Episode Transcript
[00:00:03] Speaker A: Welcome to INA Insights, where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by AINA AI, a firm focused on working with industrial companies to make them unrivaled segment of ONE leaders. To learn more about INA AI, please visit our website at www.aina.AI.
[00:00:40] Speaker B: Hi everyone and welcome to another episode of our Titanium Economy podcast series hosted by ina. Today's guest is Rob Boder, who is the CEO of protolabs, a digital manufacturing leader in rapid prototyping and production capabilities. Since joining in 2012, Rob has expanded Protolabs digital capabilities, global reach and automation, serving industries like aerospace, medical and Automotive. Founded in 1999, Protolabs uses advanced technologies like 3D printing, CNC machining and injection molding to deliver fast, efficient solutions for diverse sectors. Rob, very excited to have you here today with us and we look forward to hearing your insights on Protolabs innovations and future direction.
[00:01:27] Speaker C: Yeah, thanks Nidhi. Glad to be here.
[00:01:30] Speaker B: Perfect. Rob, let's get started by you giving us a quick overview of protolabs. What is its core mission and what are some of the key products and services that you offer and who are your primary customers?
[00:01:46] Speaker C: Sure. And thanks again for having me. You know, I'm excited to talk to you about Proto Labs today. I've actually read the Titanium Economy book and I believe that Proto Labs is a great example of a titanium economy company in the US we're an industrial technology company with a great growth story.
We are a 25 year old global business headquartered in the Minneapolis area and we're a contract manufacturer who makes custom mechanical components.
Our mission is to empower companies to bring new products to market by offering the fastest and most comprehensive digital manufacturing services in the world.
So we get to work for the most innovative companies in the world. We serve companies making medical devices, electronics, aerospace and automotive vehicles. And we serve many industrial tech companies.
We serve the vast majority of the Fortune 500 companies in those industries and in addition we serve another 50,000 small and mid sized and large companies every year.
And I guess I would add that we're a digital manufacturer and I mean digital in two ways. First, we conduct our business over E Commerce and other B2B commerce platforms online. And secondly, we've built out digital twins of our manufacturing process end to end. We're digital on the front end in how we engage with customers and we're digital on the back end, enabling us to use a high degree of automation in our manufacturing and Fulfillment model. This makes us unique in the world of contract manufacturing.
[00:03:23] Speaker B: And Rob, there have been some shifts from being a prototype manufacturer to being a full service supplier recently for Proto Labs. Right. What has motivated that shift and how do you think it has affected your ability to serve your customers better?
[00:03:44] Speaker C: Yeah, well, as you point out, we began as a digital manufacturer focused on prototyping.
This was a direct result of the digital twin technology that we developed. The company was founded in 1999 with the mission of making contract manufacturing easier to use, faster, cheaper and more accessible.
And we believed that we could use software to do that by digitizing the process.
So we created an e commerce interface for buying custom manufactured components. We were the first company in the world to transact custom manufacturing online in this way.
But perhaps more importantly, we digitized our manufacturing process.
So to make a part or to even quote it, we first virtually manufacture it.
Set another way, we simulate its manufacture within our factories. And we're able to do that because we've characterized our manufacturing processes and capabilities down to a very fine detail. That's the digital twin that I mentioned before.
And this digital twin allows us to know the exact cost and time to manufacture and so we can give a firm quote to our customers immediately. It also allows us to provide them input on the parts design and manufacturability.
And we do that to identify and address design or manufacturing concerns before making the parts right to ensure that they're going to successfully meet customers needs.
In addition, though, this allows us to manufacture complete parts in a day, we've taken a lot of time and cost out of the upfront front process of traditionally of doing custom manufacturing. And so being able to make a part in a day is faster than anyone else in the world. And I'm proud to say that after more than two decades, that still holds true. So our speed and low cost to produce those first parts made us a tremendous partner for engineers who are prototyping new product designs. And so that's why we focused on prototyping and, and prototyping drove our growth for two decades.
But what motivated the evolution to expand to production was really a desire to serve our customers needs. Customers were asking us to produce production parts for them, not just prototypes. They wanted to be able to stay with one partner through the lifecycle of their products and thus reduce the risk of changing suppliers midway and reduce the cost and time associated with changing suppliers.
