A One-Stop, AI-Driven Manufacturing Marketplace
This column has long kept an eye on Xometry, the global on-demand manufacturing platform company based in Maryland. From the very beginning, Xometry’s focus has been on creating a strong ecosystem that helps manufacturing companies of all sizes to increase efficiency and flexibility, reduce costs, and optimize capacity utilization.
In this spirit, Xometry keeps looking for new ways to expand the ecosystem and deliver additional value to its participants. The latest moves include three targeted acquisitions:
Last December Xometry acquired Thomas, the company running the Thomasnet B2B (business-to-business) manufacturing platform with over 1.3 million users. Thomasnet’s customer base ranges from giants like General Electric to small business, and covers a range of fabrication techniques that complement Xometry’s traditional areas of strength in 3D printing, injection molding and die casting. Xometry also purchased assets of Big Blue Saw LLC, a company offering instant quoting for waterjet cutting and laser cutting, again complementing Xometry’s pre-existing offerings.
Another important acquisition was that of key assets of Factory Four, a software developer of cloud-based applications for factory floor operations, procurement and distribution. Xometry will provide the acquired Manufacturing Execution System (MES) to its customers for free. This will prove especially valuable for small and medium companies that often lack the financial resources and know-how to invest in manufacturing planning and execution software. Randy Altschuler, Xometry’s CEO and cofounder, stresses that the software is “agnostic”, in the sense that companies can use it to manage any orders, including those not coming from Xometry and Thomasnet.
“We are building this AI-driven marketplace to help our customers build big ideas, to help innovators in industries from autonomous vehicles to space flight to the next generation of technologies to combat climate change,” – says Altschuler. “With these recent acquisitions, anything our customers need to turn these big ideas into reality is right there in the Xometry marketplace.”
Thomasnet covers some 500,000 suppliers in 70,000 different categories, notes Altschuler, which bolsters Xometry’s positioning as a one-stop shop for its customers. On the platform, AI helps customers identify the best technology to manufacture the product, and then match them with the best manufacturer based on production capacity, delivery speed, skill set and cost, among other factors. As AI relies on big data to generate high quality recommendations, the growth of the platform in turn improves the AI’s recommendation in a virtuous loop.
Xometry’s strategy meets an increased need by companies for more flexible and agile supply chain solutions that crucially include local options. Russia’s invasion of Ukraine is only the latest in a series of global disruptions that have driven home to manufacturers the need to transform their supply chain strategy.
“The need for localized supply networks is more important than ever.” Says Altschuler. “It does not need to be the only option, or the primary option, but it needs to be an option.” The fact that Xometry is now a large public listed company offers an additional element of stability and reliability compared to smaller individual suppliers, stresses Altschuler.
Acquisitions are often challenging to pull off successfully, with culture clashes and overlaps of competencies and roles some of the key stumbling blocks. Altschuler is very clear on his strategy to make these latest acquisitions work well: “We want to be one Xometry, one team. That means, for example, that we count the tenure of our new colleagues as if they had worked for Xometry the whole time, including their period with Thomasnet, for example. It also means organizing our structure around competencies rather than legacy companies. The teams get fully integrated very quickly.”
The rise of raw materials prices, and the broader acceleration of inflation, has brought additional pressure on manufacturers. Altschuler notes that as the prices of some materials and components rise, companies often cannot switch quickly enough to alternative production technologies to use different materials. The ability to reduce costs through better sourcing and more efficient manufacturing planning and execution becomes even more important. At the same time, the multiple pressure on manufacturing companies are accelerating the adoption of digital-industrial innovations. The current challenging period, while painful in many ways, could give us a stronger and more agile manufacturing industry for many years ahead.