135. Idea – How to Extend Shop Resources with Manufacturing Transcript
What I think it does best is it utilizes the capacity, that ability to make parts, because there are spindle sitting still right now, there are quiet shops right now. And those people are, feeding their spouse and kids with the earnings that they make in those shops. So the more that we can do to keep them running keep folks employed. Like I want their problems to be managerial problems. I want their problems to be like, “I need to hire someone else, man. Oh, now I need HR.” You know, like, “I’m thinking about my next capital expenditure on equipment.” Those are champagne problems that we want for our manufacturers. Not where’s my next job. And I think that’s one of our goals.
Welcome to EECO Asks Why a podcast that dives into industrial manufacturing topics, spotlights the heroes that keep America running. I’m your host, Chris Grainger. And on this podcast, we do not cover the latest features and benefits on products that come to market, instead, we focus on advice and insight from the top minds of industry because people and ideas will be how America remains number one in manufacturing in the world.
Welcome to EECO Asks Why. Today we have an idea episode, and we’re going to be talking about how manufacturing can extend shop resources, and then walk us through this conversation. We have Greg Paulsen, who is the director of application engineering at Xometry. So welcome.
Hey, thanks for having me, Chris.
Man, I’m excited to have you on board, but I heard you on Manufacturing Happy Hour, and I fell in love with the conversation. I started following you and checking out what you guys did and had to reach out and see you join us.
It’s always awesome to connect with other folks in industry and talk shop.
No doubt. And maybe get a started with Xometry. A lot of our listeners may not know what that is and what you guys do. Could you give us a little background?
Yeah, absolutely. So Xometry, it’s different than how manufacturing has been done historically. It is a technology-driven service also sometimes called manufacturing and service and it was created to help solve some of these problems of procurement, both for a buyer. So someone who wants parts and a supplier, so someone who likes making parts and getting business out of that because oftentimes for these projects, they don’t know each other. That there’s a lot of sourcing and on the procurement end. So if you’re looking to get parts or your engineer, looking to get something fabricated, you’re kind of working with a shortlist of who you may know. Who you think can do that type of job. And oftentimes you’re sending out, a bundled RFQ, maybe blind carbon copies of BCC email.
Can you please call the quantity one, five, ten, twenty-five, fifty. And you wait and you wait and you sometimes will get a response back that’s a, “when do you need it by,” and not necessarily the response you’re looking for, which is pricing and lead time. And also pricing all over the place.
There’s a lot of variability for manufacturers. It’s not really clear why that may be. The whole side of, from the buyer side is this kind of frustration and saying, “I want these parts made, but I also want, the value,” like I want to know the value add. I want some transparency in, that quote side of things. For the suppliers, a lot of times those suppliers maybe, if they’re getting that quote it may not be the best fit for them, or maybe something that is a good fit or something that they may just be at capacity for, so they have to price it differently than they would if they didn’t work that capacity.
And so you see this variability on their side and sometimes they just don’t have the opportunity at all. Shop out in the Midwest may not have access to, my backyard here, NASA Goddard for example, and so it’s just that connection is not made. Xometry essentially put technology right in the middle.
So it is a single platform where both buyers and suppliers interact in this case buyers have experienced where it’s almost like Amazon they can upload their files, get pricing and lead times instantaneously, we actually use machine learning and AI to interpret that geometry and what you’re selecting.
So if it’s CNC or 3D printed or injection molded and it’ll update the base of the scope of that project and update that pricing and lead time. So you just instantly see what you need, and you’re able to start making decisions as a buyer, including buying that part there. And on the supplier side, it’s almost like this Uber or Lyft strategy where Xomentry has connected with over 3000 suppliers. So these are usually small business manufacturers domestically in the US and globally. We have a European branch of about 2000 suppliers and we also have some factories with boots on the ground teams from Xometry in Asia that are all connected to this global network of over 5,000 manufacturers.
What they see on their side as a supplier is work. One work that they can instantly go take a look at the scope of it and will be paired based off their capabilities. So it’s usually within their wheelhouse and they can say, “Hey, I’ll get paid this much. It’s do in this time. If it fits my job. If I have the capacity to do that, I can hit the lead time and scope of the project. Click instant purchase order.”
And it’s that easy. They’re not sending out the marketing teams or business development reps. They’re getting work on demand and the work keeps on coming. So you get a lot of variety a lot of opportunities through Xometry and for us, it’s also, where we become a storefront for our suppliers.
So the more diversity that we have on our supplier network, the more capabilities we can offer. And the more, diverse opportunities the customers can get. So it really becomes this one-stop-shop central place for manufacturing. And we’re that matchmaker hub.
That’s great. That’s a very interesting business model for sure. When you look across the landscape of manufacturing, you know what’s changing the most it’s that you feel like this model could impact and help?
