Recently, I had the opportunity to speak with Dr. Ron Hollis of MFG. We discussed the various options available to engineers and suppliers for part production in today’s workspace.
The interview is below, and a transcript follows.
Leslie: Welcome to executive edition. I’m Leslie Langnau with Design World Magazine. In today’s episode, we are speaking with Dr. Ronald L Hollis, president and CEO at MFG. Ron has been involved in product development for 29 years. He began his journey in 1990 working as a design engineer for the Boeing company on the international space station. His hatched track design is currently floating in space. He discovered advanced design technology including the birth of CAD solid modeling in 1990 and then stereolithography in 1992 and these changed his life. Ron became passionate about making product development more efficient, mostly driven by the slow approach of NASA and the giant wall that existed between engineering and manufacturing and he fell in love with manufacturing. As such, his professional pursuit has been to leverage technology to make product development faster. This pursuit was realized with the development of quick parts.com a business that changed the way engineers buy low volume parts, by allowing online instant quoting and buying parts over the internet. This is the way today, however, in 1999 this was a dream that wasn’t possible.
Leslie: From there Quickparts.com continued to shake up the product development world by making it easy for designers to accelerate their design process by getting parts fast. He led quick parts to a successful acquisition by 3D Systems. Now Ron is focused on continuing his pursuit of making product development faster by helping manufacturers grow their business with the power of MFG, a smart marketplace for custom parts. So thank you for joining me today, Ron.
Ron: Oh, thank you Leslie.
Leslie: One of the first questions I want to ask you is what are the differences among various providers of manufacturing production? For example, what are the various business models being used now?
Ron: Well, that’s a great question and the world’s changed actually in the last 20 or 30 years. Your first one of course is the direct manufacturer themselves, which is what’s always existed. I work directly with manufacturers and I build a relationship with those guys and they’re very good at doing something, CNC shop, etc. And do you like to work with them? Yep. Because you’re working with the source, the guy that’s going to be making your parts or products. You can affect their schedule with noise and all that good stuff and you’re able to build a relationship that you can trust and count on. So it’s a great thing to go direct. The challenges these guys have is they’re great to make a part, but they struggle a little bit at marketing so they can be found, and sell so they can build up relationships.
Ron: Direct manufacturing is what we recommend because this is the way to be more highly efficient in your product development process. But you know, the other ways are what we call parts distribution. Companies like Xometry are out there right now and do a great job of aggregating capacity of manufacturers. So I go there and I get a single source for multiple processes, but I struggle to develop a relationship with the guy that’s actually making my parts. I’m just going through a store front if he were a distributor or middleman to get my parts. And there are advantages of that, typically they’re very good at project management giving you information about what’s going on. You pay a price for it, for that convenience, but it’s there. So you also, today, you got direct manufacturing and then you can go through a parts distributor.
Leslie: Any other models?
Ron: Those are the top two that matter.
Leslie: Given these two models, how does an engineer choose between them?
Ron: Right, great question. Again, it goes with what the long-term perspective of the needs of the engineer is. So if they’re early and they’re just building prototypes, “onesy, twosy” you know, a parts distribution is the highest, most efficient way to go. I’m used to an online, so I highly recommend that. It’s when I actually start to increase my buy in. So, I’m starting to produce production level parts, and that’s when I want to start to think about the long-term relationship I’m trying to build with the people that are going to be a part of my product life cycle. And so in those cases, then you start to say, well, maybe I really need that direct manufacturing relationship so that I have a partner to take this ride with me on my product development life cycle.
Leslie: Okay. Then how does MFG fit in with these types of business models?
Ron: Well, we’re different in the sense that it is a unique model with what we’re trying to do. What we believe fundamentally is that we think small to medium size manufacturers are very good at making parts. That’s their core, the CNC shop, machine shop, injection molder, etc. But we also think that the same manufacturers are weak at marketing and sales and so when that happens, they are unable to be discovered by high quality customers, high quality buyers, which is really what they would like to have to grow their business. So when you get into that situation, then what we want to do and what MFG does is we want to resolve that by making it very easy for quality manufacturers to be found by quality customers. So we make it easy for them to be discovered and then to build relationships with each other.
