2020 was an eventful year for the additive manufacturing industry that no one predicted. The coronavirus pandemic practically shut down the global supply chain. But these gaps in supply, especially for personal medical protection equipment, were initially met through the efforts of users of 3D printing and additive manufacturing systems. The spotlight on the additive industry gave it a boost in attention. So what might be on the horizon for 2021? What are experts predicting for the coming year?
A number of additive vendors and service providers are giving their predictions. With me today is Greg Kress, CEO of Shapeways. Greg has been CEO since 2017. Most recently, he was president and COO of Open Education, where he was responsible for turning strategy into operational and financial success, as the business expanded to more than 400,000 students in 25 countries, supported by over 1,200 employees. We’re going to go into a bit more depth on the Shapeways 2021 predictions, based on insights from industry insiders, strategic partners, and high-profile business and consumer customers. Thank you for joining with me today, Greg.
Thank you so much for having me. It’s great to be on the show.
You recently published a report on trends in 2021. And one of those items that you saw as a key trend was software. What specifically are customers seeking when it comes to 3D printing software?
That’s a great question. Ultimately, Shapeways is a digital manufacturing platform, which has digitized and connected the end-to-end manufacturing flow from a technology perspective. So, there’s been a tremendous amount of investment taking place on the design side, developing files, getting them prepared for manufacturing. And then there’s work that’s been done on the machine side, where individual machines are now digital and connected to a network.
But that flow end-to-end is what really has not been digitized. And that’s what Shapeways does. So Shapeways sees our software investments, and the software that we’ve built inside the company, as really our differentiator. It’s allowed us to produce over 21 million parts in over 90 different materials and finishes across 10 different technology production technologies for over a million customers, and delivering them to 130 countries. So just a tremendous amount of breadth and scale.
As I look at 2021, you’ll see more people enter into 3D printing. They’re going to find that what 3D printing is the ability to manufacture either incredibly complex parts, or the design parts, or allow you access the idea of low-volume production, which creates complex one-piece workflows. To be able to do that at scale requires digitization. It requires software, to truly differentiate yourself, so that you can actually do it economically, at a right price level for your customers. So, we see that continuing as a trend. I think it’s been one of our things that, when I look at the people in this space and when I look at our peers in the space, the ones that perform the best are the ones that have that truly differentiated software platform that enables them to do this at scale.
As far as this digitization software, can you list a couple of specific features? Because I know our audience is probably very familiar with the STL language and there’s been some programs about looking inside certain additive technologies to see what’s going on. So what is it with digitization software that differentiates it from those areas?
Yeah, that’s a great question. I think if you take a step back and you think about the process of a file flowing end-to-end through production, the idea of being able to upload it to a website and configure that product across technologies and materials, and being able to identify different finishes and certifications that are required to go along with that, and then different delivery speeds, it starts to become very complex. So that instantaneous pricing and getting access to a purchase process that takes seconds versus months, I think it’s one differentiator that is kind of the kickoff of the process. As that continues Shapeways is integrated into a ton of third-party platforms. So if you’re managing files on another site, or if you’re managing an e-commerce website, or if you have an ERP system, we integrate directly into those platforms.
As those files come through, get configured, we’re checking for printability and ensuring that the file is actually manufacturable. We’re helping adjust the file’s design and making sure the file is ready. And then we allocate all that demand out to our supply chain. Our supply chain is made up of a ton of different cells of internal manufacturing. Plus, we have some overflow manufacturers that work with us. But getting that actually sent out to that manufacturing network is actually quite complex, and to do it efficiently on every single part to optimize basically the cost structure of that part is, we really rely on technology to go do that.
We then have our own tray planning software internally, where we’re creating dense trays to optimize the efficiency and asset utilization of our products. We have a complex manufacturing execution system that manages the one-part flow end-to-end with 100% traceability.
Then ultimately that all comes together with delivery to an end customer. So we may have a company using Shapeways as a service, but ultimately we’re delivering to their end customers. We’re delivering to millions of customers out there, and that supply chain and warehousing where… as part of that, we’re also doing assembly and certifications and fit testing and all of the work that goes into delivering it in a custom box to the end customer. So that complex end-to-end workflow is really what Shapeways enables to happen. And of course, additive manufacturing is the true differentiator to go do that economically. It’s one of the key reasons why we lean into that technology as much as we do.
So digitalization is more of a name for end-to-end flow from when the designer finishes their part and sends it over to a service provider, to finish the product?
That’s correct, all the way through manufacturing. So, if you think about it, that part should never have to be downloaded. A file never should have to be uploaded to something. It should be able to connect directly all the way through to the machine, all the way to the end customer. What we’re doing is trying to remove all of the non-digital aspects of what manufacturing is today.
If we think about manufacturing in general, 90% of manufacturers are small to midsize manufacturers, that don’t really have access to technology. They’re really relying on more manual or paper-driven systems, very what I’ll call manufacturing 1.0, right? It’s traditional from a process perspective. The number of productivity gains and efficiencies that can take place, and then the use of real data that comes out of the end-to-end flow by digitizing the process is staggering. That’s really the premise of digitalization or Industry 4.0 or digital manufacturing that you hear so many buzz words around. It’s because that truly could unlock a massive amount of innovation for the overall industry.
Now imagine the design engineer, they’re at their computer, they’re doing their CAD program. At what point does this digitization software impact them?
Yeah, so ultimately, there’s a couple of things that happen. Today, not every manufacturer is created equal. Some manufacturers have some levels of certification, some have certain materials or certain technologies. The work that it takes for an individual designer to go and get access to the full capabilities of what are out there today requires know-how. It requires just brute force of them trying to figure that out.