Oh definitely the most relevant is this last year, right? A massive supply chain disruption. You think about a global pandemic. We had, statewide shutdowns, not just localized shutdowns and even right now there’s, there are shops that are down in Texas and customers that are down in Texas, by the way. And moving up here, we just had some ice storms. I’m here on the east coast, around the DC area.
Our HQ is a Maryland here. As these disruptions occur, if you are working with just a local supply chain, if you’re disrupted, they’re probably disrupted too. And that means the work may be delayed or may have some challenges from the supply chain, even shipping, for example. With a distributed manufacturing platform like Xometry.
For the buying side of stuff. It is every day. It’s just undisrupted business. You could go online quote and get your pricing and press buy because we have access to such diverse and dispersed manufacturing networks. So geographically dispersed across the US and even across the globe. If you need access to that we can instantly adapt and make sure that the supply chain just remains almost self-healing. So if you’re, those Texas shops they’re businesses too, they know, “Hey, I’m iced in, I’m unable to work.”
They’re not going to be taking work right at this time. The work may go to somewhere else, but the good news is as soon as those Texas shops get back online, but their customers aren’t yet. They can take work immediately because we’re connecting without any, without necessarily any notion of being geographically located because we’re always, we’re able to ship things, you know, two-day shipping is two-day shipping, regardless of where you are in the US for example.
I mean, that sounds like such a cool model to really help a lot of these shops and these businesses overcome those hurdles, those up and down hurdles and orders, and maybe somewhat just, get a nice steady flow of work and keep the shops busy.
Yeah, absolutely. So it’s work on demand. Xometry also has some really cool options if you are manufacturing a supplier. You could sign on and we have different ways that you could enter the Xometry marketplace. Some of that is that work on demand. So using the job board that we have and we vet you through as a supplier and you get trained up on how to use it, how to track work through that job board.
But every supplier that joins our marketplace also has access so some really interesting shop benefits. So we have things like financial services available that allow you to essentially get an advance on work that you’re taking. So say you do take a job, that’s a $10,000 earning job. We have something called the Xometry Advanced Card that you can use for up to 30% of that credit upfront.
So say you do have a $10,000 job. You need to buy $2,000 of supplies and materials. You don’t have to drop from your bank. Which is sometimes really good, intimidating from a small business manufacturer cause you have other things like payroll and stuff that you really need that bank account to remain steady for.
So this advanced card helps that cash flow and essentially it deducts from the end earnings. So if you are using $2,000 of a $10,000 win the payout at the end, it’s going to be, $8,000,but you’re not affecting your bank account, which is something really important when we think about small business. We think about cash flow and other financial goals. You may have. We could even accelerate pay. We have something called fast pay. That’s available to get something a little bit faster and we’re working on some really cool stuff.
We just launched Xometry pay. This is a whole new beast, by the way, this is I think, between you and I talking, Xometry pay launched. And Xometry pay is a way for shops to have access and kind of security financially for taking things like credit card transactions, purchase orders and getting paid where they may not have the sophistication or e-commerce actually do that. So we’re actually allowing shops to almost reach in and grab some tools that we use internally and use them in their shops as well. So it’s pretty neat.
Cool. Yeah, that sounds very interesting for sure. And I know on our show, we’re really trying to speak to the manufacturers out there, Greg, and I know we were talking before you said, think of it as like an extension of your shop, what does that mean for the manufacturer, for this business model in particular?
Yeah. So actually a lot of our big customers are manufacturers, so they have the manufacturing capacity and there may be very various reasons why you’re using Xometry. Again, a good example, I know someone who does linear actuators and they have a bunch of internal manufacturing to make these actuators and they’re running everything and all their plates are essentially fixed with metric stuff, and it is really disruptive for us dang American customers because they’re looking for standard and inch units. And so they’ll use us particularly for those like inch unit requests to like using interlevel tap holes and different dimensions that fit kind of US-based work. So they’re able to access this market without disrupting their continuous manufacturing lines.
So sometimes it’s just that jobs where it doesn’t make sense to, to almost shut down a work cell, to do the smaller job. It’s it makes sense to source that out with somebody that, can supply the quality of parts that you’re looking for.
Sometimes it’s about capabilities. So you are, you’re a three-axis shop and you’re working on a job and your customers love you, and you want to retain your customer. And they come across with a bid package and for most at work it looks like work that is really fitting for you, but there is job like a fifth axis part, or maybe it’s something just totally different process like sheet metal. And you can actually go and access Xometry.
And I almost think of it as, opening up your shipping garage and there’s another shop back there. And now it’s a sheet metal fabrication center, or now it’s a fifth axis machine, or it’s a 3D printing service and that’s something that we could get access to. So it allows you as a manufacturer to continue to keep your customers happy.