Leslie: Okay. One of the things I’ve heard you talk about is that MFG has a digital approach. Can you explain how that works and how it benefits users?
Ron: Well absolutely, so yeah, the whole world is digital now. We live in the digital age; it’s been that way for a while. So what we’ve done is we’ve actually taken one of the oldest, most efficient ways for allowing a buyer and a seller to find each other. The marketplace, the oldest way right now it’s actually, it’s the beginning right there. Marketplaces are first. So, what we did is we put the marketplace on the internet and we do it efficiently. So it’s highly focused as a cloud base, manufacturing focused marketplace, to make it very easy for buyers of custom parts to efficiently find, discover manufacturers that want to make those parts for them. And so we leverage that technology to do that. And once that discovery has occurred, then we create tools and technologies so that they can build efficient relationships together. So we’re eliminating the friction of going out and trying to find and identify and qualify a supplier. By eliminating all that with technology, we eliminate a lot of that friction.
Leslie: Okay. Then for example, let’s explore the relationship thing a little bit more. What would be the benefits of having a relationship with a manufacturing supplier as opposed to picking a new one each and every time?
Ron: Well, again, it goes with change. So when you’re in a situation where you’re changing your manufacturing partners, then you’re introducing new risk into your product development life cycle. Well, you know, I like to deal with people I know. I build relationships. We go through our challenges together and then over time we know how to take care of each other. Not all customers are good customers and not all manufacturers are good partners. That’s the case. You’ve got to find those who are aligned with your belief and your values and what you expect out of your parts and products. And so that’s where the relationship piece comes in.
Ron: Again, as you move up the product development, life cycle, long-term, more parts, etc. That relationship piece comes in more where you are developing what we call shots, because what happens if I pick, I’m an engineer, design engineer and I go pick a shop because I’m supposed to and I didn’t know where to go. So I go to Google and I search CNC shops in Indiana and I get, John’s CNC Shop, I don’t really know anything about him. And what do I do? I engage him and I hope he’s good and then he comes along and hey, the first pieces are good, I did a good job and then the second shipment comes in, it’s a few days late. Well we look over that, and then the third shipment doesn’t show up right, and the guy’s not answering the phone. Well, what happened? So I get fired, that’s what happens, right? Cause I just cost my company the product getting launched on time, whatever I got to go, start over, etc. So that’s where that trust piece is, that relationship piece. And as consumers even with B to C when I go to a store. I have relationships with the stores I go to because I believe they’re aligned to the values. I believe.
Leslie: You mentioned some of these risk factors, so what advice would you give an engineer to help them manage that risk when working with manufacturing suppliers?
Ron: Have options. I mean that’s the number one thing you want is the ability to know who am I picking, how am I partnering, and then what am I going to do if it doesn’t work out? Instead of putting all the eggs into a proverbial single basket, let’s just versify, let’s distribute by having that.
Ron: Where MFG comes about, what we say is why don’t you go build a relationship with a customer, a company that wants to build a relationship with you. We think that’s very useful, and it is. Obviously, that is, that’s not the way the traditional work world goes and buy parts. And so, if I could post an RFQ, for instance, in our marketplace and want to have 10 to twenty prospects respond to that. Now I’ve narrowed the world down to 10 or 20 people who’ve raised their hand and said, I want to do business with you. They see my profile, they know who I am, where I am and what I am. They want to do business with me. That’s great. Now I can start to investigate, interrogate, and, and really get an understanding of who they are through these 20 shops. Then I narrow that down to two or three, and then as the ones I want to build a relationship with, and then I just create strategies from that to diversify the risk. Maybe I’ll start to split my orders up. Maybe I do multiple, I break up the quantity, etc. It goes with how big the organization is, the shop that I’m using. That’s it.
