How Stratasys Ltd. and 3D Printing Disrupt Inventory Management

In the following video, 3D printing specialist Steve Heller interviews Ryan Sybrant, global senior manager of manufacturing solutions at Stratasys (SSYS -0.20%) during EuroMold 2014, the world's largest 3D printing conference, held in Frankfurt, Germany, in November. During the segment, the pair discuss how 3D printing could disrupt traditional inventory management, thanks to its just-in-time nature that could free up cash to be reinvested into the business, and how the 3D printing giant plans to remain distinct in the manufacturing space.

A full transcript follows the video.

Steve Heller: In terms of the bigger picture, some of the other advantages; additive [3D printing] shapes the holistic view of manufacturing and the supply chain. We're talking about spare parts here, we're talking about inventory management. I was wondering if you could touch on that some more.

Ryan Sybrant: Yes, in the relevant applications, so let's talk about direct part production or low-volume production [using 3D printing].

Traditionally, I remember when we were ordering components we had to order a minimum order quantity just to get that unit price down to something that was acceptable to make our margins in the overall assembly.

That required us to order more inventory than was needed, so it would just sit on the shelf. It didn't have very quick turnover on that inventory, so your cash is quite tied up with that inventory.

The idea is not to tie your cash up in inventory, so this technology [3D printing] allows you to be a lot more flexible. You can make it on-demand, as needed. There's no tooling requirements for the direct part production, so really it's changing or disrupting the supply chain that we're accustomed to.

Heller: Given the competitive nature of 3D printing in general, the industry is expected to grow by over 30% a year through 2020. Obviously that's inviting a lot of competition, so how is Stratasys working to remain differentiated in this manufacturing realm?

Sybrant: That's a great question. We're very much committed to materials development. I think materials really drive the next generation of applications. As you develop more of these high-performance materials that enable these manufacturers of maybe complex or high-strength, high-temperature components, it really drives those applications, gets that market pull for us.

The materials drive applications, applications obviously drive the industry and drive sales for our machines, so that's definitely what we're really focusing on.

We're also looking at other ways of, how can we add value to our equipment? Not just doing one process, but can they do multiple processes in there?

I think manufacturers as a whole are looking for more of an all-in-one type of machine that might, in our case, extrude the plastic down in the additive format but might come back, maybe with a cutting tool, to do some other operations on there.

There's an endless amount of opportunities you can go [for], so it's just developing the right one, getting the voice of the customer, what are they really looking for?

I'll give you an example. If they say, "Hey, Stratasys, your machine does 80% of what we really want it to do, but it's that other 20%. How do we close that gap?" Those are the things that we're looking at; how do we close that gap to make this the ultimate machine that the customers are looking for?

Heller: Yes, just responding to customers' needs. Thank you so much for your time today, Ryan.

Sybrant: Thank you.