Fabricators are in the information business

Several years ago I recall taking a shop tour and seeing a batch of parts with a red tag on it. My tour guide was the operations manager, and he stopped to speak with the supervisor. Why the red tag? It just so happened that there was a small design change, and the engineering change order didn’t make it to the shop floor in time. So those parts needed to be reworked.

I thought of that incident when speaking last week with several managers from Exact Macola. Like JobBOSS, Macola is under the Exact umbrella of companies. Macola launched in the early 1970s as an enterprise resource planning (ERP) provider for small and medium-sized manufacturers. In 2001 Exact bought the business, and, according to company sources, it basically lay low for about a decade.

“There really had not been any new product development or any focus in growing the business after the acquisition.”

So said Alison Forsythe, managing director, who joined Macola at the beginning of 2013, at which point things started to change, and new product development resumed in earnest. Three years ago it launched Exact Macola Evolve, its annual user conference, to communicate the company’s latest development efforts. The latest conference was held in Atlanta in early April.

During a follow-up interview after the conference, Dan Griffin, director of product management, gave some insight that reminded me of seeing that red tag on a batch of bad parts.

“Uber is now the world’s largest taxi company, but it doesn't own any vehicles,” Griffin said. “Similarly, if you look at the world’s largest media company, it doesn’t create any content—and that’s Facebook. And if you look at the world’s most valuable retailer, it doesn't have inventory; that’s Alibaba. If you look at the world’s largest hospitality provider, it doesn't have any rooms or any real estate. That’s Airbnb. And what do all these companies have in common? They’re essentially information companies. And that’s the difference between a manufacturer that’s doing very well these days, and one that’s barely keeping its head above water.”

A fabricator can’t avoid all red tags. No operation is perfect, and sometimes customers slip in changes too late in the game. But more and more, shops are scrutinizing just how information reaches the floor, what form that information takes, and how quickly it gets there.

The strategies take various forms. Some have created “front office cells” in which estimating, purchasing, engineering, and sales all work together to ensure they get the right information quickly. Others adjust scheduling so that jobs are released at the last possible moment, with just enough buffer to ensure on-time delivery. And, of course, software is playing a role.

Whatever the strategy, it seems fabricators aren’t really selling the capability to make parts and subassemblies anymore. They’re actually selling their ability to partner—that is, to communicate, advise, verify, and get the job done right the first time.