Rebirth: Starting from Lighting Up the Tech Tree

Chapter 137 Capacity Expansion

Orders came in like snowflakes.

Seven days after the Ministry of Agriculture and Rural Affairs released its subsidy catalog, the marketing department of 402 was already extremely busy. The inquiry hotline rang from morning till night, and the sales staff's voices were hoarse.

"Mr. Zuo, the statistics are in." Han Lu placed a report on Zuo Cheng's desk. "In seven days, we received a total of 1432 tentative orders for drones. Based on the subsidy standard of 3 yuan per drone, these orders involve a total amount exceeding 4300 million yuan."

Zuo Cheng looked at the report, his brows furrowing slightly.

What about our production capacity?

"We're currently producing 200 units per month," Han Lu said with a wry smile. "If we relied entirely on contract manufacturers, it would take seven months to fulfill all the orders. Our clients expect delivery within two months."

"Deliver within two months?" Zuo Cheng shook his head. "Impossible."

"So we need to find a way to expand production capacity," Han Lu stated, explaining her purpose. "I have a few plans; please listen to them."

"explain."

"First, we'll continue looking for contract manufacturers. We currently have three partners, and if we find two or three more, our production capacity can increase to around 350 aircraft per month. However, this will increase costs by 15%."

"And the second one?"

"Secondly, we'll build our own production line." Han Lu took a deep breath. "We'll buy land, build the factory, and purchase equipment, with a projected investment of 5000 million yuan. Once completed, the production capacity will reach 800 units per month, and the cost will be 25% lower than contract manufacturing."

Zuo Cheng did not answer immediately.

He stood up and walked to the window. Outside was an open space, their rented drone testing base. Further away were several buildings under construction.

"How long will it take to build our own production line?" he asked.

"From site selection to production, it takes at least six months," Han Lu replied. "But once completed, production capacity will quadruple, making it worthwhile in the long run."

"Six months." Zuo Cheng pondered. "The client can't wait six months."

"Therefore, we need to take a two-pronged approach," Han Lu said, already prepared. "In the short term, we will increase the number of contract manufacturers to fulfill as many orders as possible. In the long term, we will build our own production lines to completely solve the capacity problem."

"What about the funds? 5000 million is no small sum."

"We can invest in phases," Han Lu said. "We'll start by investing 2000 million to build a production line, and then expand as we go. In addition, our Series B financing is also underway; Zhou Bo from Ginkgo Capital is very interested in the drone market."

Zuo Cheng nodded.

"Bring Chen Hao and Fang Ze here; we need to have a meeting."

---

In the meeting room, four people sat together.

"The production capacity issue must be resolved," Zuo Cheng stated bluntly, "but it must be addressed in two steps, one short-term and one long-term."

"What's the short-term outlook?" Chen Hao asked.

"We need to add more contract manufacturers," Zuo Cheng said. "Hanlu is contacting reputable contract manufacturers in the industry to discuss cooperation. A 15% increase in costs is acceptable; we need to process this batch of orders first."

"Understood." Han Lu wrote it down.

"What about in the long term?" Fang Ze asked.

"Build our own production line," Zuo Cheng said firmly. "This is the fundamental solution."

Fang Ze frowned.

"Building our own production line would require a substantial investment of 5000 million. How much cash do we have on hand right now?"

"About 4000 million," Chen Hao replied, "but we still need to set aside R&D expenses and operating costs; we can't invest it all."

"So it will be done in phases," Zuo Cheng said. "The first phase will involve an investment of 2000 million yuan to build a semi-automated production line with a monthly capacity of 300 aircraft. The second phase will involve another 3000 million yuan to upgrade it to full automation, increasing the monthly capacity to 800 aircraft."

"What about the funding gap?" Fang Ze continued to ask.

"Financing?" Zuo Cheng looked at Han Lu. "Any news from Zhou Bo?"

"Mr. Zhou is very optimistic about the drone market," Han Lu said. "He indicated that if our order data continues to grow, we could consider leading a Series B funding round."

"Then show him the data," Zuo Cheng said. "1432 tentative orders and a contract value of 4300 million yuan—that's our confidence."

Shen Yiming had been silent until now, but finally spoke.

"Mr. Zuo, I can take charge of the production line construction."

"Drone production lines differ from ordinary electronic product production lines; they require precise assembly and debugging," Shen Yiming said. "I'm wondering if we can leverage the advantages of AI algorithms on the production line."

"What do you mean?" Zuo Cheng became interested.

"Intelligent quality inspection," Shen Yiming explained, "Using visual recognition and AI algorithms to replace manual quality inspection is not only faster but also more accurate. It can reduce the number of quality inspection positions by half."

Zuo Cheng's eyes lit up.

"Go on."

"And there's intelligent scheduling," Shen Yiming said, becoming increasingly excited. "Based on order priority, capacity constraints, and equipment status, it automatically generates the optimal production schedule. This reduces changeover time and improves equipment utilization."

"Can these two technologies be used now?"

"It will take time," Shen Yiming said honestly, "but if we can apply AI technology to the production line, our production line will be the most advanced in the industry."

Zuo Cheng stood up and walked to the whiteboard.

"Okay, it's settled then." He picked up his pen and began to write, "First, capacity expansion will be done in two phases: adding contract manufacturers in the short term and building our own production lines in the long term. Second, Shen Yiming will be in charge of the production line construction, integrating AI technology to create intelligent production lines. Third, Han Lu will lead the financing round, pushing forward with Series B."

"Understood," the three answered in unison.

---

A month later, 402's first self-built production line officially went into operation.

The production line is located in a drone industrial park on the outskirts of Hangzhou, covering an area of ​​2000 square meters. Although it is not large in scale, it is well-equipped and highly automated.

Zuo Cheng stood beside the production line, watching drones slowly move along the conveyor belt.

"Monthly production capacity is 300 aircraft," Shen Yiming explained. "Adding the 200 aircraft from the contract manufacturer, the total production capacity reaches 500 aircraft. We can deliver 400 orders this month."

"How is the quality inspection system working?" Zuo Cheng asked.

"The accuracy rate is 99.7%," Shen Yiming said proudly. "That's 3 percentage points higher than manual quality inspection. And it's 5 times faster than manual inspection."

"Okay." Zuo Cheng nodded in satisfaction.

Chen Hao walked over from the side.

"Boss, I have some news." He lowered his voice, "We've inquired around, and Huaxin is also building a drone production line. It's larger than ours, with an estimated monthly capacity of 600 drones."

Zuo Cheng's eyes flickered slightly.

"Lin Jianhua's reaction speed is quite fast."

"It's not just about building production lines," Chen Hao continued. "I've also heard they're developing new types of drones, aiming to surpass ours in performance."

"Let them do the research and development," Zuo Cheng said. "We're not afraid of competition."

He turned to look at Shen Yiming.

When will construction on the second phase of the production line begin?

"The design is complete," Shen Yiming replied. "If the funding is secured, production can begin in two months."

"Tell Han Lu to expedite the financing process," Zuo Cheng said. "I want to increase monthly production capacity to over 800 aircraft within three months."

"clear."

Zuo Cheng looked at the production line again.

One after another, drones are completing their final assembly, ready to take to the skies. They will serve multiple fields such as agriculture, logistics, and surveying.

"The drone market is just getting started," he said softly. "The real competition is yet to come."

Outside the window, another batch of brand-new drones took off and flew into the distance.