Since taking the helm of 3D Systems Corporation (NYSE:DDD), Vyomesh Joshi (VJ) has gone to great lengths to communicate with investors, analysts and journalists. To this end I was invited to visit the company’s innovative Healthcare Technology Center in Littleton, CO where I spoke with 3D Systems’ CEO VJ and EVP, General Manager, Metals and Healthcare, Kevin P. McAlea.
This was my second formal interview with VJ, our first took place during Chicago’s IMTS and while we brushed shoulders during Formnext the CEO was eagerly showing visitors around the company’s booth. This eagerness, or enthusiasm, is one of the first things that comes across from VJ.
Having attended countless earnings calls and press conferences and read through endless press releases such genuine enthusiasm is surprisingly rare.
“Manufacturing is the future”
Prior to VJ’s selection and appointment as CEO in April 2016, 3D Systems had accumulated a bewildering array of 3D printing companies and sometimes only marginally related businesses. Analysts were divided over whether the results of this spending spree, with an average of 9 acquisitions per year from 2010-2014, could be spun into a coherent business.
“I don’t think people understand our assets, I don’t think people understand what Kevin and the team have done,” says VJ, “once they see it, and once they get it, (people understand) that this is the formula to go and build all of our verticals.”
“3D Systems historically was a prototyping company and we built a very successful business based on prototyping and now we think that manufacturing is the future,” adds McAlea.
The Colorado healthcare facility opened in March 2016 and gives a solid impression that the enterprise is not only heading in the right direction, but more importantly has a destination in mind. Healthcare for 3D Systems is a gold standard, if the company can succeed in this tightly regulated environment then the resulting knowledge, discipline and operational agility can be translated to other segments.
3D Systems’ employees are a vital part of the future success of the enterprise. Having spoken with a number of employees during trade shows this year, this group appear onboard. Comments made to the anonymous, online employer review service, Glassdoor, generally support this perspective. Although some reviews do indicate that the required changes to take 3D Systems forward are not yet fully embraced by all at the company.
“It was a learning experience in terms of acquisitions we’ve made, the skill sets we had, the skill set we developed in terms of what is takes to be successful in manufacturing, it is quite different than the model we had in terms of prototyping,” says McAlea on the challenges facing successful integration of acquisitions and an expanding business model.
The future of 3D printing for production?
Displayed next to reception at the Colorado facility is a working module from 3D Systems’ Figure 4 configuration. During my visit I am given a tour of the facility, this lasts approximately 60 minutes and by the time I return to reception the Figure 4 module has completed its print run of a full scale model of a human hand’s bone structure. Despite my repeated efforts, 3D Systems still remain tight-lipped on the precise nature of the materials that make this possible. Most likely this will be a story for 2017, as will the specifics of how Figure 4 will be commercialized. This much VJ will say, “materials is going to be a very important part of the innovation of Figure 4.”
“If you combine Figure 4 with a biocompatible material and some of these workflows we’re talking about, you could set up a localized surgical planning unit. For example in a hospital,” says McAlea. “I do see this as a long term trend” he adds. One possibility is that hospitals may use Figure 4 to bring production of medical models onsite, as with any healthcare venture there will be significant regulatory hurdles to pass. McAlea highlights an advantage of 3D Systems in this regard,
Breaking out 3D printing in healthcare is relatively new. We’re talking about class 2 healthcare devices, the first one was back in 2012 so even at large companies their knowledge about design issues, their knowledge about regulatory issues about how to get a 3D printed device cleared is still relatively low. So if there is a partner like 3D Systems who has knowledge and know-how, that makes you a very valuable partner.
Becoming a manufacturing company
VJ tells me, “Figure 4 is very exciting technology, I really believe that in my heart, and I said so in Chicago and then at Formnext that for the first time I see a technology that is really going to help us get into light production.”
The implementation will be different depending on the use case and it will be very broad. It will touch all of the customer segments that I have been talking about.
Working with customers in this manner also requires ensuring that application engineers are available to serve as guides. McAlea explains, “the low risk path for (potential customers) to get into this is to use us as an outsourced partner and then when it gets critical mass internally they move to a mixed model where they bring some of that inhouse.”
VJ says, “if you want to go from prototyping to manufacturing you need to really understand what use cases will meet customer needs.” Drawing on his experience in the 2D printing world with HP, the CEO elaborates on this solution based approach,
We wanted to go from the Heidelberg analog printing press to the digital press, I had to go use case by use case: from books, magazines, marketing collateral. You really had to understand the solution to each.
I saw the example in healthcare. What they have done is “let’s start just with facial reconstruction and orthopedic” rather than go (immediately) to cardiovascular where there will be a lot of opportunity. You’ve got to figure out that use case, that particular segment, and then see can you really help (the customer) through the whole design and simulation process.
Because AM is a technology, the innovation and the new design are the real value. A lot of people just say, “ah it’s a plastic printing technology.” It’s not, it’s about starting from the design. Because once you do that you can create more shapes more ways, and that is what Healthcare really is about.
The immediate future for 2017
“I have always said SLA and SLS are our core technologies, you know production technologies, and a lot of service bureaus offer an SLA/SLS solution as a standard. You can talk to the service bureaus who are really leading the market and they can tell you that,” says VJ.
As inventors of the first 3D printer, 3D Systems have a long relationship with many service bureaus and this user group can provide valuable insights from the front line of 3D printing. From visiting bureaus, and attending user days by other 3D printing manufacturers, this group can be incredibly loyal to the manufacturers who have helped them grow their own enterprises, but also have some of the most critical insights into the technical limitations of the technology.
Of course, 3D Systems are not just about 3D printing with plastics. Availability of the 3D Systems ProX DMP 320 metal 3D printer was announced at CES last year. VJ says the machine is, “not just for healthcare, but also for aerospace for a lot applications” and coupled with their new 3DXpert software the company is now positioned for success in the 3D metal printed market. “We’re going to be really ramping up our metals business in 2017,” VJ adds.
Looming over the 3D Systems Healthcare Technology Center are the mountains where fortunes from the 1850s gold rush were made, the town of Littleton itself was built on the money made at that time. It’s arguable that 3D Systems was swept up during the 3D printing equivalent of the gold rush, events that peaked during 2014. The question is whether a sustainable long-term venture is possible now the hype has subsided. VJ certainly has the vision and has installed trusted associates to carry out the task. Will this be enough? In the CEO’s own words, “stay tuned!”
For a behind the scenes look at 3D Systems’ state-of-art healthcare facility then click here. If you want to nominate this company, or another 3D printing enterprise, then follow this link to the 1st Annual 3D Printing Industry Awards nomination page.
Featured image shows 3D Systems CEO, VJ during Chicago’s IMTS. Photo by Michael Petch.