Looking to become indispensable to the OEM component-sourcing and procurement process, MfgQuote.com today extended its online marketplace with a new service to enable product engineers, purchasing managers, and suppliers to work more collaboratively during the design phase of the product lifecycle.
Since early 2000, MfgQuote.com has offered OEMs the ability to freely use a secure website to create and manage requests for quotes (RFQs) and bids from suppliers of components used in CNC machining; metal stamping; forging; plastic molding; metal fabrication; and metal casting. Over 43,000 engineers and buyers are registered members of MfgQuote.com; 30,000-plus suppliers are registered in the site's database, 1,700 of which have paid listings, according to Mitch Free, CEO of the Atlanta company.
The new collaborative service enables users in the manufacturing industry to create linked accounts for sharing intelligence on key design and business requirements that can be used to produce RFQs, respond to suppliers' bids, and evaluate quotes, Free said. This includes data such as preferred/approved suppliers lists, blacklists, eBay-like buyer-provided supplier ratings, and supplier histories. Users can also annotate supplier profiles, RFQs, quotes, and quote actions (award, decline, negotiated, etc.) to effect closer collaboration, he added.
After quotes arrive, users can create shared project folders to store rolled-up, projected, per-unit costs for all components. The service also offers built-in reporting tools to enable users to perform on-the-fly "what if" scenarios. Moreover, users can export data to an Excel spreadsheet or move purchase orders into their ERP systems if they've completed the requisite mapping of data fields, Free said.
In addition, users of the service can invite both existing and new suppliers to participate in RFQs, even if they are not members of the MfgQuote.com network. (Only invited suppliers can provide quotes, however.) Moreover, to maintain confidentiality, users can ask potential suppliers to digitally sign non-disclosure agreements before accessing drawings and documents.
Importantly, the service provides a system-generated audit trail to help users keep track of all sourcing events.
Lora Cecere, an analyst with AMR Research Inc. (Boston), said the new collaborative service provides enough process innovation (i.e., workflow and user interface design) to enable time-challenged design engineers and purchasing managers to streamline the bidding and buying process. These enhancements, coupled with MfgQuote.com's existing supplier-ratings, help to distinguish the service from its competitors, she noted.
The user ratings "allow users to see [supplier] credibility and get a short list of who can be trusted," Cecere pointed out -- critical tools for meeting tight deadlines and maintaining design integrity.
The new collaboration service is expected to help manufacturers reduce product sourcing costs and time to market while increasing product quality and customer satisfaction, Free said. It does this by leveraging the "collective intelligence" of the organization and eliminating information silos to facilitate better design, pricing, and delivery decisions that result in more profitable products.
"Engineers can now begin to design parts for profitability rather than just manufacturability -- who cares if you can make something, if you can't sell if for a profit?" Free said.
That doesn't always translate to purchasing from the lowest bidder, Free pointed out, but doing business with the supplier with the best quality, quantity, and/or reputation.
At least one user concurs. Brad Sheppard, senior manufacturing engineer at Corning Optical Fiber in Wilmington, NC, said his plant has been using MfgQuote.com for the last year to source parts used in traditional machine milling and has experienced "dramatic" product sourcing cost reductions. "On average, in my experience, we have seen savings of 30% to 50% on parts," Sheppard said, noting that he and his co-workers have conducted transactions valued in the "strong six figures" over the last year.
He attributed the savings, in part, to the network's ability to expand the base of qualified suppliers beyond his plant's local geography (though Sheppard is still buying domestic parts), and to a more streamlined bid-and-buy process that eliminates time-consuming one-off supplier interactions and cumbersome manual processes.
Sheppard hasn't used the new collaborative service, but said he is intrigued. As a design engineer, he is involved in specifying and purchasing custom parts; the purchasing department handles commodity parts purchases. While his plant isn't suffering from a lack of interaction (the purchasing department approves of his use of MfgQuote.com), he can envision a time when MfgQuote.com could be used by both design engineers and purchasing managers across Corning's far-flung operations to share and codify vendor insights and experiences that are currently communicated via word of mouth.
While MfgQuote.com's features, functionality, and customer service have "surpassed" his expectations, Sheppard would like to see the some minor creature features added, such as a graphical display to highlight the distribution of quotes.
One thing MfgQuote.com users can expect in the second quarter of 2006 is tighter integration with external systems, starting with SAP's ubiquitous ERP environment, Free said. "Users will be able to access and pass into our marketplace [and] never know they left SAP," he said.
It's the sense of community, intuitive site design, and supplier transparency that keep users coming back to MfgQuote.com -- and keeping the service profitable, Free said. Another factor, he pointed out, is the not-so-subtle shift that empowers buyers to identify and qualify suppliers during the specifying and bidding process, which prevents them from being subjected to unsolicited supplier pitches, Free said.
While many online sourcing marketplaces and Web-enabled procurement services have come and gone over the last decade, MfgQuote.com has persevered by focusing on the evolving business needs of manufacturers. Other services failed because "they were selling technology," Free said. "We give manufacturers what they need -- chances are they do not need all [the procurement management] functionality available elsewhere. Since that's the case, why should they spend any money at all?"