies to address them:

1. Lack of Communication

Poor communication – whether delayed, inconsistent, or incomplete – can derail even the most well-intentioned efforts.

Solution: Establish regular communication checkpoints and make information-sharing a priority.

2. Reluctance to Partner

CPGs and OEMs sometimes approach vertical startups with a transactional mindset, treating the relationship as a simple buyer-seller dynamic. This reluctance to collaborate inhibits progress.

Solution: Shift towards a partnership mindset that prioritizes shared success. A collaborative approach fosters trust and yields greater results.

3. Insufficient Buy-In

Key stakeholders must be fully invested in the process. Without their support, vertical startups are unlikely to gain traction.

Solution: Secure executive buy-in early by demonstrating the potential ROI and operational benefits of a vertical startup.

4. Overlooked Details

Failure to manage the finer points – such as improper documentation or unclear roles – can lead to confusion and errors.

Solution: Conduct thorough pre-planning sessions to address every detail and ensure alignment.

The Case for Partnerships and Collaboration

One of the most compelling takeaways from the PMMI discussion is the importance of collaboration. While the transactional nature of CPG-OEM relationships may create friction, true success lies in fostering strong partnerships.

As Marquez emphasized, forming a partnership doesn’t mean compromising proprietary information or competitive edges. Instead, it’s about working together to achieve shared goals. This requires a degree of vulnerability but ultimately leads to better outcomes for all parties involved.

Key Takeaways

Here are the central lessons from the discussion on vertical startups:

Embrace Transparency: Open communication and trust are foundational to success.
Prioritize Pre-Planning: Define goals, roles, and documentation early in the process.
Optimize Processes: Refine workflows and technologies before implementation.
Involve OEMs Early: Collaboration with OEMs from the start leads to better integration and problem-solving.
Model Risks: Simulate potential challenges to identify vulnerabilities and develop mitigation strategies.
Foster Partnerships: Shift from a transactional mindset to a collaborative approach that emphasizes shared success.
Secure Buy-In: Ensure all key stakeholders are aligned and committed to the project.
Communicate Effectively: Establish clear channels for information-sharing to avoid misunderstandings.

Conclusão

Vertical startups represent a bold and innovative approach to manufacturing, enabling businesses to fast-track their production capabilities. By prioritizing transparency, meticulous planning, and collaboration, CPGs and OEMs can overcome traditional roadblocks and achieve remarkable efficiency gains.

While challenges such as communication breakdowns and competing interests persist, they can be mitigated through proactive strategies and a willingness to embrace change. As Marquez noted, success hinges on fostering genuine partnerships that transcend transactional relationships.

By applying the insights and lessons discussed here, businesses can unlock the true potential of vertical startups and position themselves for sustained growth in an increasingly competitive market.

Source: "Achieving Rapid Production Efficiency in Manufacturing with Vertical Startups" – PMMI: The Association for Packaging and Processing Technologies, YouTube, Sep 5, 2025 – https://www.youtube.com/watch?v=5LvS970768w

Use: Embedded for reference. Brief quotes used for commentary/review.