A One-Stop, AI-Driven Manufacturing Marketplace
This column has long kept tabs on Xometry, the Maryland-based global on-demand manufacturing platform company. From the start, Xometry has focused on building a strong ecosystem that helps manufacturing companies of all sizes increase efficiency and flexibility, reduce costs, and optimize capacity utilization.
With this in mind, Xometry continues to seek new ways to expand the ecosystem and provide added value to its participants. The latest initiatives include three targeted acquisitions:
Last December, Xometry acquired Thomas, the company that operates 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 smaller companies, and spans a range of manufacturing techniques that complement Xometry’s traditional areas of strength in 3D printing, injection molding and die casting. Xometry also purchased the assets of Big Blue Saw LLC, a company offering instant quotes for waterjet cutting and laser cutting, again complementing Xometry’s pre-existing offerings.
Another significant acquisition was the key assets of Factory Four, a software developer of cloud-based applications for factory operations, supply and distribution. Xometry will provide the acquired Manufacturing Execution System (MES) to its customers free of charge. This will prove especially valuable for small and medium-sized businesses that often lack the financial resources and know-how to invest in manufacturing planning and execution software. Randy Altschuler, CEO and co-founder of Xometry, points out 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 create big ideas, to help innovators in industries from autonomous vehicles to spaceflight to the next generation of technologies to fight climate change,” says Altschuler. “With these recent acquisitions, everything our customers need to bring these big ideas to life is in the Xometry Marketplace.”
Thomasnet covers some 500,000 suppliers in 70,000 different categories, notes Altschuler, which reinforces 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 matches them with the best manufacturer based on production capacity, delivery speed, skill and cost, among other factors. As AI relies on big data to generate high-quality recommendations, the growth of the platform in turn improves AI recommendation in a virtuous loop.
Xometry’s strategy responds to an increased business need for more flexible and agile supply chain solutions that crucially include local options. Russia’s invasion of Ukraine is just the latest in a series of global disruptions that have caused manufacturers to transform their supply chain strategy.
“The need for localized supply networks is more important than ever.” says Altschuler. “It doesn’t have to be the only option or the main option, but it has to be an option.” The fact that Xometry is now a large, publicly traded company provides an added element of stability and reliability over smaller, individual vendors, Altschuler points out.
Acquisitions are often difficult to pull off, with culture clashes and overlapping skills and roles among the main stumbling blocks. Altschuler is very clear about its strategy to make these latest acquisitions work well: “We want to be one Xometry, one team. This means, for example, that we count the seniority of our new colleagues as if they had worked for Xometry the whole time, including their period at Thomasnet, for example. It also means organizing our structure around skills rather than legacy businesses. The teams integrate very quickly.
Rising commodity prices and the broader acceleration of inflation put additional pressure on manufacturers. Altschuler notes that as the prices of certain 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, multiple pressures on manufacturing companies are accelerating the adoption of digital-industrial innovations. The current difficult times, while painful in many ways, could give us a stronger and more nimble manufacturing industry for many years to come.