Aiming to be the Amazon of On-Demand Manufacturing

In February 2018, when Dassault Systèmes, the parent company of SolidWorks, launched its ecommerce platform 3DEXPERIENCE Marketplace, the company said, “Our ambition is nothing shy of transforming the industrial world similar to the way companies like Amazon transformed the retail sector.”

Dassault Systèmes is certainly not the first to aspire to become an Amazon-like entity for manufacturing. Although the company has a long history in CAD, simulation and product lifecycle management (PLM), in the field of on-demand manufacturing, it must compete with younger but earlier players like Xometry, Fictiv and Protolabs. 

Some of these companies started out as portals catering to the inventors and hobbyists with low-volume orders that traditional manufacturers would rather ignore than fill. Others began by providing a single type of production. But many have outgrown their humble origins over time.

Fictiv was founded in 2013, a mere 6 years ago, but last May, after securing U.S. $15 million in Series B funding, the company opened a China-based division and launched its Agile Manufacturing Solution (AMS), which expanded Fictiv’s product offering beyond prototyping into production volume injection molding and computer numerical control (CNC). Last month, the company closed a $33 million Series C funding round to accelerate its transformation into a global digital ecosystem to enable fast, flexible hardware product development and production.

Also launched in 2013, Xometry now counts carmaker BMW and NASA among its customers. According to the company, it now serves nine out of the top 10 Fortune 500 aerospace companies, and 44% of the Fortune 500 automotive and auto part makers.

Protolabs started in 1999 as an injection molding company and a few short years later added CNC machining to its line of service. In 2014, Protolabs began offering industrial-grade 3D printing services and added sheet metal fabrication in 2017 through the acquisition of Rapid Manufacturing. Today, the company operates 12 manufacturing facilities (seven in the U.S.) as an on-demand prototyping and production part producer, with turnaround times as fast as a day.

Dassault Systèmes’ 3DEXPERIENCE Marketplace is a sign that CAD and PLM vendors now see an opportunity to get a slice of this on-demand pie and want to become part of it. But can they convince the current leading players and service providers to join them or come under their wings?

More Than Matchmaking

A manufacturer dating as far back as 1999, Protolabs has the experience and history to deliver on-demand manufacturing from its own facilities. By contrast, Fictiv and Xometry rely on a network of manufacturing partners to fulfill the orders that come through their online system. But to characterize them as a buyer-vendor matchmaking site doesn’t fully capture the breadth of their services.

“First, we provide instant pricing via our platform, determined by our own pricing algorithms. We also provide manufacturability feedback to help customers understand how digital designs translate to physical parts,” says Dave Evans, Fictiv’s co-founder and CEO.

“Once the order is placed, we intelligently match orders with the right manufacturer for the job,” he adds. Post-order, there are several Fictiv employees working behind the scenes to ensure parts are made on time and to the customer’s detailed specifications. This includes quality control engineers, customer success managers and technical project managers who communicate project details to our manufacturing partners. Fictiv takes responsibility for part quality every step of the way to guarantee customer satisfaction.”

Consolidation and Expansion

In July 2018, while adding $25 million to its coffers from a fresh round of funding, Xometry acquired a smaller competitor, the Kentucky-based MakeTime Inc. As a result, Xometry added MakeTime’s network of 1,000+ suppliers to its own, boosting the size of the Xometry network considerably.

“Companies like BMW and GE were customers of ours before they became investors,” says Bill Cronin, chief revenue officer, Xometry. “But we also work with a wide range of young businesses, design and engineering firms in the midrange. We don’t have a minimum cost for an order. You can order a single part for as little as $5.”

Early this year Xometry launched an initiative dubbed Xometry Supplies, making it easy for the 2,500+ manufacturers in its network to acquire the Aluminum 6061-T6, tools and supplies they may need after accepting a job. With this, the company goes beyond on-demand manufacturing, dipping its toes in raw materials and tooling.

As Xometry moves into a new domain, Fictiv expands to Guangzhou, China, which resulted in the launch of its Agile Manufacturing Solutions, described as “a suite of production manufacturing services for supply chain and engineering teams who need fast, quality end-use parts at high volumes of 100 to 500,000 units.”

“Fictiv employees in its China HQ inspect and onboard manufacturing partners work directly with customers to ensure design requirements are clearly communicated, and are on the factory floor during production to ensure things are running smoothly,” says Evans. “In addition, Fictiv requires all of its manufacturing partners (in the U.S. and overseas) to complete quality checks with documentation for every order. Finally, Fictiv has its own quality assurance team, which analyzes parts and does quality checks before parts are shipped to the customer.”

With a U.S. and China-based network, Fictiv can offer users some overseas choices that are economically advantageous. However, the advantages are also tempered by concerns over the current trade tension between the U.S. and China, specifically on how the this-for-that tariff measures affect procurement.

“We just launched our fourth annual State of Hardware Survey and early results show that over 65% of respondents experienced increases in material and component costs, over 18% have experienced project delays and almost 5% have had projects cancelled altogether due to tariffs,” says Evans. “We believe this makes a strong case for the need for a globally distributed network of vetted suppliers that’s easily accessible through the cloud, to help companies be more agile and defensible in response to this type of political disruption.”

