Fabricating.com: A New Politically Charged Spend Marketplace for Custom Parts Launches (Part 1)

Earlier this year, Fabricating.com launched a new direct materials procurement marketplace designed to compete against the likes -- either directly or indirectly, as a substitute offering -- of sites like ThomasNet and MFG.com. Its mastermind might not surprise those who have been in the supplier directory and RFP business for some time. Frank Russo, who is running the effort, has worked with just about every publisher and RFP provider in the engineered and custom parts market at some point in his career as an employee, consultant or advisor (ask him about the various proprietary taxonomies if you want to test him on his depth!) After recently launching his new venture, Frank briefed the Spend Matters team on what he's up to with Fabricating.com as well as provided some context behind it.

To start, in getting the marketplace off of the ground, the Fabricating.com team made the decision to leverage a technology platform that's already been proven in the market. In Europe, the same platform powering Fabricating.com has been in use for 12 years, fueling a similar targeted marketplace. It combines a number of RFP-based, supplier management and category specific capabilities (which we'll review in this series). There's nothing overly creative about it, software-wise, compared with the likes of what direct materials sourcing platform specialists like Co-eXprise, FullStep and Pool4Tool have created. Yet the power is in the network and connectivity it provides to suppliers -- not just the underlying functional checklist elements. And the RFQ engine is more than decent, to boot.

The politically charged philosophy of Fabricating.com perhaps makes for just as good of media and review as the capabilities of the toolset for buyers and suppliers itself. This, of course, is the "Made in the U.S.A" label plastered on the site, and it comes through loud and clear in discussions with the Fabricating.com team. To support this philosophy, Fabricating.com only allows domestic suppliers to register and bid on RFPs that are submitted through the system. Fabricating.com shared with suppliers that "a major concern of suppliers [in other marketplaces] is that they're bidding against low-cost labor country suppliers. Embedded in our approach is a more transparent TCO-driven model that lets domestic suppliers compete based on total cost (including quality) versus just unit price. This has a great tie-in to the resounding reshoring theme we are hearing regarding manufacturing in the US market."

While Fabricating.com can support a broad range of custom and engineering parts and components RFPs and spend, the dominant areas thus far have been machinings, fabrications, lathe work, thermoforming and related types of processes. The Fabricating.com business model is actually quite similar to MFG.com and Ariba Discovery. Suppliers pay a fee, in Fabricating.com's case to access a certain number of RFPs. In this manner, suppliers "pay for a bundle of bid packages to quote based on their capabilities" and the service "does not straddle suppliers with an annual subscription," according to those behind it.

Buyers do not pay to use the Fabricating.com system, including the embedded workflow and messaging capabilities it features (e.g., the ability to support dozens or hundreds of line items in a single RFP). But perhaps the biggest value for buyers is the pre-qualification work that Fabricating.com does in registering supplier capabilities. This is not an AP-centric supplier portal with a simple marketing listing. Supplier profiles on Fabricating.com include detailed supplier capabilities (e.g., ability to handle specific requirements, dimensions, lot sizes on a per machine or process basis).

By doing the upfront handholding work to capture highly detailed supplier profiles focused on capabilities, capacities and processes, Fabricating.com is ironically taking a step in the other direction, away from the social ratings and policing of other sites that base their supplier profiles as much on ratings as on highly specific details. Yet for manufactured parts and components, we believe this type of approach is essential to maximize participation in a marketplace environment where suppliers are asked to quote only on the types of opportunities that are an ideal fit with their needs.

Stay tuned as our initial analysis of Fabricating.com continues. In the next installment, we'll take a look under the covers of the specific application and interface itself.

- Jason Busch

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