So we had to think about how could we serve those needs.
And what we found was that in addition to speed, our digital process ensures High reliability and repeatability.
Because we've taken out a lot of human variability in the process and in production, quality is often about just that, about eliminating variation.
And so our process does that inherently.
So we see an incredible opportunity in production to grow our business, but also to serve our customers and help them launch innovative new products at scale while reducing their risk in this way.
I can give you an example of a recent customer named Solmetics. They're a medical company that makes devices for water sterilization.
And we've partnered with them to take their products from Design to first 3D printed prototypes, to then injection molded prototypes, to then high volume production molded parts. And this process reduced their risk and helped them to go to market faster by not needing to change suppliers as they went through their product life cycle.
And then I would just add that, you know, the market for production manufacturing is very large. It's actually far larger than prototyping. And so we see this as a tremendous growth opportunity where proto labs can be highly differentiated in many areas.
[00:07:48] Speaker B: Got it. And that leads me to actually my next question. When you say that the market for production manufacturing is quite large, I'm assuming there are also like several players in there who are already making a mark, right? Some established, some smaller. So how is Protolabs differentiating itself in such a large market as you've made the shift?
[00:08:10] Speaker C: Yeah, that's a great question.
So our comprehensive capability to be able to serve our customers across the product lifecycle is actually quite differentiated. First of all, we're the fastest manufacturer in the world. So in prototyping, our customers are, you know, we serve over 50,000 customers who are used to relying on us for their prototyping. So it's very natural for them to then, as they ramp into production, want to stay with the same supplier, especially when they're happy with their quality and reliability and so forth. We've had to expand our capabilities to be able to serve their needs in that area while being very cost effective at those at those higher volumes. And we've done that. And now that we have that end to end capability, we can truly be their partner throughout the product lifecycle. And that's unique. Most manufacturers have to specialize, right? Those that have designed their operations and built them and made the investments necessary to support predictable high volume manufacturing, they struggle with volatility, they struggle with low volume orders. Right. And vice versa.
But the digital manufacturing model that we've developed works across all parts of the product lifecycle.
And so that allows us to serve our customers in that way. And that's a pretty unique and differentiated model that we bring to market.
[00:09:37] Speaker B: Makes sense. And Rob, you mentioned about Digital Twin. As you were explaining Proto Labs business, there are also several other technologies that are helping you to deliver the results, like reduce lead times and boosting production efficiencies for your customers. Right. For example, like injection molding, CNC machining, and 3D printing. Can you talk about some of these as well?
[00:10:02] Speaker C: Yeah, absolutely. As you point out, we offer four manufacturing services, meaning that we manufacture mechanical components through four different manufacturing technologies. And we do that in plastics and metals. Those technologies are injection molding, CNC machining, 3D printing, and then sheet metal fabrication.
These are four of the most commonly used technologies for manufacturing mechanical parts. And they allow us to make custom components across a broad range of materials of both metals and plastics in high and low quantities. And so we work with companies who are designing and launching new products, and when they're evaluating their designs, they are often looking for quick turnaround. Right. So that they can test and learn and further iterate. And we provide them that.
And then furthermore, in early stages of development, there's often many unanswered questions about how the product will be manufactured, using which technologies, which materials. You often have to try different materials to make sure that you're getting the properties you need. And we have a very broad range of materials and manufacturing technologies to choose from. And we can guide the customer in their selection to meet their target price, their target quantities, their target fiscal characteristics.
[00:11:19] Speaker B: And what have you understood? Understood? And Rob, at this stage, shifting gears a little bit to talk about your own journey, when you and I were just connecting a few minutes ago, we were talking about the ex McKinsey connection. But just take us through your career before Proto Labs as well. And what led you to the opportunity at Proto Labs.
[00:11:44] Speaker C: Yeah. Thank you. Well, I guess I would say that my career trajectory has not been a straight line.
As you know, as you kind of summarized, I've had the privilege of having many different roles in innovation in technology, leadership in general management, and other areas. I've been a consultant at McKinsey, and I've been a business leader working in companies large and small, from startups to large multinational corporations.