Obviously like you have the additional revenue stream if you’re using us as that job board service, but even from just a flow of work, you’re able to get pricing lead times, respond quickly to bids with your customers and do more diverse work and essentially use us as a, outsourcing partner.
Right. Now, what about the people who are listening, who have a concern around quality? They have quality metrics they have to meet, is that compromise with evaluating a model like this?
Yeah, I think that’s the best question that we get. We, and believe me, we answered this question every day. When we talk about the business model it’s like are you tossing this over the fence? And the answer is no. We have skin in the game when it comes to this Xometry is the supplier for the work.
So we have quality assurance and manufacturing experts on staff. That work with jobs. We do DFM analysis. So that’s designed for manufacturability on work as it’s going through our system. And we work with our suppliers as well to make sure that they’re elevated the tracing through. Xometry is actually very auditable. And by that, I mean, we know where the part’s going, where it’s been, what’s happening, where the second ticks on when the milestones happen, because work is being done on our digital platform.
It also means that we get things like material certifications, inspection reports, images of the parts on our secure platform. So we can always go back if there is a requirement for like NCMR or RMA. And we have formal quality programs in place. Xometry is AS9100. So we do a lot of work for defense and aerospace.
We are ITAR registered. Again, because we do a lot of work for defense and aerospace, and we have an entire ITAR network as part of our larger network. And with that, that also means that we’re also ISO 9001, which is encompassed within that AS9100.
Got it. Cool, man. And I know one, one reason when we were talking, we were brainstorming together. You brought up a customer that we do support and in South Carolina around BMW and I was curious, what could you share there that really benefited BMW? How you guys helped them, because that was a case study, from where we sit at EECO Asks Why for manufacturers that are listening, that I think is, very relatable. And I’m just curious, what can you share about that experience?
Yeah, absolutely. And full disclosure. So BMW has been a customer for quite a while at Xometry. They also were investor. So they were investor after they were a customer. And by the way, this rings true for a lot of our companies that have invested in us.
So BMW i Ventures invested in us. And they were a customer first same with GE Ventures. Bosch and Dell both customers before investing because they really liked this business model. Where our in was with BMW was in tooling and fixturing. So in that North Carolina plant for, I think it’s an X series models as you are installing stuff, so trim or bumpers, other things, there are operators that are doing a lot of handheld operations and there’s entire tooling engineering team that are devoted to creating these really crazy-looking fixtures that hold that specific piece. It allow you to apply it consistently and repeatably every single time. The challenge there is that in order to do this right, a lot of times the tools need to be mixed process.
So for example, the main body maybe FDM, 3D printed which is a large format, 3D printing process. And we can print up to 36 inches in there, but the cool thing is you can change the infill. So essentially the interior of the part to be more sparse. So you’d create a larger structure, but keep it lightweight, especially if these are your handheld or at least augmented handheld units to reduce fatigue.
And that was a big goal for these tooling and fixturing engineers is, you have someone that’s doing this operation, hundreds of times a day, potentially. And so you want to reduce fatigue, which will reduce your error rate, but there’s also parts that just need to be a high tolerance and a stiff, and that requires CNC machining, or you need parts that are soft touch and that maybe a urethane cast part for example, and then you have off the shelf, things handles and other stuff that, like I talked about that this is the big master catalog stuff that they’re working with.
What they really liked about Xometry from the get-go was they could put their entire assembly bill of materials. So all those custom manufactured parts and just drop them into a quote and then select urethane casts flexible, select a 3D printed FDM green cause even things like color coding based off the section and area of the car is really important from their visual quality systems that they have.
And I just press buy. They’re not shooting this out to 12 different suppliers, or they’ll shoot it out to a supplier that offers all these technologies, and we do the supply chain management for them. So we could essentially split that job and make sure it runs in parallel across multiple vetted high-performance manufacturers. So that every time they start this job, no matter how many line items you have, we’re able to start that work essentially next day. So they’re able to get good lead times, good pricing and a high diversity of work without having to do the shopping for them.
That’s pretty cool, man. It sounds like it was a great win-win for everyone.
Yeah, we actually, we see a lot of tooling, jigs, and fixtures like everyday, because as models change, you think about these, like these random contours, all these vehicles 3D printing is really good at hugging those about making those, you know, organic curves, which may be very difficult to traditionally manufacturer at least, or least expensive to because you may need to do surfacing for example and we see a high variety of tooling, jigs, and fixtures coming through regularly through our facility. We do some of that integration, some of that assembly, in our Gaithersburg Maryland facility. So we’re able to essentially get work back there, kit it together, do some light assembly ship those to those parts of the design.
So like I said we have some skin in the game. We were mixed into the business as well. But a lot of that manufacturing prowess, like the work is being done by small businesses and they’re getting paid for it.
Very cool, man. Now you’ve brought up a few terms for our listeners that who from an EECO Asks Why standpoint, we haven’t really covered a lot in 3D printing, additive manufacturing. They really jumped out. You mentioned that a couple of times. Can you break that down a little bit for the people in manufacturing and what you’re talking about, how that can help?
