MF Case Study #022:

Houston Energy Company Cuts Inventory Costs, Reduces Design Iteration Time with MacroFab

The Texas-based energy company provides land completion services, operations solutions, and a suite of technologies that enable oilfield operators to maximize production. Previously, they worked with an overseas electronics manufacturer to develop components for various oilfield engagements. However, supply chain delays and a lack of transparency in their order fulfillment process led the company to explore other, digital-first solutions.

MacroFab helped a large Texas energy company decrease its inventory costs while improving its iteration turnaround times.

Get to Know the Work:

The Texas-based energy company provides land completion services, operations solutions, and a suite of technologies that enable oilfield operators to maximize production. Previously, they worked with an overseas electronics manufacturer to develop components for various oilfield engagements. However, supply chain delays and a lack of transparency in their order fulfillment process led the company to explore other, digital-first solutions

Assessment

Before MacroFab, the company worked with an offshore electronics manufacturer. While this option provided reputable services at an affordable price, the eight-hour time zone difference and geographic distance slowed down the order fulfillment cycle. The company also experienced a significant language barrier issue. It took weeks to iterate on new designs before moving to production. In the competitive oil and gas industry, this extended development period made it harder to outperform peers and win new business.

Because of a slow electronics supply chain, the energy company had less flexibility to respond to customer requests related to changing, expanding, and shrinking orders. To mitigate some problems on this front they moved to keep more inventory on hand. But this solution drove up costs and locked up valuable capital.

Challenge

The company’s offshore manufacturing partner offered limited visibility into its operations, and the energy company’s procurement manager and engineers didn’t have insight into what was happening on the factory floor once they approved designs. This lack of transparency created additional financial audit risk and reduced their ability to address potential production issues in advance.

Finally, the off-shore provider didn’t have a robust digital system for handling orders and designs. The Texas company’s engineers could only communicate ideas or adjustments to the partner via phone calls and emails. These asynchronous methods made it difficult to maintain a single source of truth around what had been discussed between the two parties and wasted countless days in back-and-forth communication as the companies were rarely working at the same time because of the time difference.

Process

MacroFab is a PCB and electronics manufacturing platform that simplifies every aspect of the manufacturing journey, from prototyping to fulfillment. With MacroFab’s online portal, engineers can upload and iterate on designs, source various components, and track orders in real-time. MacroFab has also built a network of high-quality North American-based manufacturing partners that clients can tap into instantly. Today, MacroFab is the only digital platform capable of handling production volumes.

MacroFab offered a compelling path for the energy company to move away from its overseas manufacturer without disrupting ongoing operations. The company could use MacroFab as its central hub for designing new products and trust them to select the ideal third-party manufacturing facilities for its needs. After seeing a demo of MacroFab, managers decided to move forward quickly with the new solution.

The energy company decided to explore alternatives closer to home. The company’s new Director of Category Management began looking for a modern, digital-first electronics manufacturing solution, leading them to MacroFab.

Our Solution

MacroFab first evaluated the energy company’s production needs compared to MacroFab’s broad manufacturing network and recommended the company shift to a Mexico-based facility that offered a comparable price point to the company’s overseas manufacturer, without the long shipping times and major time zone difference. While procurement managers often compare third-party manufacturers exclusively on price (a poor predictor of manufacturing ability), MacroFab chooses the best-positioned vendors based on many factors, so companies don’t waste time researching and contracting with suppliers that can’t meet their expectations.

On the design front, MacroFab offered the iteration speed of a domestic design firm. Engineers from the energy company can upload their designs to MacroFab, solicit real-time feedback from MacroFab experts, and manage delivery schedules on their own. No more days are wasted waiting on email responses or phone calls back from an off-shore team. Now the company has a collaborative partner with skin in the game; MacroFab takes responsibility for a vast manufacturing network on behalf of its clients.

Looking ahead, the energy company plans to ramp up to full production volume –hundreds of thousands of units –with MacroFab and continue exploring new ways to deliver better services to oilfield customers across the U.S.

Summary

Thanks to MacroFab, the Texas-based energy company no longer has to keep as many products on hand and has significantly cut its inventory costs. With less capital tied up in inventory, they have more flexibility to innovate and explore new value-added opportunities. Now the company can sell excess capacity to others in the industry and supply their goods, turning competitors into customers.

Iteration time also dropped significantly, from three months to seven weeks, including delivery. The firm’s engineers can now collaborate on designs with MacroFab experts who speak the same language and work in similar time zones. The energy company also has better visibility into order fulfillment and can change orders in MacroFab’s digital platform without needing to consult anyone. The team can evaluate pricing at a detailed level and has more information regarding its order fulfillment process.

MacroFab orchestrates electronics manufacturing on its client’s behalf, which includes choosing the ideal partners from a large, well-vetted North American network. As capacity needs change, MacroFab is able to quickly add or reduce factory capacity without a long-term commitment.

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