Web Site Leads Shop To Nearby Customers

Nebraska Machine Products (Omaha, Nebraska), established in 1966, has grown to be one of the largest screw machine shops in the state. Yet, it's still very much a family business. Like any other job shop, the company has faced dwindling orders from a declining customer base and increased competition for the domestic work that remains. Therefore, it is preoccupied with finding new customers and has discovered that the solution is often to use nontraditional approaches to locate more markets.

It was Larry Zahm, the outside sales manager (and only sales person) for the job shop, who began using MfgQuote (Atlanta, Georgia) to track down new business.

"I'm a firm believer in meeting customers one on one, shaking hands, sitting down and putting a face on Nebraska Machine Products," he says. "But it's a big job just visiting the customers we have, let alone making cold calls to look for new customers."

MfgQuote first contacted him by mail, then by phone and finally via e-mail in the form of RFQs that were appropriate for Nebraska Machine Products. "The RFQs were very complete, with part drawings, photos, company information, contact, city, state and more," he says. "What really hit home was that we found some companies very close to us that we were overlooking." At that point, the company decided to hook up with MfgQuote's Internet service, MfgQuote.com, an interactive service enabling manufacturers to buy and sell custom manufacturing services. Buyers post RFQs at no cost; suppliers (subscribers) quote for business that meets their expertise and capacity.

Mr. Zahm says he now uses MfgQuote.com daily, checking RFQs and printing out those he feels might be a good fit for the company. He quotes 20 to 30 jobs a week. "What this service has done is open up the door to work out there that we wouldn't know about otherwise. It also exposes us to potential customers who have not heard of us, primarily because of geographic reasons.

"As I sift through the RFQs," he says, "I tend to focus on those opportunities in the central United States. I pay little attention to those on either coast—New Hampshire, New York, Connecticut or California, Oregon, Washington. I feel those areas are flooded with machine shops, and it also seems the coasts are more prone to sourcing overseas than companies in the Midwest." He finds that the region Nebraska Machine Products focuses on—the central one-third of the country—is less likely to source overseas. "Companies there find it hard to communicate with offshore firms and find the quality is suspect, the leadtimes are long and the shipping costs are very high and going higher as a result of rising fuel costs." He adds that these points counteract the often praised advantage of low offshore labor costs.

MfgQuote.com is easy to use, according to Mr. Zahm. The only discouraging thing is that there is not enough time in the day to quote all the jobs he finds on the Web site. However, by filtering through the RFQs by type of machining application and geographic location, he is able to pick and choose the ones he feels are best-suited for Nebraska Machine Products.

"In the short time we've been on the site, we've added two new customers—one in Illinois and another in Nebraska. The Nebraska customer—a design engineer who works from his home in Bennington, Nebraska, and provides parts to suppliers across the United States for perishable aircraft items—was not listed in the Nebraska Manufacturers Register. It turns out, he's only 8 miles from us. That's the real strength of the site— expanding your reach."

Mr. Zahm offers one piece of advice: While using the site, be prepared to quote against more suppliers than normal. "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, and some from overseas. Any time you penetrate new markets, you've got to expect heightened competition. After all, someone was supplying these companies before you found them."

The original goal in signing with MfgQuote.com was to expand the company's reach and presence across the entire United States, but especially in the central states.

"I don't see the Internet replacing human contact. What it does, however, is streamline the process, allowing us to engage in a quoting process and a relationship before we can schedule a personal meeting," Mr. Zahm concludes.