Company Rebounds With Online Marketplace
When the high-tech bubble burst, many companies were left hanging. A-Sandor, Inc. (Ottawa, Ontario), a 6-year old, ten-person job shop specializing in prototyping and design work, was no exception.
"A number of our customers filed for bankruptcy, leaving us with a significant number of unpaid invoices," says Mr. Nagy. "Needless to say, companies in bankruptcy aren't going to place more orders, so we were left with two to three customers. Although we realized that we had to do something, we had frankly no idea of what that might be. We had no marketing experience and seriously considered closing down.
"I think that MFG.com (Atlanta, Georgia) saved the company," he continues. "After losing a substantial amount of money in the bankruptcies, we were running short on cash. The work in Canada virtually slowed to a halt. As a last resort, I decided to try the Web site."
MFG.com is an interactive service that enables manufacturers to buy and sell customized services. Using this site, buyers post requests for quotes (RFQ) at no cost; suppliers and subscribers quote for business that meets their expertise and capacity.
When A-Sandor, Inc. first started using the service, it bid on small jobs, some less than $100. Today, the company reports that the same $70- to $100-customer routinely places jobs worth $10,000 to $15,000 per month.
"This particular customer now works directly with us," says Mr. Nagy. "Typically, we bid on a number of jobs, and the customers like our work. We often begin to work directly with many of these customers."
Since A-Sandor, Inc. began using the site, it has established a comradery with many companies throughout the United States, especially in California and New York. According to the company, it now deals with customers in about ten states and is still growing.
The shop is equipped with various Haas machines, two vertical machining centers, one CNC lathe and a CNC turning center. There are plans to acquire a Haas CNC turning center with live tooling and subspindle, in addition to changing out all of the company's toolroom machines with new Haas toolroom mills and lathes.
On occasion, Mr. Nagy has been flooded with purchase orders for a month or two and has had to "lay off the site." Generally, he is awarded 10 percent of the RFQs for which he bids.
"Last week, we delivered a number of large jobs we'd obtained through MFG.com," reports Mr. Nagy. "So far this week, I've quoted several jobs and have four purchase orders."
The volume and quality of the RFQs afford the company the luxury of choosing jobs, as opposed to accepting whatever comes along. "When I had only two or three customers, I'd have to accept whatever they sent me," says Mr. Nagy. "Today, I have freedom to choose which jobs to pursue."
He adds to this freedom another consideration—his employees. Having been a machinist since the age of 14, Mr. Nagy admits that there were times when he hated it. This was because from time to time, he'd have to run a boring job. "There is little worse for a machinist than having to do a job that doesn't engage his/her interest or ability," he explains.
Despite the fact that manufacturing is struggling in Ottawa, the company says it is doing quite well. With about 95 percent of its business originating in the United States, A-Sandor, Inc. attributes its recovery to using MFG.com.