Ron: That’s a very important part, is we deal with thousands of small shops, and you say, well, you know, what do you think your customer should be? Oh, I know Ford, GE, etc. Well, you have to realize the risk tolerance of a GE. Why would a GE want to go down to a 20 man machine shop in little Indiana? But you know, the risk is too high. So you got to play with people who are in your field and that’s where it gets to be important to diversify that risk by knowing who’s aligned to where I am in my company size and my product life cycle. If I’m a small two man product development company, I need to go deal with small parts manufacturers. We’re in the same level, we appreciate each other more. Whereas if I’m a large product development company, Logitech, or Dell or something, well I got to make sure that I can live up to the expectations for those companies so I can be successful or I’m just going to get highly distracted and damage my business as opposed to grow my business.
Leslie: Okay. As an engineer, you clearly know what an engineer considers important when buying parts. How do you see MFG addressing those needs?
Ron: Well, it goes to a couple of things. In the world today, product development’s fast. It’s moving fast, that means we develop more product. And so the design engineer, now his role has actually shifted in the last 20 years. That’s 20 years ago. You know, he could probably do focus heavily more on his design and do that and transition to manufacturing now, because efficiencies of technology, the role of the design engineer starts to shift, when he’s in a small product development company, while he’s an engineer today, but he’s the buyer tomorrow and that buy cycle really is a function of him. He doesn’t have a procurement department, so he is the guy. And so in that case, what his motivations are is convenience. How can I go and find a qualified supplier efficiently, conveniently easy for me? And then the second motivator is time. You know, he’s more time sensitive because what he’s trying to do is get his product that’s parked on the dock so that assembly can start or whatever so he can get his product down the product development life cycle.
Ron: So convenience and time are important. And so it really goes with the motivation. So, it was like on the other side of the design engineer who works with the larger company that does have a chairman department, what happens is that the volume of the parts that the engineer needs is too low or the buyers are, they’re too busy. They’re more important, so you don’t deal with that. We don’t want to deal with that small quantity, you go deal with it. And the engineer’s like, well he still has his job. So again, he needs convenience and he needs time because he wants to efficiently buy parts. And he’s not a buyer, he’s an engineer who’s developing. But he has to do those roles, cause it’s just the obligation of the environment he’s in today.
Leslie: Okay. What would you like to address that I haven’t asked any questions on?
Ron: Well, let’s see here.
Leslie: That’s a broad question there.
Ron: I think that big question at the end of the day, why don’t, yeah. Say, yeah, you got to go with alignment of values and what MFG does is we provide manufacturing focus market place, which we considered very, very powerful because it’s very efficient where a buyer can go into our marketplace, post one RFQ, create one standardized RFQ and it’s going to go out to our network, our marketplace so that people can access it. Otherwise they would be having to send an RFQ to every supplier that does the part you want. We call it a one to many relationship as the guy who’s bought parts in my life, I love that and that’s probably one of the most exciting things I like about the marketplace on the buy side is that I can do a one to many communication with a market that I need to buy these parts highly efficient.
Ron: The second thing, which is how we reduce risk, is we provide supplier ratings on in the marketplace. So at least you start to have some information from other qualified peers, other people who engaged that supplier. It’s no different than I use TripAdvisor heavily. Every time I travel to a city, I don’t know hotels, I don’t like crap hotels, I like clean. So I want to know what my peers are saying. If they say it’s clean, then I actually care about that. And so that’s the value we think is how do we make it easy again, the convenience for the buyer one to many and then reduce that risk. I like an informed buying decision if you would, as you drive out, you know your product development life cycle, picking your partners and driving up.
Leslie: That makes good sense. So do you have a website that an engineer can explore?
Ron: Oh, it’s a beautiful one, www.mfg.com it’s the best one in the world.
Leslie: Well thank you very much Ron. I appreciate you joining with me today.
Ron: My pleasure.
Leslie: And that’s today’s edition of executive edition.