Manufacturing-as-a-Service is starting to gain momentum and has the potential to disrupt the world of EMS, promising greater control, agility and a frictionless purchasing process. Companies in this space have raised a good deal of interest from buyers and investors alike. One such company is MacroFab and we caught up with their CEO to learn more about their offering. The discussion continues in Part Two of the interview. Here is Part One, if you missed it.
EMSNOW: In your announcement, you talk about Elastic Factory Capacity, what is that?
Elastic Factory Capacity brings cloud capabilities to electronics manufacturing. As our factory network grows, our customers gain the ability to tap into virtually unlimited factory capacity and always rely on MacroFab to be your manufacturer. You deal with one team, one software platform and one point of accountability. MacroFab is always responsible for the quality of our work and we guarantee the results. Elasticity is important for factory selection as well. When factories get busy, smaller orders often get bumped in the production schedule when working with traditional contract manufacturers. With MacroFab, your order will be routed to the best possible factory with availability without spending months renegotiating your factory contract.
Elasticity works both ways, MacroFab customers gain elastic capacity, allowing them to grow and contract their production to suit demand. Conversely, we provide our manufacturing partners with elastic demand, allowing them to take advantage of low overhead business to tune their utilization.
EMSNOW: How can this digital platform for manufacturing ensure quality and on time delivery?
We have more capacity than most manufacturers and multiple options for production. So, our customers are never tied into a single factory where their orders may get bumped and delayed. Simply put, because we virtualize orders, we have a lot more options when our customers need their order done on time. We have even split orders between multiple factories, allowing us to deliver faster than anyone else.
Quality for us is a very rigorous process. First, quality delivery is one of the factory ratings which allows our partners to get more jobs over time, so our platform naturally routes work not just to the right factories, but to factories that have a good quality record. Second, we have very clear set of guidelines for MacroFab driven quality standards and we have the capability to test to customer specifications with every factory we work with. And lastly, we double QC most of our orders, so quality checks are done at each partner factory and once again at MacroFab HQ.
EMSNOW: I can see how this works at lower volumes, but as volumes increase, who selects the manufacturing partner and who ensures quality and delivery?
The biggest question we get is – how can this possibly work when my design is highly specialized, I need predictability in my manufacturing processes and I must be certain I work with factories which have the right capabilities and certifications. These criteria are considered by our algorithms when we do factory selection, and customers with sensitive designs actually pre-approve a certain number of factories qualified to handle their work, so we don’t expect customers to give up control. In fact, our model allows our customers to choose just the right level of control and the right level of elasticity.
We have customers who initially lean towards selecting just one factory, but ultimately, they realize that because MacroFab is the manufacturer and that our software and team handle so much of the factory interaction, pre-approving a small number of factories is the right decision. After all, you want your manufacturing process to be as resilient as possible.
EMSNOW: How have EMS companies responded to your service?
Any time you have an Uber-like disruption, there is skepticism from the suppliers about the model, but universally the response from our partners has been great. Manufacturing is such a high-touch service, MacroFab can only truly be successful if both our customers and our factories are successful. So, we spend a lot of time to make sure we get things right for our factories. For example, there are some software releases purely for factory facing functionality based on feedback we get from our partners.
There is a reason our Net Promoter Score averaged 56 last year and has been above 75 this year – it’s hard fought. We aren’t perfect, but we have to deliver the best experience for customers and partners. So, we’ve build that obsession with service into the DNA of our business.
About the author: Misha Govshteyn is the Chief Executive Officer and serves on the Board of Directors at MacroFab, the first digital marketplace for electronics manufacturing. Prior to MacroFab, Misha co-founded and helped build Alert Logic into one of the largest SaaS companies in the cybersecurity industry. At Alert Logic, he served as founding CEO, CTO and Chief Strategy Officer, leading several R&D, security research and corporate development efforts. Under his leadership, Alert Logic became one of the earliest cloud security providers with thousands of customers in AWS, Azure and GCP. Over the years, he mentored several successful startups in the Techstars network, primarily focusing on product and go-to-market strategies.