CAD and PLM Vendors Move in

In February, delivering his keynote address to the SolidWorks software users in attendance at SolidWorks World, company CEO Gian Paolo Bassi said, “We want to offer you this amazing concentration of knowledge, technology and know-how. We call this 3DEXPERIENCE.Works [3D Experience dot Works].”

A key component of the new 3DEXPERIENCE.Works is the 3DEXPERIENCE Marketplace, a portal for on-demanding services. By the company’s own count, the network now includes 180+ manufacturers, offering processes such as 3D printing, CNC machines, injection molding, laser cutting and sheet metal design.

Xometry is a 3DEXPERIENCE Marketplace vendor. “Customers have different channels to gain access to us. So this is another channel,” says Cronin.

On the other hand, Fictiv is not part of it. “Fictiv does not belong to any such marketplace and does not plan to join in the future,” says Evans. “Our vision is to build a single destination for manufacturing needs from prototyping to production.”

Xometry offers plug-ins for SolidWorks and its rival, Autodesk Inventor. The software-embedded connection allows SolidWorks and Inventor users to perform manufacturing checks and cost analysis early in the design process, from within the CAD software itself.

Autodesk, on the other hand, doesn’t seem to be in a hurry to build and launch its own on-demand portal. “Our vision is to continue to support an open development environment so that [on-demand manufacturing vendors] can develop their connectivity solutions directly to the Fusion 360 platform and deliver an experience that makes sense for their customers,” says Patrick Rainsberry, senior manager of strategy for Autodesk Fusion 360 and EAGLE products.

Connected to the Factory

Somewhere in the mix are vendors like Plethora, which belong neither to vendor-run networks nor buyer-supplier matchmaking portals. But Plethora shares some characteristics of these portals that result in ease of use, such as a highly automated submission and order system and CAD-connected manufacturability check tools via plug-ins.

Ordering a part to be manufactured is not as simple as ordering something already inside an Amazon warehouse, waiting to be packed and shipped. “It requires a lot of back-and-forth between the tool that the user designs the part in, and the factory that will make the part from the design,” explains Ben Mitchell of Plethora.

CAD-specific plug-ins from Plethora and Xometry can verify and check whether the part as-designed can be manufactured or not. Though they don’t involve CAD-embedded plug-ins, Fictiv’s and Protolabs’ online quoting systems also perform automated manufacturing checks in a similar fashion.

But the next part is a bit more complicated. “Assuming you can manufacture it, the next step is, when can you deliver it and how much should you charge?” says Mitchell. “To answer that, you need to know the materials you have in inventory, how long will it take you to order the materials or the tools you need to make it; and also, what [does] the current production pipeline in your factory look like.” Being an independent operator, Plethora has access to such insider data and can respond to quotes more accurately, Mitchell notes.

Technically, nothing prevents Plethora from joining a buyer-supplier matchmaking site or a vendor-run network. But Mitchell says the company so far hasn’t felt the need. “We feel going to Plethora directly is a better experience than going to Plethora via another platform,” he says.

Certified Additive Network

Last April, Siemens PLM Software, a division of the manufacturing giant Siemens, announced the launch of Additive Manufacturing Network (AM Network). The company first hinted of it as a concept at Hannover Messe in 2017. In the press release, the company described its offering as “a new online collaborative platform designed to bring on-demand design and engineering expertise, knowledge, digital tools and production capacity for industrial 3D printing to the global manufacturing industry.”

“We’re working with mostly vendors from the industrial domain,” says Robert Meshel, director of AM Network, Siemens PLM Software. “In this area, unlike business-to-consumer transactions, the matchmaking element is not that critical. Most manufacturers are already working with certified vendors.”

Whereas startups, hobbyists and small design shops without a dedicated supply chain may need to rely on Fictiv, Xometry, Protolabs, Plethora and other on-demand vendors, the situation is the reverse for large manufacturers, Meshel says.

“With these customers, if they need to order 100,000 to 150,000 parts, they already have a list of approved vendors to go to. And it costs a lot to certify a vendor, so the appetite to add new vendors is not high among them,” says Meshel. “It’s more about facilitating and orchestrating the entire process with full traceability.”

In the long run, Siemens PLM Software could expand the network to cover more than AM vendors, but for now, AM appears to be “digital manufacturing in its purest form, and there’s still a lot of work to be done in this area,” says Meshel.

The Siemens AM Network recruits and brings onboard AM service providers its customers are already using. Therefore, it’s much more selective in its vendor recruitment. “Some customers start with a relatively low volume in AM, but grow the volume exponentially,” Meshel says. Siemens PLM Software hopes such customers would use its cloud-hosted AM Network to manage the growth, from order to shipment.

Filling a Need

Portals and vendor-operated networks offer value as a convenient means to compare prices and order parts from a trusted pool of providers, eliminating the need for businesses to individually investigate local and overseas machine shops to identify the most suitable partners. They empower an underserved segment—inventors, hobbyists, small shops and even divisions within larger enterprises—that have creative concepts but previously didn’t have a means to turn them into tangible products.

But to become the Amazon of on-demand manufacturing, one has to offer a broad spectrum of services and choices that far exceeds one’s rivals and independent operators. Currently, there’s no such clear leader in the segment. In time, consolidations, partnerships and acquisitions may lead to one clear dominant player.

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