3D Printing Service with a Smile: Protolabs CEO Rob Bodor on the Company’s Future in AM

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Protolabs (NYSE: PRLB) is much more than a 3D printing company, it’s a comprehensive digital manufacturer. Nevertheless, precisely because the company has competencies in more or less every cutting-edge industrial process, I often look to Protolabs for signals concerning the health of the additive manufacturing (AM) industry, especially in the US.

According to the company’s CEO, Rob Bodor, “It’s been a consistent growth driver for us in the past. It continues to be, and we’re increasing our investments into our AM capabilities for the future.” One major example of those investments, which I wrote about last fall, is Protolabs’ opening of a new 120,000 square-foot facility in the Raleigh, North Carolina area, its third facility in the state and the second the company has built from scratch.

This is far from the only tangible expression of the company’s expanding foothold in AM. However, even on its own, Protolabs’ experience in North Carolina makes for a compelling growth narrative:

“We got into both 3D printing and into North Carolina in 2014, through an acquisition of a company called FineLine, headquartered in the Raleigh area,” Bodor told me. “When we made that acquisition, the operations were spread across two fairly small facilities, about 10,000 square feet each. Shortly thereafter, we moved into the facility we’ve had for about eight years now, which is 70,000 square feet.

We eventually outgrew that facility, and then across the street we built the newest site, which is over 100,000 square feet. We moved our metal 3D printing operations into that building, which has now freed up space to continue to grow the plastics side in the original facility. The metals facility is about halfway filled so far. That is what we try to do wherever we have a physical footprint — in 3D printing and in all our other areas. We buy facilities based on the demand growth of our customers and move in to where they’re about half-full, which enables us to continue to expand as needed.”

Although Protolabs didn’t make its decision to move into and continue expanding in North Carolina in response to growing interest in reshoring, the decisions in any case certainly align strategically with such growing interest. Protolabs’ presence in the right hubs is one of the company’s biggest competitive edges, as it’s able to continuously tap into skilled manufacturing labor pools as it gradually expands its operations:

“Our main rationale for expanding in North Carolina is because that’s where we have the expertise in 3D printing,” elaborated Bodor. “That pool of talent is really what allows us to consistently and reliably turn out such high quality parts. One of the things that makes AM more challenging than other processes from a customer standpoint is that unlike traditional manufacturing processes, which most engineers learned in school — where each manufacturing process hasn’t changed much in 50 years or what have you — AM is constantly evolving.

“Our Raleigh operations represent the largest AM contract bureau in North America, and the same goes for Europe, concerning our AM operations in Germany. One of the biggest competitive advantages for us, then, is simply the tremendous amount of expertise we’ve built up in those locations. We’ve got applications engineers who are very deeply knowledgeable, which is a necessity since we offer customers seven or eight different AM technologies. This all equates to value we deliver to our customers, in the form of guidance in evaluating and adjusting their designs, their materials, and their processes.”

In addition to the general quality of their personnel, Protolabs’ AM competency derives from the time, resources, and consideration the company puts into vetting new processes before incorporating those processes into its repertoire. Pulling the trigger on a new manufacturing ecosystem is a difficult task, but the effort Protolabs puts into it does much to explain the efficiencies the company is able to achieve:

“We look at a number of different factors when we’re assessing bringing on a new technology,” Bodor said. “First off, we work really hard to qualify the process so that we truly understand what it’s capable of — we’re not just reading the brochure, we’re validating the technique to see where it’s going to fit, how it’s going to deliver, and if it’s going to bring something unique to the table that we can’t already do with one of our existing processes.

“Then we get into more specific aspects, like what’s the uptime of the machine? What’s the reliability, what kind of throughput can we get? Since we’re a 24/7, year-round manufacturer, we really push every piece of equipment we have. This doesn’t mean that we don’t take on new equipment from time to time and end up finding out there are unexpected challenges, especially if it’s a new technology and it’s early on in our experience with it. But the due diligence we do prevents us from overcommitting to those technologies before we’ve established some familiarity with them.”

Going forward, that’s an especially important approach to take for all US manufacturers to take, given the levels of new manufacturing activity anticipated to spring up over the next decade and beyond. Bodor affirmed that while that process of reshoring is certainly an inherently slow one, it’s also a process that he expects is here to stay:

”The supply shocks thus far this decade have obviously made many industries start considering how they need to approach their supply chains differently. It caused the leadership teams at companies all over the world to look at the vulnerabilities in their supply base, and when they did that, they realized that most of the issues stemmed from relying on singular sources of supply, usually from somewhere across the world.

The positive sign I’ve seen that has followed from that, is that the way people are responding has gotten less philosophical or conceptual, and more action-oriented. Now, it’s not just a switch you can flip, and it’s not going to lead to — in the case of the US — all the manufacturing that left the country coming back to America. But some of it certainly will be, and already is, and in all other cases, there’s a priority to ensure diversification of sources for key materials and components.”

Protolabs’ 3D printing division did an impressive $84 million in revenue in 2023, which is not just good for the company, but should also send encouraging demand signals to the whole AM industry. It’s still not easy to figure out how to build a successful business model around providing 3D printed parts. But Protolabs has figured out a winning formula, and its expectations for the future suggest this is just the beginning.

Images courtesy of Protolabs via LinkedIn

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