Beyond Speed, Here's How Proto Labs Inc. Differentiates Itself From the Competition

It's not surprising that Proto Labs' (NYSE: PRLB  ) rapid manufacturing services have become increasingly popular in recent years. After all, fast turnaround times invite the potential for Proto Labs' customers to gain a competitive time advantage over their peers, not to mention, an opportunity to save on development costs. While Proto Labs may boast some of the fastest turnaround times in the industry, the same may not hold true in the future. Hypothetically, Proto Labs could face increased competition in terms of speed and quality, which would make it harder for the company to remain differentiated.

In the following video, 3-D printing specialist Steve Heller asks Proto Labs Chief Technology Officer Rob Bodor how else the company differentiates itself beyond its relentless emphasis on speed. Because Proto Labs has considerable scale and manufacturing capacity, it also has the ability to remain extremely competitive on price.

A full transcript follows the video.

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Steve Heller: Let's talk about, if lead time is equal. Let's say the competition here is heating up, and they're starting to match your [Proto Labs'] ability to make parts just as quickly and just as good. How else is Proto Labs going to work to differentiate themselves?

Rob Bodor: First of all, our lead times are the fastest.

Heller: Today, yes.

Bodor: Right.

Heller: I'm just saying hypothetically, in the future, how would you [Proto Labs] approach that?

Bodor: Beyond just lead time, there's a number of things. I already talked about some of our [Proto Labs'] design for manufacturability, this feedback that we provide customers right in the quote, in just a few hours -- so the consultative nature of what we [Proto Labs] can provide them, I think, is significantly higher, and there's a lot of technology that enables that, which is a real barrier.

Another one is lowest cost of entry and lowest total cost of ownership. Cost of entry, I talked about [Proto Labs'] molds starting at $1,495. The other thing is parts. We [Proto Labs] can machine parts -- just one part -- for $100, or sometimes less. That's really hard for anybody else to compete with because just the non-recurring engineering expense is really hard to overcome. Our [Proto Labs'] automation helps us to do that.

Then beyond that, our [Proto Labs'] scale and our repeatability; we invest in a lot of capital equipment, and we invest ahead of demand, so that we can ensure that we can provide customers that level of speed at all times.

I'll give you some examples of some scale that we've done. It's not unusual for us to do 10-20 mold orders for a single customer at one time, and we can deliver those in 10 days or less -- parts off of 10-20 simultaneous molds.

Heller: You have a lot of capacity, is that correct?

Bodor: Yes.

Heller: To keep that fast, bringing products to market, you're constantly adding capacity as you're growing.

Bodor: We are, yes, ahead of demand. We also have our systems and our automation that supports that, so that we [Proto Labs] can enable that level of speed.

Repeatability is another big thing. You'll get quotes back from us [Proto Labs] in a few hours, and you'll get parts from us in as little as a day, and it doesn't matter what day you happen to hit us and who happened to be at work that day, or all of these common things around scale. We've really built that out.

Heller: Since you have [Proto Labs has] the processes in place, it doesn't matter if it's a Sunday afternoon and no one's ... the automation takes care of all those challenges.

Bodor: Exactly.


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