At Proto Labs Inc., a specialized manufacturer of custom prototypes and production parts for companies in need of a fast turnaround, e-commerce isn’t just a business process.
More and more, e-commerce is becoming the business, as web sales, which account for nearly all sales, grew more than 15% to $344.5 million in 2017 from $298.1 million. Proto Labs, based in suburban Minneapolis, bills itself as the world’s fastest manufacturer of custom prototypes and on-demand production parts.
Proto Labs provides several types of custom manufacturing that customers can order online: 3-D printing, which uses digital blueprints to construct items by adding or removing materials layer by layer; additive manufacturing, a form of 3-D printing used to add materials to build products; injection molding, a process by which material is forced into a mold to form a product; and CNC, or computer numerical control, a process by which machining or milling tools operate via computer programming.
“We began by digitizing the entire front end,” says CEO Victoria Holt. “When customers need to purchase a prototype they need to do so very quickly.” At Proto Labs, the strategy behind building and evolving B2B e-commerce is all about the speed and ease of buying online—even for its specialized custom molds and related products that can include hundreds of manufacturing specifications.
Proto Labs launched in 1999 with information management technology designed to automate the traditional manufacturing process by developing complex software that communicated with a network of mills and presses to produce products. As a result, Proto Labs could produce plastic and metal parts in a fraction of the time it had ever taken before, Holt says. “The company was built on designing, producing and delivering products very quickly,” she says.
This ability to rapidly produce products complemented its move to e-commerce, which let customers order custom products online for fast turnaround and delivery. Two years ago Proto Labs developed an e-commerce site where customers could place orders for all of these manufacturing services, replacing a former set-up that operated separate websites for each service. Proto Labs, No. 126 in the 2018 B2B E-Commerce 300, builds and acquires both e-commerce technologies and other manufacturers that further its mission to be a manufacturer that uses e-commerce for faster product design and development, faster product prototyping, and on-demand custom manufacturing, Holt says.
In November 2017 Proto Labs completed its $120 million acquisition of Rapid Manufacturing. Rapid also specializes in CNC and provides a sheet metal parts manufacturing service. Its addition expanded Proto Labs’ capabilities in product size and other criteria, the company told analysts in December. Both companies serve customers in the automotive, medical, aerospace and other industries.
Custom product manufacturing can be a very involved process. Product developers and engineers use three-dimensional computer-aided design, or 3-D CAD software, to create digital models representing their custom part designs. It uses the custom designs to create physical parts for concept modeling, prototyping, functional testing, market evaluation or production.
Custom prototype parts enable product developers and engineers to test and confirm their intended performance requirements and explore design alternatives. Early in the product development process, Proto Labs can use such 3-D printing processes as stereolithography to quickly produce an approximate physical representation of a part.
But these representations may not meet product developers’ and engineers’ requirements for dimensional accuracy, cosmetics or material properties. As an alternative, the company can use such 3-D printing processes as selective laser sintering (SLS), direct metal laser sintering (DMLS) or CNC machining to produce low volumes of high-quality custom parts in either metal or plastic. For follow-on functional testing, market evaluation and production runs, Proto Labs typically manufactures parts using injection molding.
Proto Labs has developed proprietary software and advanced manufacturing processes that automate much of the skilled labor conventionally required in price quoting, production engineering and manufacturing of custom parts—and in e-commerce technology to expedite a custom purchase. As a result, once a customer has uploaded their product specifications, Proto Labs can deliver a quote back to the customer in just a few days and mold, inspect and ship a final product out the door in 15 days or less. “Simple parts can be done fast,” Holt says. “In some cases three days or faster.”
The Proto Labs e-commerce site, where customers upload their product specifications and receive quotes, can deliver real-time pricing with updates as specifications change. Troubleshooting aspects of Proto Labs’ e-commerce technology automatically review geometric changes during the manufacturing analysis process to check if issues arise before manufacturing begins.
Today Proto Labs has a diversified e-commerce customer base, and the company is able to handle large amounts of order-related information, Holt says. The manufacturer now generates online price quotes for more than 650,000 design submissions each year. E-commerce technology and a digital-first approach to manufacturing also helped Proto Labs grow its loyal customer base and expand overseas, she adds. Today about 70% of sales at Proto Labs are from existing customers, including about 27% from overseas.
As part of its ongoing focus on digital manufacturing and e-commerce, Proto Labs has a new company tagline: “Manufacturing. Accelerated.” The company’s top priority for 2018 is to “continue to evolve our sales approach and engagement with our customers to drive revenue growth,” Holt says.
Proto Labs sees itself as well out in front among U.S. manufacturers in the race to become more digital and commerce-enabled. The entry of manufacturing into digital commerce “is just getting started,” Holt says.
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