On the line

Houston electronics manufacturing company gears up for growth

Houston-based MacroFab has created the Uber or Airbnb of electronics manufacturing. Getty Images

It takes an unnecessarily long time for electronic devices to get from idea to reality — and much of that is due to inefficiency in manufacturing. Just getting a prototype together takes weeks of back and forth between the engineer and the manufacturer.

"The business model for contract manufacturing hadn't changed in 30 years," Chris Church says. "It was phone calls, emails, going out and playing golf, going to lunch, and negotiating everything endlessly."

Houston-based MacroFab is addressing these antiquated and outdated ways of manufacturing and changing the way electronics manufacturing is done. For its revolutionary work, the company has consistently seen its revenue at least double — sometimes tripling or quadrupling — every year, and projects to at least triple in 2019.

Addressing an underserved market
Church — who has a background in hardware development, specifically within robotics — created MacroFab in 2013 and launched the platform in 2015. Misha Govshteyn joined the board in 2014 and became CEO last summer. The duo co-founded cloud-based security-as-a-service company, Alert Logic, in Houston in 2002.

Using its custom software, MacroFab enables customers to upload their designs through the website, where they can then receive projected timeline and pricing information from the get go. The company has its own manufacturing area in its office for prototypes and small orders, but its network of large manufacturers is a key part of the MacroFab's growth equation.

The company has about 20 manufacturing plants as partners that can pick up manufacturing jobs from MacroFab customers when the plant has space on its lines up for grabs. Rather than let available capacity go to waste, these plants can easily pick up the design and materials to start production.

"It's not dissimilar to what Uber is doing with cars — there's a lot of people with cars that could give you a ride if they knew you were out there," Govshteyn says. "It's that matchmaking function is essentially what we're doing with our customers."

The manufacturing partners benefit from jobs they otherwise wouldn't have, and the MacroFab customers get access to a plant that they didn't have to do the legwork to find. Govshteyn says a he's heard horror stories from people who had orders that were unceremoniously dropped by a manufacturer because another one of its clients just placed a large order.

"That shouldn't happen. If a factory gets too busy, it should be easy enough to take that job and move it somewhere else," Govshteyn says. "But, right now, there's not a way to do that."

Using cloud technology, the MacroFab platform can easily share the design and translate it to any given factory, Church says. They also have a technology that combine smaller orders together so there's no wasted resources, which brings down the cost for the customer.

While usually a company might have to find a new manufacturer as they scale up and start making larger orders, MacroFab customers don't have to start from scratch to find a new plant that can take their order — MacroFab will do the matchmaking for them.

"We've created and are continuing to build a marketplace for excess manufacturing capacity," Church says.

MacroFab owns the customer experience and the sales aspect — ensuring a more positive and consistent experience — while the manufacturers can just take the jobs and go.

Scaling up
The manufacturing marketplace is a newer focus for MacroFab — the company just launched it in beta this year — and is a big proponent of the company's growth. Before, the company was limited to what it could produce in its own factory taking on prototype and small orders. Now, with access to the manufacturers, the company has served 1,700 customers, building 500,000 units for about 4,000 different products. Those figures, Church says, are scaling up so rapidly as they expand to new partners.

"This is the first quarter where more gets produced outside of our factory than inside of it," Govshteyn says. "By this time in Q1, 75 percent of our revenue will [come from outside manufacturing plants.]"

Since manufacturing plants haven't historically collaborated, Govshteyn says the reception from manufacturers has been "cautiously optimistic." But then they realize they are getting customers for free — all they have to do is meet the requirements and deliver on time, he says.

"It's great for them to see that their factory is only half used, but then they can fill it up with jobs from MacroFab," Govshteyn says.

Houston has been a great city for MacroFab with its port manufacturing and logistics, two things Govshteyn says MacroFab is focusing on.

"At the end of the day, we're a manufacturing company, and I think we'll dabble in logistics," he says. "There's a lot worse places to start a logistics-heavy company."

Today starts classes in San Jacinto College's new center. Photo via sanjac.edu

San Jacinto College is gearing up to open the Center for Petrochemical, Energy, and Technology at its main campus in Pasadena — a $60 million project designed to bolster the Houston area's petrochemical workforce.

On August 21, the community college hosted media tours of the Center for Petrochemical, Energy, and Technology (CPET). The center will welcome more than 2,800 students August 26 and host a grand opening September 18. The college broke ground on the 151,000-square-foot center in September 2017.

At CPET, future and current petrochemical workers will learn about process operations, troubleshooting, nondestructive testing, instrumentation, and myriad other aspects of the industry. In all, CPET will offer 75 courses. The center's highlights include an 8,000-square-foot glycol distillation unit, 35 labs, and 19 classrooms. San Jacinto College bills the center as the largest petrochemical training site in the Gulf Coast region.

"Four years ago, a team came together from San Jacinto College and the East Harris County Manufacturers Association to put together a long-term plan for workforce development," says Jim Griffin, associate vice chancellor at San Jacinto College and senior vice president of petrochemical, energy, and technology. "The Center for Petrochemical, Energy, and Technology was part of that plan and is now a reality."

Griffin says the curriculum, classrooms, and labs were "designed and influenced" by the petrochemical industry.

Among CPET's more than 20 partners are:

  • Emerson, which donated more than $1.3 million worth of services and equipment.
  • INEOS Olefins & Polymers USA, which contributed $250,000 in cash.
  • Dow Chemical, which donated $250,000 in cash.

All three of those employers — and many others in the region — depend on schools like San Jacinto College to contribute to the pool of highly trained workers in the petrochemical sector.

"We expect to see a higher-than-normal level of retirements over the next five plus years; rebuilding our workforce is critical at this time," Jeff Garry, Dow Chemical's operations director in the Houston area, said when his company's CPET donation was announced. "The need to train and adequately staff our assets will continue to be a pressing concern. As the labor market becomes more competitive for talent, we understand the importance to attract and retain highly skilled and educated workers."

With four campuses in Harris County, San Jacinto College promotes itself as a training hub for the country's largest petrochemical manufacturing complex, featuring 130 plants and employing about 100,000 people. CPET will serve as the centerpiece of that hub. Overall, the community college says it "plays a vital role in helping the region maintain its status as the 'Energy Capital of the World.'"

PetrochemWorks.com — a petrochemical career initiative whose backers include JPMorgan Chase & Co., the Council for Adult and Experiential Learning, and the East Harris County Manufacturing Association — says the local petrochemical industry will need 19,000 more skilled workers annually over the next three to five years.

"Chronic shortages of skilled labor are increasing costs and schedules and resulting in declining productivity, lower quality, more accidents, and missed objectives," according to Petrochemical Update, a news website.

Although robots are on the rise in many industries, Mark Mills, a senior fellow at the Manhattan Institute who's an energy and technology expert, believes that as petrochemical companies increasingly turn to automation, productivity will go up, ultimately creating more jobs — not fewer.

"In large part," Mills writes, "it's desperation, not an infatuation with tech or cost savings, that drives employers to deploy technologies that amplify the capabilities of the employees they have and can find. It is a common misconception to think that automation is always cheaper than using labor."