Recalls are a major concern for any company, regardless of its size or industry. The impact can be devastating, both financially and reputationally. In fact, McKinsey reports that recalls have cost medical device manufacturers up to $600 million in recent years. The effects can be long-lasting, as customers are not quick to forgive. A survey by Harris Interactive revealed that 55% of customers would switch brands following a recall, and 21% would avoid purchasing any products from the manufacturer responsible for the recall.
So what can a business do in the face of a potential recall? According to Daniel First, CEO of Axion Ray, the answer might lie in artificial intelligence (AI).
“Product quality issues can have an impact on the end user if [the] issues aren’t addressed quickly and efficiently. Manufacturers struggle to proactively manage emerging issues affecting their customers, because field quality teams spend countless hours manually analyzing messy data sources to understand potential emerging problems.” – Daniel First
Axion Ray is a company that has developed an AI-powered platform to predict product failures by analyzing signals from various sources, such as field service reports, sensor readings, and geolocation data.
This technology has proven to be a lucrative business, with Axion Ray being valued at $100 million. Recently, the company announced a Series A funding round of $17.5 million, led by Bessemer Venture Partners and with participation from RTX Ventures, Amplo, and Inspired Capital. This brings the total raised by Axion Ray to $25 million, which First plans to use to expand the platform’s capabilities, enter new industries, and grow the company’s workforce.
First developed the idea for Axion Ray while working at McKinsey in their AI strategy division. He noticed that many AI-powered projects aimed at preventing product issues failed due to inadequate fine-tuning of the AI.
“To be successful, AI solutions that proactively mitigate issues need to be layered within a product, with workflows that different groups can use to collaborate to solve problems, enabled by a scalable AI platform with high precision,” explained First.
This insight led him to launch Axion Ray in 2021, with the goal of not only detecting warning signs of potential product failures, but also providing a unified view of the issues and associated data for different teams within an organization, such as engineering, program, product, production, field quality, and customer support.
“Manufacturers are struggling to proactively manage emerging issues affecting their customers because field quality teams spend countless hours manually analyzing messy data sources to understand potential emerging problems.” – Daniel First
One example of how Axion Ray’s technology can be applied is in the case of a car’s anti-lock braking system malfunctioning. By collecting data from various sources, such as mechanic reports, call center complaints, dealership visits, and car telemetry readings, Axion Ray’s algorithms can identify and alert manufacturers to recurring product quality issues.
With a team of 70 employees and clients in various industries including healthcare, consumer electronics, aeronautics, automotive, and industrial equipment (with notable clients such as Boeing and Denso), First is confident in Axion Ray’s growth potential.
“There are multiple trends that have supported Axion Ray’s expansion,” said First. “Many industries are releasing new technologies – like electric vehicles or other software-rich products – that are introducing unforeseen issues. Manufacturers are also working with new suppliers they have never worked with before. This is resulting in more quality issues than ever. Finally, manufacturers want to upskill their workforce to benefit from AI in driving automation of more manual tasks.”
Bessemer Venture Partners’ Kent Bennett also expressed excitement about Axion Ray’s potential, stating, “The ROI their AI command center delivers to improve uptime, customer satisfaction, and reduce cost has been a catalyst for significant growth within the customer base.”
Regarding privacy concerns, Axion Ray states that it typically retains customer data for the duration of an active account or as outlined in a customer’s contractual agreement. However, First reassures potential customers that they are committed to responsibly handling their data and will delete it within 30 days upon receiving a request.
