The Rise of Manufacturing‑as‑a‑Service: Key Insights for Engineers and Buyers

There’s been a recent influx of new companies that offer a simplified user experience for buyers and access to unlimited, competitive manufacturing capacity. Referred to as Manufacturing as a Service (MaaS) providers this new type of company, if you will, are quickly gaining favor with engineers and buyers alike, who are looking for more efficient methods of building out their interface and artificial intelligence-assisted back-end.

Hailey McKeefry, editor-in-chief of sister site EBNonline, recently sat down with the Misha Govshetyn, CEO of MacroFab, to discuss this growing trend. The following is an excerpt for their discussion:

EBN:  Manufacturing marketplaces like MacroFab have the potential to disrupt the supply chain for electronics.  How fast is this trend moving and what does it mean for supply chain managers and purchasers?

Govshteyn: Manufacturing marketplaces are gaining momentum and there are numerous examples of customers building significant products with much more agility than traditional manufacturing approaches allow. But as Jeff Bezos often noted in the first ten years of Amazon’s existence – we’re still in day one of marketplace evolution. The overall market for electronics manufacturing is over half a trillion dollars, and we’re just now seeing marketplaces reaching tens of millions of dollars with several breaking the $100M barrier in Gross Merchandize Volume (GMV) by the end of 2019. By all objective measures, these are volumes handled by mid-tier manufacturers, but the rates of growth are significantly higher. Expect these numbers to be in the billions in the next three to five years.

EBN:  While the model might make sense for prototypes, how will you help customers as their volumes increase?

Govshteyn: We have already advanced well beyond prototypes. In fact, only 30% of our manufacturing volume is focused on prototypes today. We already handle customers with hundreds of thousands of units in production. MacroFab is focused on mid-volume production, which is a $80 billion market in North America alone. These aren’t projects which go to high volume Tier 1 or Tier 2 manufacturers. These are production runs of $5M or less per year, and there is a huge number of them out there. Our view is that our digital procurement platform allows these projects to be executed faster, with less friction and overhead. Customers benefit from being able to place their demand in multiple factories – something we call ‘Elastic Manufacturing Capacity’.

We routinely break up production runs between multiple factories, allowing customers to gain lead times they can’t achieve by being tightly coupled to a single factory. Combine this with our ability to execute any mid-volume order from hundreds to thousands of units, even if customer design changes rapidly, and you have a level of agility not possible before MacroFab came along. Companies that embrace this digital procurement approach have a significant competitive advantage. Their orders never get bumped and they are using the power of the network, rather than a handful of suppliers.

To read the full interview, visit EBNonline.