Partners,

The era of making money simply because you bought a factory ended years ago. The first long wave of process improvement gains from lean, off-shoring, and shared-services has largely run its course. Multiple expansion won't get it done any more. The next lever is incremental cashflow when software, not gut feel, makes the high-volume calls that quietly shave or add basis points of EBITDA. This is what we call operating decision alpha: the EBITDA from day-to-day, line-level decisions that optimally allocate scarce resources to grow margin.

Over a decade of building AI for lower middle market plants, and in virtually every recent portfolio review, we've traced persistent margin leakage to decisions still made by feel: scheduling Tuesday's swing shift, choosing which SKUs to reorder, deciding whether to nudge price or swallow shrink. In a Tier-2 machining plant we followed last year, clipboard demand planning alone cost $4M of EBITDA, greater than its yearly debt service.

This alpha is different from the classic quick wins of earlier cycles. It's locked in tribal knowledge and tacit judgment, not physical waste, so it can't be pulled out with clever financial engineering or another Kaizen blitz.

The solution is not another SaaS tool. But it is software. To earn the next cycle of returns, PE owners will need to own and control the software that produces decisions, not rent and manage SaaS tools. Renting SaaS, or hiring slideware consultants, still leaves your most valuable data inside someone else's schema while switching costs kill optionality.

But when you own both the P&L and the code, you can enforce adoption, capture every data point, and let the model learn how to optimize decisions to compound recurring EBITDA while de-levering faster. Yes, it's machine learning. What's new is the ownership model: if migrating from your MES, SCADA, or ERP feels impossible, you don't really own your data.

We know PE funds aren’t becoming software shops overnight, and SaaS vendors won’t learn how to run plant ops tomorrow. That’s why we advocate for hands-in-glove partnership: you buy the analog revenue and Plato builds you a software multiple. We build bespoke ISA-95-ready AI modules (standard that governs shop floor integration) to automate labor scheduling, inventory management, and automatic RFQ pricing decisions that still hinge on Excel and instinct for your portcos to which you own the IP.

Our track record with our playbook speaks to our execution and the strength of the platform we have worked so hard to build. Our engineering teams are solving some of the most difficult problems at the intersection of the physical and digital worlds. Because of this, I want to close with my commitment to you: our results will show on your P&L in 100 days. Guaranteed.

The next decade of industrial PE will be won by owners who treat data as working capital and code as plant equipment. We’re ready to bolt this code onto your portfolio, put boots on the shop floor alongside your operators, and let the results speak for themselves.

Brandon Dey

Co-Founder & CTO

Plato Industries Inc.