KAD Models and Prototypes Saves 75 Hours a Month, Increases Revenue by 15%, and Protects Customer Intellectual Property

Background

In 2011, Brian Kippen founded KAD Models and Prototypes (KAD) in Alameda, California. KAD specializes in high-quality and fast turn services for CNC machining, silicone modeling, and urethane casting. KAD stands apart from other big industry players and online providers by delivering personal experiences, and not simply products. KAD provides feedback on designs and recommendations that ensure quality without sacrifice.

After a few years, KAD was seeing rapid growth by leveraging social media and Brian’s reputation in the industry. In 2016 he began a new partnership with Fictiv, a digital manufacturing network. Today, Fictiv works with more than 250 manufacturing partners, but KAD was one of the first shops to join the network.

Fictiv pairs engineers who need parts with local machine shops that have capacity, and it was an easy way for KAD to pick up extra jobs and maintain cash flow. Additionally, when KAD was at capacity and had an overflow of jobs, Fictiv promised that Brian could outsource that work to other suppliers in the network.

By 2019, Brian was able to open a second facility in East Randolph, Vermont. The equipment for the new facility was delivered in January 2020, shortly before the COVID-19 pandemic started. Even in the face of a global pandemic, KAD was able to maintain its growth, and almost doubled the number of employees across its two locations.

Challenge

KAD’s partnership with Fictiv helped them grow initially, but the benefits were not lasting. In 2018, Fictiv received funding from new investors to open a division based in China, and to launch its Agile Manufacturing Solution (AMS). Under these new investors, Fictiv began to expand beyond prototyping and accelerated its transformation into a global digital ecosystem. This shift inherently changed the local, transparent and controlled environment that Fictiv once offered its vendors.

While Brian recognizes the benefits of global manufacturing, Fictiv’s new direction created trust issues between KAD and its customers. If KAD was at capacity and outsourced jobs to other vendors in the Fictiv network, it had no control over which vendor the job went to. If KAD produced the first set of parts, but another vendor produced the second set, there could be inconsistencies across parts. The quality of the products could be compromised, and KAD would be responsible for the product.

It was apparent that Fictiv was increasingly prioritizing speed over quality. Buyers would upload parts and the job would go to the vendor with the fastest production, regardless of whether it was domestic or overseas. This process hurts vendors because Fictiv’s auto-generated quote was not reviewed by a competent estimator. According to Brian, the quoting algorithm was not accurate, nor did it account for repeat orders. As a result, vendors had no control of cost and often had to make the parts for a loss.

Brian saw that these global manufacturing networks negatively impacted vendors that wanted to do high-quality work, and also recognized the problem of not owning customer relationships: “Buyers discover manufacturers through referrals. If the buyer uses a network, they don’t know they’re working with your shop and won’t refer you. The more you rely on a network, the narrower your customer base becomes.”

Because of these developments, KAD could no longer rely on the Fictiv network for its growth. Brian needed to take back control of his business’ growth, and searched for a solution that provided a comparable digital experience. Brian searched for a solution that would allow his company to operate independently and get quotes to buyers quickly.

KAD evaluated several options, but most lacked all the right capabilities. Brian also considered other manufacturing networks like Xometry, but similarly to Fictiv, the auto-generated quotes were not accurate. He was also reluctant to pass control of customer relationships to yet another network. As Brian said, “Fictiv helps you get off the ground, but personal relationships help you move forward.”

Solution

Brian was attracted to Paperless Parts because it could help him turn around quotes just as quickly as Fictiv, but with more accuracy and consistency. Quoting was a cumbersome process at KAD, and Brian knew his time was better spent making parts than manual data entry. Paperless Parts helps automate the quoting process and makes it easy to quote internally without overburdening employees. By leveraging Paperless Parts’ powerful geometry engine, easy-to-use pricing tools, and modern customer experience platform, KAD was able to regain control of its business and continue its rapid growth.

Results

Using Paperless Quoting, KAD:

• Sped up quoting: Paperless Parts helps streamline and automate the quoting process by analyzing the part geometry to suggest pricing, and reducing the bulk of administrative work. With these improvements, Paperless Parts saves KAD approximately 75 hours per month. For KAD, these time savings are incredibly valuable because time is better spent making parts. According to Brian, “saving 20 hours means making a couple of additional thousands of dollars on the shop floor.”
• Enabled expedite revenue: Using Paperless Parts, KAD was able to add custom markup options to every order that give customers the choice of speed or cost. Today, 10-15% of KAD’s revenue is made in these expedite options. “It’s surprising how often customers select the option to expedite parts,” said Brian. “Online providers [like Fictiv] provide a minimum cost for a part and then add on for speed. At KAD, we quote the reasonable price and then add cost if buyers need it faster.”
• Ensured ITAR-compliant cybersecurity: With the Paperless Parts Platform, all data is encrypted and secured on the same servers used by U.S. government agencies. KAD employees are able to mark sensitive parts as export controlled in Paperless Parts. They use the system’s secure file sharing and collaboration capabilities to ensure that those part files never get transferred in a way that compromises the customer’s intellectual property. With these measures KAD greatly reduced the risk of compromising its customers’ data.
• Advanced business analytics: Paperless Parts analytics helped KAD better understand its customers: by tracking different customers over time, KAD could look at past win rates and anticipate whether a buyer intended to do business with them or was using them as a sounding board. “If you’re only winning 1% of work from a customer, that time is better served elsewhere. The analytics in Paperless Parts helped us optimize our strategy.”
• Improved consistency across quotes: Before Paperless Parts, KAD employees would simply have to remember if they had quoted a specific part before. Now, they can easily “requote” with a single click, reference previous quotes for similar parts, and even give buyers better prices for being repeat customers. Buyers appreciate that prices don’t fluctuate, and that quality is consistent because all parts come from the same manufacturer, not a network like Fictiv or Xometry.
• Enhanced customer service: Paperless Parts enables KAD to offer professional-looking digital quotes with interactive part previews, part notes, pricing options, and an integrated shopping cart. Paperless Parts also helps KAD employees easily follow up on quotes and personalize the experience for every customer. “It’s a sales tool in a way because clients can see how professional we were; we’re not just a little machine shop,” said Brian. “They can see all my notes in the quote and get the personal experience.”

After years of working with Fictiv, Brian has finally taken back control of his business. Paperless Parts enables KAD to own its customer relationships, quality output, and growth, while still offering a modern and secure digital experience.

“Manufacturers are in this industry because we enjoy customer relations and building a successful reputation. You lose that control when you work primarily with third parties and buyers don’t know who you are. Then you become a slave to the network to get new jobs. Using Paperless Parts, KAD can deliver a complete solution to each part, and our customers know us for our high-quality work.” – Brian Kippen, Founder

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