What Shapeways does is, we aggregate a lot of that information together. We offer a wide range of offerings that we do probably about 70% of our manufacturing internally and the other 30%, we use that long-tailed supply chain to go and help support us. But we give a ton of accessibility to that design engineer. It allows them to really broaden the scope or the aperture of their design perspective to a much broader use of solutions that may be in place.
The other thing that you’ll see is that with some of the design software, you’re able to get instant printability checks and instant pricing and instant purchase direct out of those softwares. We’ve been in discussions with a lot of the design platforms to just integrate our service directly into their platforms, and really smooth and fully integrate the full end-to-end process. So those are some of the benefits that an individual designer would see, as we continue down this journey of digitization.
Sounds like there’s some time savings there with all of that.
Yeah, just tons of efficiency, as well. I think that when you’re designing a part, getting feedback almost instantaneously about that part, where you may be designing something and getting instant pricing updates or instant printability checks as you’re going through that process, versus this start and stop process that exists today.
In your report, you are also predicting more interest from venture capitalists. Now how would this venture capital impact a person using a 3D printer to develop designs? What does that mean for them?
Yeah, so for an individual, I think the idea that venture capital is going into the additive space from a hardware perspective, a material innovation perspective, and then also services, really just speaks to the advancement of the true potential of what additive manufacturing can deliver. If you really take a step back, what we’re all trying to do is produce parts. That’s what every customer ultimately wants, is a finished product. I think what additive manufacturing continues to prove is that, as more and more technologies come online, as more and more materials become available, and as more and more services make that truly accessible to the end user, you’re able to see a tremendous amount of innovation taking place.
So venture capital is constantly thinking about, and growth equity is constantly thinking about, where the market is going to be five, 10 years from now, and trying to help influence where that market is going and accelerate that innovation that could take place. Anytime you’re seeing venture capital go into a market, it’s a good sign that the end customer is going to feel a ton of innovation and get access to something that they may never have been able to get access to before.
Now you also mention about the supply chain, and that that’s going to be one of the trends that we see efforts to improve the supply chain. How is that going to impact a design engineer who’s at his CAD station coming up with some new idea?
Yeah, I think a couple of things. One, I think every large producer, anyone that manufactures a product, anyone that has a product, is questioning the way their supply chain is built. I think COVID, and what happened in 2020, has forced everyone to rethink their risk profiles and how they think about their supply chains. I think the focus on flexibility and agility and being able to move quickly becomes more important than maybe it has been in the past. I think as you think about digital manufacturing and additive, those are lean in, and definitely meet the needs of what that higher level of agility requires.
When I think about the individual engineer that’s designing a part, and how this idea of flexibility and agility fits into them, when you’re traditionally designing a part for say, injection molding, you’ll go through a process of iterating and prototyping an individual mold for months getting it just perfect. Because the amount of investment that needs to take place to get that perfect is incredibly high, because you’re going to go then produce a million parts with that, and you’re going to have to live with the consequences of that design. You’re not going to be able to move or change quickly. You’re not going to be able to adjust to changing design needs driven by customers’ changing requirements. You’re not going to be able to go get that part fulfilled by multiple locations because you’re basically signing up with a specific manufacturer. I think what you’ll see is that those designers are going to require manufacturers to be more flexible, have higher agility, be able to move and pivot more quickly to adapt to dramatic changes in the environment, like we saw this last year.
As I think about Shapeways, and I think about additive manufacturing and digital manufacturing, I think what you’ll see is those are technologies that really bode well for that solution and those requirements. I think that’s what you’ll see is, a lot of the way you approach the design and the way you approach the development of products will continue to change, because customers’ expectations continue to rise. And additive manufacturing and digital manufacturing really provide a much more flexible solution that can go meet those customer needs.
As a company that is very involved in various supply chains, what have you done, or what have you noticed in this past year that has changed your business model a bit?
To be honest, Shapeways’ business model hasn’t dramatically been affected this year. We may have seen some changes in volume or buying behavior from our end customers, but Shapeways is always kind of built for this. Shapeways was built from the ground up, with purpose-built software for this idea of incredible levels of flexibility and one-piece manufacturing. Our manufacturing facilities that we have internally and in our supply-chain are built with that in mind.
If anything, I think what this year has proven is that our business model can stand up against these types of situations. What you saw probably was our adaption to what customers were coming in and what those customers needed and what sort of certifications were required, what FDA approvals or certain level of certifications for different applications were required for some of the immediate needs that customers were seeing. But in reality, our fundamental business model very much remained the same. We are continuing to be a digital manufacturer, rooted deeply in additive manufacturing, to meet those immediate needs of customers as they come in. We kind of, if anything this year, proved out that our business model is exactly what the market needs and where the market is going.
Were there any insights from the people that you interviewed for these predictions? Did any of their insights surprise you?
I think there’s some varying concerns on how long the ramifications of COVID are going to last. As much as we want to be optimistic about the vaccine and things like that, I do think that the ramifications of how this is impacting individual businesses and their product development cycles and their time and focus and investments, the ripple effects of what happened this year is going to continue on through all of next year. I think that was probably the biggest thing that continues to stand out is that, as much as some of the immediate impact of COVID maybe close to coming to a close within the next, maybe three to six months with a vaccine, there’s still some underlying concerns that it had big impacts on businesses globally. And those businesses are my customers. So ultimately, I think that will continue to be a big piece of our business. That was something that, as much as we all want to be an optimist and just move forward from it, I think that is the one lingering effect.
Well, thank you very much for your time, Greg. I appreciate it.
Thank you so much.
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