Online solution unites buyers, suppliers in sourcing marketplace

Sourcing quality parts from local shops was once a difficult endeavor for Electromechanica, a Boston-based electromechanical engineering service. The company could not find the custom parts it needed for a fair price in the New England area, so it turned to MFG.com at a colleague's recommendation. “Once we found our first part on MFG.

08/01/2007


Sourcing quality parts from local shops was once a difficult endeavor for Electromechanica , a Boston-based electromechanical engineering service. The company could not find the custom parts it needed for a fair price in the New England area, so it turned to MFG.com at a colleague's recommendation.

“Once we found our first part on MFG.com, we were hooked,” says Karl Edminster, president of the six-year-old service organization. “Now we source 100 percent of our products through MFG.com. We added value to our products and have been able to control our prices. We also saved an enormous amount of manpower.”

MFG.com is an online marketplace for manufacturers, sourcing professionals, and engineers looking for custom parts. More recently, the site has added standard parts. The marketplace allows both buyers and suppliers to perform searches and manage the request-for-quote (RFQ) process.

Electromechanica sources many kinds of low-volume precision parts for its business, which involves designing functional test equipment for manufacturers. “We generally need a small number of parts, but with a fast turnaround,” says Edminster.

Until a year ago, Electromechanica relied on word-of-mouth to find parts, which limited its reach to a few local shops.

“There was no effective way to target machine shops out of our area for the work we needed. But with MFG.com, we identified vendors with high-quality parts, and established solid relationships with a number of suppliers. We increased our business almost 20 percent since using MFG.com.”



"
It takes a lot of work for suppliers to prepare quotes, so we confirm buyers and ensure good quality."
—Mitch Free, CEO, MFG.com

A template is used by buyers to plug in attributes on MFG.com, and suppliers set up search filters to describe the jobs they are looking to accept. “A supplier might explain the type of bearings it sells, for example, or say it wants to stay within a certain zip code or sell only certain quantities,” says Mitch Free, CEO, MFG.com. “Buyers publish RFQs with attributes and discover suppliers they never knew existed.”

Suppliers pay a $5,000 yearly subscription fee for MFG.com, and buyers are not charged for use of the system. The marketplace currently includes 3,100 suppliers and approximately 61,000 buyers. Users come from the machining, modeling, fabrication, and metal casting industries. The most sought-after standard parts are valves, motors, and fasteners.

MFG.com decided not to include a catalog or directory because it offers little value to either party, according to Free.

“Hosting catalogs isn't very appealing because it relies on suppliers to keep content updated, so it quickly becomes obsolete,” says Free. “Buyers do not like to look through catalogs to find what they need. They usually know they need a motor with a certain shaft size or horsepower, and they don't really care who the manufacturer is or where the item is located.”

All RFQs released by the system are thoroughly checked by sourcing engineers at MFG.com to verify specifications and ensure buyers are legitimate. “It takes a lot of work for suppliers to prepare quotes, so we confirm buyers and ensure good quality,” says Free. “We also welcome newcomers and explain how to use the system.”

MFG.com also displays buyer award patterns, which details all RFQs awarded and whether buyers chose low or high quotes.

Right now, MFG.com is merging technologies from Sourcingparts.com , a European-based on-demand sourcing marketplace, which it acquired last year. When fully integrated, the system will be both multilingual and multicurrency, allowing the solution to reach a more global audience.

Web exclusive:MFG.COM opens China Sourcing Resource Center

On July 1, China reduced or eliminated value-added tax (VAT) rebates on 2,831 products for suppliers in China, causing an immediate rise in prices for a range of manufactured products made in China.
MFG.com , a global online marketplace serving the manufacturing industry, has a new online resource center to help sourcing professionals, engineers, and manufacturing suppliers better understand the implications of the changes to China's tax laws.

"The rules have changed and those involved in any aspect of the purchasing process—both in China and around the world—have to understand how they will be affected," says James Jin, VP, MFG.com China. "Our resource center gives the manufacturing community the background they need to make decisions about their global sourcing processes."

The free online resource center, available at www.mfg.com/chinasourcing , includes:

1) An executive briefing series covering the recent changes to China's tax laws for both sourcing professionals and manufacturing suppliers; as well as

2) An audio recording of a Webinar analyzing how VAT rebate changes on manufactured products will impact Chinese export prices, the result of high commodity volatility on the "China price," and how to think about China sourcing and global sourcing initiatives today; and

3) Executive briefs and white papers written by MFG.com and Aptium Global sourcing experts:
-- Sourcing From China: Everybody's Doing it So Why Should We?
--The Impact of Global Sourcing on Total Cost
--Crawl, Walk and Run -- The Move Offshore
--Lean Sourcing: Creating Sustainable Purchasing Savings





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