Proto Labs Inc. Isn't Just an Early Stage Manufacturer

In the age of mass customization, Proto Labs offers more than the basics.

Jul 8, 2014 at 1:05PM

As far as manufacturing trends are concerned, it seems that the world is slowly moving away from one-size-fits-all solutions and toward catering to the unique needs of customers. As a result, a larger variety of products are being introduced, but at smaller production volumes, putting rapid manufacturer Proto Labs (NYSE:PRLB) in a great position to benefit, which specializes in low- to mid-volume manufacturing runs. In other words, Proto Labs isn't just an early stage manufacturer in the age of mass customization.  

In the following video, 3-D printing specialist Steve Heller asks Proto Labs Chief Technology Officer Rob Bodor how SKU proliferation and customized manufacturing trends are benefiting the company. Going forward, Proto Labs investors should listen to future earnings conference calls to confirm that the trend toward SKU proliferation and mass customization remain intact.

A full transcript follows the video.

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Steve Heller: When you were talking about a product, I was asking earlier, are you [will Proto Labs] ever going to get to the point where you're going to be able to manufacture a million of the same exact part?

Your answer was very interesting to me, about how we're living in this world that's very customized so a lot of SKUs, a lot of products, only have 10,000 parts. If you could touch on that a little bit, it would be great.

Rob Bodor: Sure. Our business, we're [Proto Labs is] really trying to focus on getting parts to market very quickly to help designers. But what we're [Proto Labs is] finding more and more is that we're actually able to be the production vendor for many of our customers, for a lot of their products, because there are a vast number of products where 5,000-10,000 SKUs is really all that they make in a year.

That's true in consumer and in industrial and in commercial products, and we see that this trend is moving more and more this way because product lifetimes are shortening; increasing customization means that you're seeing SKU proliferation across many industries.

In that case, we're [Proto Labs is] an excellent fit because we can not only start from concept through production, but because of our low-cost model, where molds are $1,495 -- or sometimes more, but starting at that level -- we [Proto Labs] can actually be the lowest total cost of ownership solution for their manufacturing process, across the life of that product.

Heller: Yes, no other competitors can really step up to that. What makes you also very unique is you've already built out the platform, and now you [Proto Labs] can take an acquisition, bolt it onto your platform, and offer even more services to your existing customers.

Bodor: Yes, that's right.

Heller: It's really brilliant, honestly.

Bodor: Thanks!

Steve Heller owns shares of Proto Labs. The Motley Fool recommends Proto Labs. The Motley Fool owns shares of Proto Labs. 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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