Internet service leads shop to customers in its own back yard

Modern Machine Shop, Feb, 2005

In some job shops, it's a daily preoccupation: how to find new customers to augment a current customer base, which may be declining because of increased competition from domestic and overseas shops. A screw machine shop in Nebraska found a way to address this dilemma by using a somewhat nontraditional approach to locating more markets.

Serving various industries, Nebraska Machine Products (Omaha, Nebraska) employs an extensive collection of machining equipment, ranging from 11 CNC lathes; six Swiss CNC automatics; seven CNC vertical machining centers (VMCs); 32 screw machines; six single-spindle automatics; and two centerless grinders. Its secondary operations include broaching, soldering and welding, assemblies and subassembly, vibratory finishing, heat treating, plating and other surface finishing. In addition, the company is looking to add another two or three Swiss CNC lathes.

The night shift usually works a 48-hour, 4-day week, while the day shift works a 50- to 53-hour, 6-day week. With this heavy production schedule, the company can consume 80 to 100 tons of material per month. Materials commonly used include plastic, aluminum, mild steel, brass and stainless steel. Parts typically range from 0.03125 inch to 10 inches in diameter, varying in quantity from a single part to 100 million parts.

Recently, Larry Zahm, the outside sales manager for Nebraska Machine Products, was contacted by MfgQuote.com (Atlanta, Georgia), which provided Mr. Zahm with request for quotes (RFQs) that seemed appropriate for the shop's profile.

"The RFQs were very complete," Mr. Zahm notes. "Part drawings, photos, company information and contact information were all included. What really hit home was that we found companies that were close in proximity to us, yet we were totally unaware of them. At that point, we decided to hook up with MfgQuote's Internet service, an interactive service enabling manufacturers to buy and sell customized services."

Using this service, buyers post RFQs at no cost; suppliers and subscribers quote for business that meets their expertise and capacity. Mr. Zahm says he now uses the service daily, checking RFQs and printing out those he thinks might be a good fit for his company. He quotes approximately 20 to 30 jobs a week.

"This has opened up the horizon on work that's out there that we wouldn't know about otherwise," Mr. Zahm says. "It also exposes us to potential customers who have not heard of us, primarily for geographic reasons."

Other than traveling for face to face visits, the only marketing the company does is placing a listing in the Nebraska Manufacturers' Register. The company says this registry is useful; however, it doesn't penetrate markets beyond one's own state lines.

"As I sift through the RFQs," Mr. Zahm says, "I tend to focus on those opportunities in the central United States, paying little attention to those on either coast--New Hampshire, New York, Connecticut, California, Oregon, Washington. It seems the coasts can be more prone to sourcing overseas than companies in the Midwest. Companies may find it challenging to communicate with offshore firms or have concerns about quality. Shipping costs can be high as well."

Mr. Zahm went on to say that although the MfgQuote is easy to use, he doesn't have the time to quote on all the jobs he finds on the site. By filtering through the RFQs according to the type of machining application and geographic location, he's able to pick and chose the ones he thinks are best suited for Nebraska Machine Products.

In the 24 days that the company has been using the site, it has added two new customers--one in Illinois and another in Nebraska. The Nebraska customer works from his home in Bennington, Nebraska, and provides parts to suppliers across the United States for perishable aircraft items. He was not listed in the Manufacturers' Register.

"This was someone we would never have targeted to call because we had no way of knowing he existed," Mr. Zahm reports. "Turns out he's only 8 miles from us. That's the real strength of the site, expanding your reach. We're now quoting jobs in Texas, Louisiana, Wisconsin, Kentucky, Idaho and Montana."

Mr. Zahm offered some advice to new users of MfgQuote: "If you use the site, be prepared to quote against more suppliers than you're used to. Typically, if we were quoting a job for a company we'd done business with for a long time, we might be quoting against two or three other suppliers. By using the Internet, that number may be 20 or 30 suppliers, some of which are overseas."

Nebraska Machine Products' initial goal was to expand the company's reach and presence across the United States, but especially in the central United States.

From this perspective, the site has proved to be a strategic tool for the company. Mr. Zahm says that using the site has decreased the necessity of face-to-face meetings with customers, but he still believes in the value of human contact.

"It [the service] streamlines the process, allowing us to engage in a quoting process and relationship before we can schedule a meeting," Mr. Zahm concludes.