SUBCONTRACTING SHEET METALWORK SOURCING INNOVATION
started, Vares explains. “We developed an
algorithm that is able to calculate, as
precisely as any other method, how much it
costs to produce one or another part. The
manufacturing companies are able to put
their input into the system, which is then
used to calculate the prices.
“But that produced a little too much
unwanted overhead for the manufacturing
companies, and the input was changing in
time. So we changed our model a bit, such
Martin Vares
into account the same input received from
the manufacturers and their machinery, and
adding on top of it current and historic
market data to arrive at a price that is good
for the customer and manufacturer.”
Basically, Fractory is a quoting service,
drawing on freely given supplier factory/
machine data to support it. “In the end, it all
comes down to providing access to those
manufacturers and suppliers who, at this
point in time, want work and whose pro le
exactly ts the job.”
Now, before the customer sees the quote,
it is presented back to the supplier to see
whether it is happy with price and lead time;
if not, it doesn’t have to accept the job.
“They are not tied to us. There is nothing
visible online, if they don’t accept it. We then
go to the next best supplier and do the same
thing. Currently, we see that this process
never goes beyond the second-best quote.”
The company sets itself apart from
competition, explains Vares, by not charging
its supply network for being members.
“For suppliers Fractory is a zero-investment
solution in getting your foot in the Industry
4.0 revolution, so to say. We take a cut from
the order.” That’s why, perhaps, that he
reports that there is currently “a bit of a
waiting list” to join in many regions (not in
the UK because it is still quite new), although
he adds that the challenge is more on the
customer side. “We want to make sure that
we have enough work for the suppliers that
we have in our network, but also that they
are maintaining quality levels and working
closely together with us.”
So the more customers Fractory gets, the
more suppliers will be required in the
network, he says, adding to the current 25.
And the co-founder says that Fractory is
making sure that suppliers do not become
over-dependent on it for work: “We want to
be a top-tier client for them, yes, but we also
want to allow them freedom.”
IT’S A GLOBAL AFFAIR
Now, sheet metalwork is most typically a
national, even local affair, since bent sheet
metal products are predominantly air, so
shipping empty boxes around the world
doesn’t make sense. So, what is the draw
for companies as far away as the USA and
Australia? Four pallets 2 m tall of folded
boxes went to the USA recently, for example.
They couldn’t nd a suitable company within
budget and timeframe, says Vares, who adds
more generally: “In the beginning, we knew
that there was going to be cross-border
movement of parts in Europe, where there
are some quite small countries, but we didn’t
really imagine that it would be economic to
transport parts to the other side of the globe.
Yet it turns out that it is economic.
“It all comes down to what is available at
the moment. If you are a sole buyer and you
only order once a month, you probably won’t
have established a good supplier network
that you can rely on. So, when you send out
the enquiry, you won’t know which supplier is
able to satisfy the requirement at what price
and in what time. On the other hand, Fractory
is a single point of contact that is able to
provide everything needed by the customer,
with us sending enquiries only to those that
need the work right now and who are the
most suitable suppliers. There is no point
sending a 15 mm stainless steel plate
cutting job to a supplier with a 2 kW laser
pro ler. The result will be long processing
time and poor quality, but some suppliers
would accept such a job, because they need
them to ll capacity. That can’t happen with
Fractory; we know what machines suppliers
have and what their capabilities are.”
Advantages for the supplier network seem
clear. Fractory is a regular customer (the real
customers are invisible to suppliers) that
itself pools suitable work from a network of
companies across a wide geographic area,
even globally, to which it actively promotes –
a great many suppliers operate locally and
undertake little to no marketing, relying to a
large part on a pool of established clients.
For the customer, the network is a preapproved,
tightly-managed network that
delivers quality product via Fractory (the
customer does not know who the supplier
is). “We keep things closed because for
customers it is not important, as long as
quality and delivery are met. Fractory takes
on the role of ensuring that quality, lead time
and shipment are maintained, taking care of
things when there are any issues – its
manufacturing, things do go wrong
sometimes – taking all the risk in making
sure the service is delivered and that
suppliers do not repeat any mistakes, so
protecting all customers from any issues with
a supplier in our network. If there were direct
communication between customer and
supplier, we would not be able to apply
control and guarantee quality, and so on.
“Fractory is not just a software company,
we introduce best practices in all processes
to suppliers in the network – mandatory
quality standards, for example. And the
suppliers welcome this, because they can’t
think of everything; there isn’t the
information out there to guide them on
various aspects of their business. We bring
in all that best practice to them from a single
source.”
Fractory claims some 500 user accounts
taking in around 350 unique clients (some
users employ the service merely as a
budgeting tool) and says it has made some
300,000+ parts. Having served some 175
customers in its rst year, it doubled that in
the rst quarter of this year and has a goal of
hitting a “four- gure number by the end of
this year”. Growing revenues by ve times
this year is another goal. Such ambitions are
built on solid ground, it seems – the
company has powerful backing, having just
closed a new round of investment of a nine-
gure nature.
that now we are providing the pricing, taking
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