And I guess I would maybe highlight two lessons that I learned in that journey.
Firstly, it's important for me to always be open to learning, because I found that there's something often many things that you can learn from every situation and every experience.
I learned from the difficult experiences and the positive ones, and every role helped me gain some perspective into the next role and helped me bring something new to the next role. Secondly, I think I found that a combination of disparate areas of thought and different views is just really so often where innovation happens.
And I think so much of economic growth is driven by innovation. I think it's really important to bring together people with different perspectives and points of view, because those different perspectives coming together is often the spark that leads to innovation.
On the flip side, that's also, it can also cause friction. Right? There can often be friction when you have these different points of views. But I lean into that because if you can make it a healthy tension again, that's where I've seen groundbreaking innovation come from.
And that's true in new products, but I don't just mean in products. I think innovation can be in lots of forms, whether that's process improvement, org structure, better ways of operating new market expansion ideas. Right. It runs the gamut.
And that, that's been a key learning for me. But I think doing this can be challenging. Right. And it requires setting up the right environment of respect where everyone feels that they're heard and they have a voice.
That's not always easy to do, but it, it pays dividends. So those are kind of my, my two lessons.
[00:14:09] Speaker B: Got it. And Rob, as you mentioned that you've had varied experiences. What was the most challenging aspect of transitioning to the CEO role at Proto Labs?
[00:14:21] Speaker C: Yeah, well, that was a big transition for sure.
I'm privileged that we have this amazing company and I have an incredible team and that's made the transition certainly easier.
But for me, the transition was around going from really being an operator who was focused internally. Right. Most of my career that was the case.
And so there I was focused on delivering the day, the week, the month, the year. And focused internally. And in the CEO role, the focus is different. It's certainly more externally focused and you have to be very mindful of multiple stakeholders.
In addition, as CEO, the key roles that you play are setting the strategic agenda, aligning the resources and the investments behind that strategy, setting up the structure and building out the leadership team, and then empowering that team in that structure around that strategy to go execute and run it.
And then of course, communicating, communicating a lot, communicating repeatedly to all stakeholders, employees, customers, investors and the communities where we operate so that they understand who we are, what we stand for, what the strategy is, what we're executing, and making sure that you're setting the right culture. So this was certainly an adjustment for me, but it's been Wonderful. And it's a big responsibility and I take it seriously, but I'm also loving it.
[00:16:06] Speaker B: Awesome. And Rob, since you brought up culture, so my question is that innovation and agility is so core to what you're doing at Proto Labs.
What do you do to set that tone? To set that culture?
[00:16:24] Speaker C: Yeah. As you point out, culture is very important. And setting the right tone and establishing that right environment, which makes it safe for people to speak freely and bring their opinions and their best ideas is really key to driving innovation. Right. That's the foundation, I think, of a culture of innovation. Furthermore, I think it's important to set the tone from the top that encourages people to take risk.
And I believe that if everything you try works the first time, you're not taking enough risk and you're not thinking big enough.
But that can be really hard for an organization.
And so I spent a lot of time thinking about how can I. How can the leadership team make sure that we're driving empowerment at every level in the organization so that we have leaders in every level feeling that empowerment, feeling that same tone and that comfort with bringing ideas forward and driving their ideas?
But you have to make sure that your systems and your actions should support your words around that. Right. If you've got a lot of gates and a lot of bureaucracy, you're actually not empowering. Right. Regardless of your good intentions. So making sure you've got those systems in place that really drive that empowerment, I think is critical as well.
[00:17:52] Speaker B: Makes sense. And Rob, just going back to digital manufacturing again, just wanted to talk to you about a little bit of the trends that are shaping the industry. How do you think?
Because this is so top of mind these days for everybody in the industrial sector. How do you think data analytics and AI can be leveraged to boost manufacturing efficiency and improve the customer experience, especially in the space that you are?
[00:18:25] Speaker C: Yeah, I think this is a tremendous technology with incredible potential to do everything that you said and more. And we still don't know all the potential and impact that it can have, but it is something that we invest in quite a lot and are seeking applications in the business all the time.
