Coming to a Printer Near You

05/01/2012 7:30 am EST

Focus: MARKETS

Josh Wolfe

Editor, Forbes/Wolfe Emerging Tech Report

Most consumers still think of 3D printing as something from science fiction. It's time to think again...it's here and growing, writes Josh Wolfe in Forbes/Wolfe Emerging Tech Report.

Abe Reichental has been the president and chief executive officer of 3D Systems (DDD) since September 2003. During his tenure, the company has evolved and expanded its business model from a supplier of 3D printers to a provider of comprehensive 3D content-to-print solutions, reaching thousands of new users worldwide.

Prior to this position, for more than 22 years Abe served in various senior management positions with Sealed Air Corp. (SEE), a global manufacturer of protective, specialty, and food packaging materials, most recently as corporate officer and vice president and general manager of Sealed Air’s Shrink Packaging Division from May 2001 until September 2003 and previously, as vice president Asia-Pacific.

Abe is the recipient of the 2011 regional E&Y Entrepreneur Of The Year award, two Innovator Awards and holds 25 US patents. His activities include several for profit and non-profit board memberships, as well as frequent speaking engagements in various product development and management organizations and participation in several Harvard Business School Case Studies.

What did you think of 3D Systems when you first learned of the company?

When the opportunity arose at 3D Systems, I realized that this was a technology-rich target waiting to be liberated into an impactful and valuable business model.

I could see what enormous potential the technology held for every part of our lives, from education to health care to art, and I believed that with the right business model the company could push the capabilities while eliminating the friction points. Given my engineering background, entrepreneurial approach, and international experiences with mergers and acquisitions from my years at Sealed Air—it seemed to be a match made in heaven.

Before we jump ahead—what exactly is 3D printing?

This is a technology capable of taking any design or object that was either captured or created digitally, and producing it in a physical 3D format. The object is first scanned or created in computer design software, and then it is replicated into a model or a fully functional part, in plastic or metal.

What was the status of 3D Systems when you arrived as CEO?

At that time, the company operated as a machine tool company, and the business was in a ditch, both financially and litigiously. There were many technological assets, but a lack of coherent direction; the technology was expensive, and there was no discernible “razors and blades” business model. It was just about selling expensive and complicated capital equipment.

What was your vision for what this company could become?

We dreamed about how to migrate the technology to the production flow, to allow the re-localization of manufacturing, and the complete flexibility to create and manufacture tangible, cost-effective products. We dreamed about how to enhance the quality of life through health care applications.

How do we harness this technology to enhance human conditions, and customize it for individuality? How do we empower and unleash people’s creativity? All these thoughts ran through my head as I worked to turn the company around, because financially, it was in dire straits.

I needed to reengineer the company’s DNA and culture to become customer-centric and entrepreneurial. The business needed innovation and tangible customer value, because nothing matters unless it matters to the end user.

3D printing has been around since the 1980s. What key trends have been driving changes to this business over the past few years?

The co-founder of 3D Systems pioneered 3D stereolithography printers in the mid-80s, and at its inception it was a very complex and expensive technology reserved for expert, deep-pocketed users—primarily automotive and aerospace companies. This set of powerful tools moved into the mainstream as push-button 3D printers became more affordable.

Today, a significant expansion of print-engine technology and functional materials now offer a viable alternative to traditional manufacturing processes. 3D printing is augmenting, complementing, and even replacing previous methods of prototyping and production. That evolution has allowed us to substantially extend the adoption of this technology, from the automotive and aerospace guys to manufacturers of durable goods that span many industries.

We’ve seen a steady migration to more consumer-type applications, starting with makers and hobbyists, and a transition from the prototype shop to the production floor.

What types of companies are incorporating this technology today?

We see changes happening in industries where this technology provides an immediate and obvious value proposition—for example, in orthodontics and dental restoration, hearing aid manufacturing, high-end automobile specialty parts, and aerospace applications.

On every Boeing (BA) F-18, about 90 parts installed on board are printed on our equipment. Align Technologies (ALGN), the makers of Invisalign, manufactures tens of thousands of aligners daily using our 3D printers.

Leading in-the-ear hearing aid manufacturers use our 3D printers to print the custom-fitted component that holds the electronics. Major jewelry companies use our printers to mass produce precious metal castings from sacrificial wax patterns. The next wave of innovation is in high-end luxury automobiles, where some nonstructural parts are already being printed today.

The value proposition of 3D printing comes from the complete freedom of creation in terms of geometry and complexity. We offer completely tool-free, mass-customized manufacturing environments, with faster turnaround, faster lead times, lower inventory, and complete flexibility to evolve the product line.

Other companies are clearly paying attention, including competitors like Stratasys (SSYS), EOS, and Objet. Where do you see your competitive edge in that field of players, and how would you describe the competitive dynamics?

We do have excellent competitors, yet there are key differences between our products and business model and theirs.

First, all the competitors that you mentioned are single print-engine pure plays—a single technology offered in different sizes and formats. Contrast that with our seven print engines, and our comprehensive ability to solve our customers’ entire design-to-manufacturing needs. We approach each customer with a toolbox, while our competitors go with a single tool in different sizes—like offering hammers in different sizes and convincing the user that every project resembles a nail.

Second, we have assembled the most comprehensive service capability of on-demand parts, not just for 3D printing services in plastics and metals, but also secondary services for every step from design to manufacturing in urethane casting, injection molding, and CNC machining.

We’ve enhanced and augmented that service with affordable content creation tools, such as entry-level and professional CAD packages, comprehensive reverse engineering tools, and scanners that significantly speed new product development. It’s a seamless 3D content-to-print toolbox—we don’t leave it up to the end user to become the expert integrator.

Quite frankly, our real competition comes from traditional manufacturing methods and learning methods in schools—the traditional ways that makers and hobbyists have always used. The garages and shops and classrooms—that is where we find the underdeveloped opportunities.

3D Systems remains a relatively small company in a very exciting space. Do you expect larger companies to enter this market?

We’ve been watching a few interesting trends that may bring in those players. The first is infinite cloud computing power for data crunching.

The second is the availability of powerful, smart mobile devices that bring everything to your fingertips. The third is the affordability and simplicity of home and cloud printing.

For the last few years, we have been very acquisitive, and have put together a comprehensive set of capabilities that take us all the way from 3D content creation and capture to print, both on the prosumer and the consumer level. These trends are likely to catalyze other companies to consolidate, and some of our good competitors may begin to emulate that strategy.

Some people talk about having a factory on their desktop. Are these unfounded misconceptions about the technology? In contrast, what areas of 3D printing technology are underappreciated today?

One area I consider over-hyped is the business expected to come from makers. While the maker movement validates our innate human creativity and desire to be self-sustaining, makers belong within the realm of expert users. As such, they don’t belong to the real masses of market movers.

On the other hand, the movement of 3D printing into school classrooms is an under-hyped trend that is a personal passion for me. Businesses in the US should lead in technology and innovation. We need platforms like Cubify.com for the kid that is about to invent the next big thing.

Ten years from today, what kind of 3D printing capacity will a typical consumer have?

3D printing is already shaping and touching almost everything that we consume and use: the cars we drive, the cell phones we use; the sneakers we wear. We just don’t know it because we’re not in the manufacturing business.

Fast forward ten years, and it becomes the ultimate tool for education, interior decorating, even gaming. Consider it a personal manufacturing tool that will become more capable over time, to a point where people can launch businesses from their homes.

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