Yeah, absolutely. And it’s really interesting because we do offer all these technologies. So 3D printing is a way of creating a part essentially from a lesser material to more materials. So a filament or a powder or liquid resin and curating it, turning it together. So 3d printing is often called additive manufacturing and it’s a way of growing a part. It’s different than when we think about traditionally making a part through, subtractive manufacturing, which is I take a larger stock of something, and I either, mill, drill, form but I’m taking that stock and turning it into the shape of the final part.
So to bring into spec from like CAD or a drawing with 3D printing, I’m generating this part typically from bottom to top by depositing or fusing materials together. And this is a wide variety of platforms. So it’s not just like one thing is a 3D printer. There’s actually, a dozen different manufacturing platforms plus that do additive manufacturing, but the concept of the same. I’m growing my part, I’m depositing those materials from bottom to top and creating a final net shape. It has this advantage of me not needing to create, up one tooling up two tooling, a specialized fixturing because it’s software-driven and it takes care of itself or of itself within the 3D printing platform.
A lot of times you can just drag that CAD file into your build setup, which is software that we use with your 3D printers and you know, click go on this and then just print and you get your part out of it. So it usually has shorter lead times, usually lower costs on those onesie twosies, like the lower volume manufacturing. And it’s getting more sophisticated every single year. So you can print in plastics. You can print in thermosets. You can print urethanes now. You can print in rubber materials and even metals, and it is a really great option when you’re looking for that low-volume custom. And can even be viable when you’re looking for kind of that what I would call low volume production, where it’s usually on it best on a smaller part, but it’s something that can be produced in higher quantities and volumes which is really exciting when you think about that, in-between, that weird zone that you may find between machining a highly technical service where the talents in that operator and moving towards something more scalable, like molding, like there’s a lot of times the middle ground is expensive and 3D printing really bridges that gap very well.
Now, can it bridge the gap from a prototype standpoint as well?
It is the king of prototyping for sure. King or queen, I’ll say. Probably most of our ins with customers who find Xometry first, it’s an engineer who has made a design, wants to check it out. They upload the file. It’s cheap. It ships in two business days, and they’re able to validate and check out their design, much quicker than traditional processes. So it’s a fantastic prototyping tool. And I’ll say we still see the vast majority of mix work coming through for 3D printing.
But I’ll say every year we look at that percentage of multiple parts orders are like the same part being ordered multiple times through. So that kind of production work or production work coming through. And every year that percentage of 3D printing work that we do that is production increases. So it’s been better adopted by the community for manufacturer products more than it’s ever been. And I’ve been in that industry working with additive manufacturing since 2007. It’s really been unique to see how that’s changed.
No doubt, man you have such a passion for this topic. It comes across in everything you talk about, man, you can tell you that you really love what you’re doing and we call it EECO Ask Why, Greg, to get to the heart of it, the passion, so speak to that manufacturer out there. Why should they embrace these types of resources as they grow into the future?
Yeah, I think what’s really unique about these attribute manufacturing platforms like we do here at Xometry is it gives you access to work that you may not be able to get. And it just has to do with the matchmaking usually by geographic or just knowing companies or the fact that those vendor forums are so complicated and daunting that doesn’t make sense for your shop of five to 20 people to spend, a couple of days setting up and getting an audit in with distributed manufacturing platforms like Xometry we do that leg work, or we’re able to give you work that fits what you like to do, like making parts. You know if you have your brass turning shop. You’re gonna get brass turn parts. You’re a sheet metal fabricator, you see sheet metal work, you see sheet cutting, and you get to keep your laser happy and all that is available with these platforms. And it helps augment your sales cycle as well. So it doesn’t really disrupt it. You’re still a business you’re still able to do the work that you like to do and keep your clients happy, but you can also keep those spindles turning.
What I think it does best is it utilizes the capacity, that ability to make parts, you know, in the US that is out there because there are spindle sitting still right now, there are quiet shops right now. And those people are, feeding their spouse and kids with the earnings that they make in those shops. So the more that we can do to keep them running keep folks employed. Like I want their problems to be managerial problems. I want their problems to be like, “I need to hire someone else, man. Oh, now I need HR.” You know, like, “I’m thinking about my next capital expenditure on equipment.” Those are champagne problems that we want for our manufacturers. Not where’s my next job. And I think that’s one of our goals.
Love the goal and I definitely feel like you guys are doing a great job to support manufacturing, and we’ve learned a lot, for the listeners out there as always go to the show notes for all of Greg’s links to connect with him and Xometry will be there. And Greg, thank you so much for taking the time with this on EECO Asks Why today.
Thanks so much, Chris. This is awesome.
Yes, sir. You have a great day.