Fabricating.com — A New Politically Charged Spend Marketplace for Custom Parts Launches (Part 3)

Please click here for Part 1 and Part 2 of this series.

The buyer experience on Fabricating.com is not dissimilar to the general experience of using other marketplaces -- Ariba Discovery, MFG.com, etc. There are particular nuances to each, so we'll leave a comparative review to a more specialized analysis later. But with Fabricating.com, users already accustomed to basic e-sourcing tools will find themselves sacrificing little in building basic RFQs for parts and components. The ability to create RFQs is straightforward and templated around custom parts buying. For example, the system defaults to requesting information about why specific terms a buyer is to put into an RFQ (e.g., FOB) as well as whether an RFQ should be recurring or one time only.

One of the real strengths of the underlying Fabricating.com architecture, especially given the fact that this is a free tool for buyers to use, is the ability to upload information into the system in multiple ways. While the US site has not yet turned on the capability for direct integration into SAP systems, for example, the system is designed to take requirements out of ERP and pre-populate them in an RFQ (this capability is already in use in Europe). Larger company users should inquire about this capability if they intend to adopt Fabricating.com as part of a regular part quoting process. In addition to ERP integration, Fabricating.com also lets users upload RFQ line items via Excel templates as well as manually key in information online.

Supplier search is an integral step in the RFP process on Fabricating.com and users can also opt to include their own supplier lists. Procurement users can also opt to search for suppliers outside of a specific RFQ based on specific processes (e.g., molding, machining) and supplier capabilities. While the current Fabricating.com database is limited because of the belief in what FreeMarkets once described as "market making" -- which is, to say, the need to create enough sourcing-supported critical mass around a particular event without too few/many suppliers -- there is no doubt that given the offline databases that the Fabricating.com team has access to, that they will work to ensure appropriate and adequate competition for a given RFQ.

After our cursory look at the Fabricating.com buyer and supplier environments (we'll save a more detailed analysis for Spend Matters PRO at some point after we have a chance to play around with it ourselves) and our discussions to understand how more advanced users of the same technology in Europe have put it to the test, it's our view that potential users of Fabricating.com will be quite pleasantly surprised how advanced the system is relative to earlier instantiations of marketplaces (e.g., earlier versions of MFG.com). However, Fabricating.com is chasing moving targets and MFG.com, ThomasNet and others continue to innovate -- MFG.com's latest release, for one, is quite impressive -- and it's likely that any current functional advantages (e.g., direct ERP integration) it has over others are likely to become less obvious over time.

Moreover, aside from the technology, Fabricating.com is clearly a marketplace in its infancy, which means a lot of hard work lies ahead. Fabricating.com will need to build, in their words, "critical mass, one supplier and one RFQ at a time." The need to "build the marketplace in balance" and not onboard too many paying suppliers at once before consistent and growing RFQ volume in given processes is something on the minds of the team. Still, making this dynamic and balance work is very challenging, as any sourcing specialist or supplier salesperson working for Ariba Discovery, MFG.com or other marketplaces with similar models will tell you.

Still, Fabricating.com thinks with the combination of its proven platform and "U.S. suppliers only" philosophy and operating model, that it has a unique position in the custom parts market. The ultimate irony in the case of Fabricating.com is that it's not a truly free market despite the fact it is a marketplace; rather, the site is a protected marketplace aimed at providing buyers with an assurance that only domestic suppliers will bid and their IP will remain protected relative to shipping parts offshore.

Watching this experiment in trade and sourcing politics will be almost as interesting as handicapping how Fabricating.com, MFG.com and Ariba Discovery (with SAP and ThomasNet) will go head-to-head on the solution/functional sourcing side of the house when it comes to servicing the direct materials RFQ needs of buyers. We'll be reporting back what we hear. If we had to guess, if Fabricating.com is still independent in a few years time, Spend Matters believes they will evolve this current political stance to some degree as manufacturers look to right-source rather than simply re-source or globally source.

- Jason Busch

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