Q&A: CEO Vicki Holt Sees Broader Scope for Protolabs
Protolabs celebrates 20 years of digital manufacturing innovation this year. So, what’s ahead for our pioneering company, and, along those lines, what does the future look like for the manufacturing industry? Protolabs CEO Vicki Holt offers her take on the future.
Let’s start with what’s ahead for Protolabs’ service lines specifically.
Going forward, our service-line capabilities and expansions are going to be focused on helping us meet more of our customers’ needs for both prototyping and on-demand manufacturing services. And that’s for each one of our services: 3D printing, CNC machining, sheet metal fabrication, and injection molding.
We’re moving from meeting just the basic manufacturing needs a customer has to supplying more complete services, quality processes, and customer engagement expectations for on-demand production within our key industries. For example, we are now providing expanded quality documentation and quality inspection offerings tailored to meet customer needs. Also, we are adding industry-specific certifications, such as AS 9100, alongside our ISO 9001 certification, to better support the industries we serve such as medical, aerospace, automotive, and consumer electronics.
So you’re talking about services that go beyond prototyping?
Yes. Our customers want us to go there, and for us to be the leading ecommerce supplier of custom parts for the industrial customer, we’re excited to be able to do that. As our customers evaluate manufacturing service partners they are looking for companies that can evolve with their products from prototyping to commercialization and scale up. We are a great production partner for manufacturers with products that have shorter product life cycles, unpredictable demand, and lower-volume or mass-customized products. Our customers are hungry for us to be able to see their products through their product lifecycles.
Do you see this as a shift from Protolabs’ heritage, from its beginnings as mostly a prototyping service provider, to now including more production?
Absolutely! This is a natural progression and in fact our customers have been using us for production for a number of years. We’ve been evolving in this direction, somewhat since the beginning because we’ve been continuing to expand our part envelope and capabilities. Over the past few years we have been evaluating and adding the services and capabilities required to meet our customers’ needs for production parts a lot more often. We’ll continue to provide the best prototyping services, but we’ll also leverage our proprietary digital manufacturing model to serve the market in a broader capacity. And of course all manufacturing processes will continue to be done in the Protolabs way—fast, reliable, and with high quality!
You mentioned how Protolabs has been “expanding the envelope,” which the company in many cases has done through acquisitions, most recently with Rapid Manufacturing. Do you see more acquisitions in the future?
Every time we evaluate whether adding a service helps meet our customers’ needs, we look at whether it makes sense to invent or create it from within or to acquire the service. So acquisitions are an option for us, if we can find the right acquisition that would be a strategic fit and that would allow us to accomplish what we wanted to do. Remember that to deliver at the speeds that we do, we have to digitize the manufacturing process end to end. So even with an acquisition, we have to invest to make it truly digital and scalable.
What about the company’s future overall growth?
We believe Protolabs is a business that is a long-term growth story. As we look at our capabilities and the potential of where we can serve the broader manufacturing market needs, including on-demand manufacturing services, the market opportunity is significant. We can sustain double-digit growth rates globally in our business over the long term. There will be quarter-to-quarter fluctuations of course. But over the long term, given the size of the market, and the tremendous value we deliver to our customers, we believe that this growth is sustainable.
Let’s shift gears and talk about manufacturing generally. Any key trends?
I see three mega-trends that create a great set of tailwinds for Protolabs. And they are all inter-related. First, more products than ever—especially user-centric products—are incorporating technology into them, whether they be sensors, controllers, or ways to collect data or ways to interface with a user’s iPad or iPhone. This is often referred to as the internet of things (IoT). This is a huge trend across almost every product you can imagine: cars, medical devices, consumer products, household products, home climate controls, etc.
Second, product lifecycles are getting shorter and shorter. In part, this is due to IoT because everything contains technology and technology is changing so quickly. Example? Medical device companies used to put out a product and it would be good for eight or nine years. Well, today, it interfaces with your iPhone or tablet, so you’ve got to re-invent it every three or four years. So, all of these companies have to accelerate how they do innovation and shorten those product lifecycles.
Third, as companies incorporate this technology and functionality into their products that interface with devices, they find they have to customize those products for specific groups or even individual users because what they need is different and they see greater value in that customization. So, for these user-centric products, this mass customization is resulting in products being launched that, instead of needing millions of them produced, they need maybe 10,000 of one item, and 20,000 of another. Customization is called for. And on-demand production is called for.
With all three of these trends, we can help manufacturers thrive in a world where these issues are causing them problems, causing them pain, and they are trying to figure out how to change their processes…we can help them do that, both with prototyping and on-demand production. It has become an on-demand consumer economy and it’s no different in manufacturing’s B-to-B economy.
What about education, workforce, and industry-image issues?
I’ve had the opportunity over the past couple of years to participate in the National Association of Manufacturers (NAM), including serving on its board, and this has given me an opportunity to gain insights into issues important to manufacturers.
One issue is education, and how important it is to have an educational system that allows us to develop strong technical skill sets in young people. Gaining access to a skilled workforce, and being able to attract and retain talented people in manufacturing, are critical issues.
In addition, manufacturing is in the process of changing its image from the kind of old, dirty, manual shop floor environment to a high-tech, fast-moving, and growing environment, like we have at Protolabs. So, by participating in NAM, it has given me a chance to influence the perception of manufacturing and how we need to create a growing, flourishing manufacturing community.
And who do we need in manufacturing? We need people with high-tech, digital skills, but we also need shop floor employees too, those who will work alongside technology as more processes than ever are automated. Combine the large number of baby boomers who are retiring with the robust growth we are expecting in manufacturing, we are going to need lots of people. Between now and 2025, we are going to need 4.6 million people in manufacturing, and where we are in manufacturing, we are estimating a 2.4 million shortfall, according to a NAM and Deloitte research study.
That will certainly be a challenge for our industry, but, rather than managing decline, I’d much rather manage this amazing projected job and industry growth. As a colleague said recently, given this growth, coupled with all of the game-changing innovations and advancements happening in our industry, this is simply a great time to be in manufacturing.