Parts on demand

How Xometry leveraged a B2B marketplace to backfill disrupted supply chains

William J. Holstein
6 January 2021

5 min read

When the COVID-19 pandemic forced manufacturers worldwide to find new suppliers for crucial parts, many of their online searches led to on-demand, custom-manufacturing specialist Xometry. Compass spoke with Bill Cronin, chief revenue officer, and Hunter Guerin, product manager, about how Xometry’s involvement in an online B2B parts marketplace helped the six-year-old company meet the global challenge.

Compass: How did Xometry get started?

Bill Cronin (Image © Xometry)

Bill Cronin: Our cofounder, Randy Altschuler, is a serial entrepreneur who got very interested in the world of manufacturing and how to help product designers get custom-manufactured parts while helping small manufacturers build their businesses. Xometry is all about helping connect supply and demand in custom manufacturing. Engineers and designers upload a CAD file of their part and we give them an instant price. Then, the part is delivered by one of the thousands of manufacturers on our network. It could be delivered by a machine shop in Idaho or one in China, based on the customer’s desired specifications.

How big a company is Xometry now?

BC: Our headquarters is in Maryland and we have offices in Los Angeles, Munich and Lexington, Kentucky. We are now close to 400 people and we continue to grow quickly.

This year, Xometry became “certified” by that online marketplace you mentioned. What does that mean?

Hunter Guerin (Image © Xometry)

Hunter Guerin: It means that it’s even easier for people to get an instant price quote from within the marketplace. They don’t even have to leave the platform where they design their part models to request a quote. We meet the customer where they are.

Because of our model, we have a wide range of services, including 3D printing, machining and sheet metal work, plus injection molding for plastics. We have customers that include BMW, General Electric, Bosch and Dell. Aside from automotive, we’re also active in the aerospace and medical fields.

BC: The other practical effect of becoming certified was that previously, customers could get instant pricing only for 3D printing or additive-manufactured parts. But, by adding our Computerized Numerically Controlled (CNC) capabilities, we were able to offer subtractive manufacturing as well. That’s important to many manufacturers. They’re looking for either metal or plastics for a certain job.

If designers and engineers can get prices on parts so quickly, what does that mean in practical terms?

HG: Everybody’s speed to market is getting faster. We spend a lot of time helping our customers understand the price of something while they are still designing it. That can be incredibly valuable knowledge. They can get feedback on manufacturability and go through different iterations of the part until they get it right. Then they click on a button and the part can be delivered as early as the next day.

And they’re better able to respond to disruptions like the pandemic?

BC: Yes. Xometry’s distributed manufacturing approach has been well-suited for a year of supply chain disruption. We first saw the disruption in China during January and February when many companies were unable to get the orders. So companies in Europe and the US were looking to quickly reshore a significant amount of work.

We had aerospace companies, for example, trying to gear up to work on COVID-related projects like temperature-measurement devices or ventilator parts or masks. We worked with a company called ClearMask. It got started with a woman who couldn’t understand doctors speaking to her through masks during surgery, so she designed a mask that would allow her to hear them better. They’re now selling millions of these masks.

“Everybody’s speed to market is getting faster. We spend a lot of time helping our customers understand the price of something while they are still designing it. That can be incredibly valuable knowledge.”

Hunter Guerin, Xometry

To do things like this, companies had to rapidly build new supply chains for high-demand products and learn to manufacture them very quickly. They needed immediate access to capacity. In some cases we even used multiple manufacturing facilities to maximize speed.

We’ve also helped our small manufacturers survive by helping them with their cash flow. This summer we started providing a payment card to provide payment for 30% of a job upfront when one of our manufacturers takes a job. This gives them the flexibility to buy needed materials to do the job without affecting their cashflow. It’s been very well received by our manufacturers.

Sounds like Xometry’s presence on the marketplace was exactly the right concept at the right time.

BC: Distributed manufacturing, flexibility of supply chains and being able to buy things online are all trends that were already happening, but they have accelerated in a massive way this year.

What other examples can you cite of things you’ve been able to achieve recently?

HG: There was a big trade show recently, and the organizers wanted to unveil special wheelchairs for children that were dressed out like superheroes. The chairs were souped up to become experiences that brighten someone’s day. The project was called Magic Wheelchair. But 24 hours before the show was scheduled to open, on a Sunday, the wheelchair maker realized a supplier was not going to be able to make the delivery date. So we got the specs and put it out on our network and had the parts printed and delivered the next day, before the wheelchairs were scheduled to be presented. We got it done over a weekend.

How can you do this so quickly? A great amount of technical detail must be exchanged among a customer, yourselves and a manufacturer to get a real, binding price quote, right?

BC: The communication between customers and Xometry for file exchanges is seamless. The marketplace has a tool, a communications section, on every request. We are able to reach out to a customer to ask questions about their order. You can exchange screen grabs of a model. If you need to collaborate on design changes to make the model manufacturable, you can do that easily in the comment thread.

HG: We have a team of dedicated engineers we call customer-happiness and customer-success representatives, who work with customers through that tool on the marketplace. Then, after the order is placed, the customer receives status updates, such as a tracking number when the parts ship. We’ve connected all that seamlessly to our own internal processes to automate the transfer of status updates from our internal system into the marketplace.

Roughly 20 years ago, automakers talked about creating a common computerized platform where they could source parts. And now it sounds like you and the marketplace are making that concept of a “frictionless marketplace” actually work.

BC: That’s fair to say. Our head of operations came from Magna [a Canadian automotive parts company]. When he first saw what we were doing, he said, “Wow, this is the type of stuff we’ve been trying to do for years.” He was amazed at the speed we were able to add to the process.  What used to take days and weeks took only seconds, and the prices were very low.

HG: We’re addressing issues that have been there for years. Our ability, via the marketplace, to help condense those time periods and bring pricing into the process earlier makes designers even smarter about the ultimate cost of what they are designing. We’re not just providing the price. We’re going to find the capacity within our network. There may be a lot of people who can make the part, but can they start on it today?

How does machine learning fit into what you’re doing? Have advances in the artificial intelligence field helped advance what you’re doing?

BC: We have highly sophisticated machine learning that chooses which suppliers a project is presented to, based on their capabilities and behavior. We are, in effect, predicting the price that we expect from our network based on a range of data, including the behavior of manufacturers who have done parts like this in the past. We are constantly improving our algorithms. Every time people come in and use us, our process is getting smarter and smarter.

Click here to read online marketplace expert Benoit Schildknecht explain how the experiences of industrial buyers during the COVID-19 pandemic may change sourcing forever.

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