While on-demand manufacturing represents a $2 trillion slice of the $35 trillion of global manufacturing pie, it is a fragmented, inefficient market. This makes it ripe for optimization through digital commerce.
In a keynote address at Digital Commerce 360’s EnvisionB2B Conference & Exhibition in Chicago on Thursday morning, Randy Altschuler, chief executive of Xometry Inc., an online marketplace for on-demand manufacturing, talked about how the marketplace is using data to match buyers looking for an on-demand manufacturer and provide them with an instant price quote. Launched in 2014, Xometry connects thousands of manufacturers with more than 10,000 customers, including BMW AG and General Electric Co.
“Pricing can take hours, even days for buyers looking for on-demand manufacturing, because they have to contact multiple manufacturers to determine price and lead times for their products,” Altschuler said. “We use data to create instant pricing for suppliers and buyers.”
Proprietary pricing algorithms
Xometry’s secret sauce for determining instant pricing, Altschuler said, are proprietary algorithms the use artificial intelligence to develop accurate pricing for on-demanding manufacturing. The algorithms analyze the features of the product to be built. They then compare them to products with similar features to determine a price.
“Pricing is a hard challenge, and more data reduces the risk of pricing red herrings,” Altschuler said. “What we do is give manufacturers a price they can use to win the job.”
To receive a price quote, a buyer on the Xometry marketplace, such as a BMW engineer, uploads a 3D computer-aided design model of the product it needs manufactured into Xometry’s online quoting engine. Next, the buyer selects several criteria including the manufacturing process, the material such as aluminum or polycarbonate, and the type of metal finish or other special treatments. Within minutes, Xometry uses its own data on the manufacturing costs to quote a price.
Xometry then forwards the customer’s order to a manufacturer in its network that its platform recognizes as most suitable and available. The manufacturer then decides whether to accept the order.
“All use cases are slightly different. There’s the material used to manufacture the item, the finish,” Altschuler said. “Being able to get an instant price quote solves a lot of problems for buyers and helps manufacturers optimize their production capacity.”
Having access to a marketplace that helps optimize production capacity is important in the on-demand manufacturing space. Many small and mid-sized on-demand manufacturers are overly dependent of local customers, which limits their potential customer base.
“For us, it’s important to understand where the pain points are for sellers, as well as buyers,” Altschuler said. “We are a technology company at our root and will always take that approach.”
With many buyers struggling the past year to overcome disruptions within the supply chain, Altschuler said a marketplace like Xometry can help buyers achieve supply chain resilience by enabling them to find manufacturers with the capacity to fill their order.
“We have manufacturing capacity here in the United States, but the challenge for the manufacturers with capacity is connecting with buyers,” Altschuler said. “A marketplace like Xometry helps buyers identify where pockets of manufacturing capacity that fits their needs exist.”
For manufacturers, the benefit of a marketplace that helps buyers find a manufacturer with capacity enables them to improve the buyer experience.
“As a marketplace, the more you provide value to buyers and manufacturers, the more likely they are to stick,” Altschuler said. “Our gross margins are growing because out data is more accurate.”
Peter Lucas is a Highland Park, Illinois-based freelance journalist covering business and technology.
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