We use AI and machine learning and certainly data analytics in a number of ways within the business. I'll give you some examples. And we use them both on the factory floor and in the office, both customer facing and operationally. We use them really in many, many aspects of the business. And I'm not satisfied there's a lot more, I think, opportunity for us to use them than we are. But just Some examples, we use machine learning in pricing in multiple arenas, right. To predict customer price elasticity and understand our competitiveness in terms of pricing, making sure that we're price to market and so forth.
We use virtual agents in marketing and sales outreach and a number of other customer facing areas. We use machine perception for quality verification of our products and inspection applications.
We use it to verify equipment setup, inspect tool integrity and other kinds of applications on the plant floor. Those are just some of the applications that we use today. And again, I think this is really still largely untapped and there's a lot more opportunity for us in applications of machine learning and AI throughout the business.
[00:20:10] Speaker B: Got it, Got it. And Rob, what are some of the trends that you find most exciting that you think will shape the future of digital manufacturing going forward?
[00:20:23] Speaker C: Well, manufacturing is undergoing digital transformation. And just like industries before it, like finance, retail, media and others, this is a fundamental transformation that manufacturing is undergoing and it creates tremendous opportunities for economic growth. It means manufacturing, which is one of the largest global industries, Right. Unlock all kinds of potential. It means we can make things in new ways, like through additive manufacturing. Right. That's one aspect of digital transformation, but I think even more revolutionary. It means that as you think about the whole process of manufacturing, we can really change every part of that process from design to prototype to production, to inspire inspection and transform them to work in a way that is faster, more efficient and more flexible all at the same time. So I think this is going to unlock a lot of new applications and new efficiencies. I think it enables us to open manufacturing to new customers, to smaller businesses, to developing economies and things like that reach other parts of markets that were hard to access before.
So I again, I think this is a trend that's unlocking tremendous economic growth and it is really an exciting time to be in manufacturing today.
[00:21:48] Speaker B: Awesome. And Rob, just to just to close this great conversation, you mentioned titanium economy in the beginning of the episode and you've read the book, so you're familiar with the concept that we say that it's not just the Rust Belt, it's actually the undervalued, underappreciated sector of the American economy. That's actually the engine of the American economy. So what are your thoughts on this concept and overall, what are your thoughts on the future prospects for the industrial sector for the titanium economy?
[00:22:22] Speaker C: Yeah, well, first of all, I wholeheartedly agree with that assessment of the of the economy and the importance of the titanium economy and industrial tech in the US and throughout the world. I think it's a very foundational part of the U.S. economy, certainly. And the concept that, and sometimes the image that people have in their minds of manufacturing as being very physical work and sometimes operating in dirty environments and so forth is very far from the truth. Right. At least in my experience with manufacturing. And as we've talked about digital transformation taking place in manufacturing, I think that becomes more and more true. Right. That this is really very intellectual work that solves a lot of really important fundamental problems for the world.
And that's what I see playing out. And from Proto Lab standpoint, our objective is to take advantage of this opportunity. Right. We feel that we're at the forefront of digital transformation and see a tremendous opportunity to grow and to take share over the next five years as we being the fastest manufacturer in the world, all through digital technology. And we combine that with these production capabilities that enable us again, through digital enablement, to be highly reliable and so we can serve our customers across their entire product lifecycle, from early stage prototyping to production to even end of life replacement applications. I see this having a very positive impact on customers in many industries, including regulated and high requirement industries like medical and aerospace, where innovation moves quickly. Right. And they need to partner, they need partners who can move with them with that same agility. And I think we're one example of a titanium economy company that's doing that. But we are certainly not alone and I am very excited to see how this is going to play out over the next five years.
[00:24:28] Speaker B: Awesome. Well, thank you so much, Rob, for making time for us today and sharing your wonderful insights on digital manufacturing and also on the titanium economy.
[00:24:37] Speaker C: Thank you. It was my pleasure.
[00:24:44] Speaker A: Thanks for listening to INA Insights. Please visit INA AI for more podcasts, publications and events on developments shaping the industrial and industrial technology sector.
