Why Excess Capacity Is Extremely Important to 3-D Printing Service Providers

In order to maintain a competitive advantage in an increasingly crowded space like 3-D printing services, excess capacity is becoming essential.

Jun 5, 2014 at 11:33AM

In recent years, the 3-D printing industry has continued to emphasize 3-D printing as a service where potential customers can outsource their 3-D printing needs to experts. 3D Systems (NYSE:DDD), Stratasys (NASDAQ:SSYS), Proto Labs, and many other companies offer some form of service that allows businesses and consumers to benefit from 3-D printing without needing the technical expertise. In an effort to expand their 3-D printing services, 3D Systems recently purchased Robtec, the largest Latin American 3-D printing service provider, and Stratasys recently acquired Solid Concepts, one of the highest regarded 3-D printing service providers in the entire industry. With 3D Systems and Stratasys bolstering their services offerings, it's becoming increasingly difficult for companies to differentiate themselves from the competition. French company Sculpteo focuses on quicker turnaround times from its professional 3-D printing services as a way to stand out from the competition.

On average, Sculpteo gets customers their 3-D printed objects within eight days, but in some instances it can turnaround jobs within five business days. Being a growing rapid 3-D printing service provider certainly has its own sets of challenges, especially around 3-D printing capacity. In order for Sculpteo to maintain its quick turnaround advantage, it constantly needs to be thinking about the demand of its services and whether or not it needs bring more 3-D printers online to maintain this advantage. It'd certainly be a risk to Sculpteo's reputation to run its factories at full capacity. In other words, excess capacity is an extremely important factor for a 3-D printing service provider that emphasizes speed to consider.

This challenge presents an opportunity for 3D Systems, Stratasys, and other 3-D printing companies like German-based EOS to sell more printers as excess capacity is scaled with growing demand. Because Sculpteo isn't the only 3-D printing service provider that emphasizes speed, growing 3-D printing service needs across the industry could provide a nice runway of growth for 3-D printer makers.

In the following video, 3-D printing specialist Steve Heller asks Kristen Turner, Sculpteo's director of U.S. marketing operations about the company's future plans for expansion. Going forward, 3D Systems, Stratasys, and other 3-D printing investors should monitor the capacity needs of 3-D printing services to get a better understanding of future demand for professional and industrial 3-D printers.

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Steve Heller owns shares of 3D Systems. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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