00:00Digital manufacturing, AI, automation, and the next generation of aerospace, robotics, and defense technology are rapidly reshaping how companies build
00:10the future.
00:10Joining us now to talk more about all of this is the CEO of one such company, Suresh Krishna, president
00:17and CEO of Proto Labs.
00:18Thank you so much for being here today. We really appreciate it.
00:22Thanks for having me, Justine.
00:24Of course. So just to get started, for viewers who may not be familiar, give us a quick overview of
00:29Proto Labs.
00:30What you do, who you do it for, and your role as CEO there.
00:35Yes, Proto Labs is the world's fastest and largest prototype manufacturing company.
00:41We work with thousands of customers each year.
00:44We work with small startups all the way to Fortune 500 companies.
00:49Over 90% of Fortune 500 companies work with us.
00:52Any company that innovates will generally come and work with us to build their prototypes.
00:57In an innovation cycle, you build prototypes before you start doing mass production.
01:03So we are the go-to company for developing prototypes.
01:06So anywhere where innovation happens, we are present and accelerate the innovation cycle.
01:12Yeah, that's so exciting.
01:14So basically, you're taking their designs and you're physically creating a prototype that then these companies would use in their
01:20manufacturing.
01:21Is that right?
01:22That is right.
01:23And because we can do innovation so fast, we can make products so fast, we are actually accelerating innovation for
01:31all of U.S. and U.S. companies.
01:34Yeah, I mean, there must be so much demand for that.
01:37And as that demand evolves across all these high-growth industries like space, robotics, AI infrastructure, defense,
01:43how does that keep you on your toes to make sure that you can really have all of the materials
01:48you need to be able to fulfill what your customers are asking for?
01:51Yeah, for us, manufacturing is unique because we are software and digitally-enabled manufacturing.
01:59We have over 1,250 CNC machines that are connected to our website.
02:04So when companies are ordering their parts, they are actually coming onto our website and uploading a CAD drawing, a
02:11design that is a custom design.
02:13And our software, and we have patented software, can quickly provide what we call an instant code and an instant
02:22design for manufacturability,
02:24which provides a 3D rendering of what the part is going to look like.
02:28So the design engineer can quickly decide if they want to move forward with our proposal,
02:33and they can literally swipe using a credit card and place the order, and we start manufacturing right away.
02:39So that's how we distinguish ourselves in this rapidly evolving, highly innovative industrial space.
02:48Yeah, I can't imagine all of the different pieces of the puzzle you need here from the software to the
02:53physical manufacturing capabilities.
02:55How important is speed and flexibility for customers when it comes to this next generation of technologies and products where
03:02everything seems to just move so quickly?
03:04You know, Justine, we've been around for 25 years, and we invented the digital manufacturing space.
03:11What we've seen over time is innovation is moving now at the speed of software.
03:17You have a lot of software companies like Meta and Google that are all getting into producing physical products from
03:24being a software company before.
03:25So they expect innovation to move just at the speed of software, just like they are used to.
03:31They change something, and they can upload something overnight, and that feature is available.
03:35They want the same in the physical space.
03:37We are one of the few companies in the world that can move at that pace, because we can make
03:42a custom part same day and ship it same day.
03:45We are one of the few people that can respond to this.
03:48So what is really needed as innovation moves in space, defense, robotics, AI, infrastructure, all of those, you need companies
04:00like us that can keep up with this pace and help drive the innovation.
04:05We see this now because we are seeing the growth even in the last quarter coming from these sectors for
04:10us, and we are responding by providing this service, unique service, to all of these companies.
04:15I mean, it's just incredible to be able to do all of that same day, that speed, and again, the
04:21flexibility to make that happen is just amazing.
04:24And it seems like the people, your customers, are responding well to that.
04:27You recently reported your Q1 earnings.
04:29What did those results tell you about the current state of the manufacturing economy and how you're positioned within that?
04:35Yeah, what it tells us is innovation is thriving in the United States.
04:39What it tells us is companies are embracing this modern way of having manufacturers provide them the service that they're
04:47looking for.
04:48And it also tells us that there is growth happening in manufacturing back again in the U.S.
04:54And we think that as more and more on-shoring happens, companies like us are poised to take advantage of
05:03that and provide that speed of service to all the industries that are there in the United States.
05:10Yeah, I mean, you're talking about this on-shoring idea.
05:13There's been such a major push towards strengthening U.S.-based manufacturing capabilities.
05:17How are you seeing that trend play out with customers in real time now?
05:21Yeah, that's a great question, Justine.
05:23I just want to remind your viewers that the way manufacturing was happening in the U.S. 30 years ago,
05:30when it left U.S., is not the way it's going to come back.
05:33The way it was there is not the way it is for the future.
05:36The future is the way we do it with software-enabled manufacturing.
05:40We have technology at the forefront, a lot of patented technology that we use.
05:45That is what is needed to bring back manufacturing to the United States.
05:49As companies start to reshore and bring manufacturing close to our shore or within our country, companies like us will
05:58be the preferred provider of parts and services for all OEMs that operate in the U.S.
06:06Yeah, I mean, you keep mentioning the software part of this, which is such an essential component, the software, the
06:11technology.
06:12Talk to us a little bit about the AI part of things.
06:14I mean, AI is transforming pretty much everything across every industry right now.
06:18How is Protolabs using AI and automation to improve digital manufacturing with that speed, the efficiency, and everything that you're
06:25putting out?
06:26Yeah, that's a great question.
06:28We've been at the forefront of embracing AI as it applies to our industry.
06:32We have almost 25 million CAD drawings in our library.
06:37And that library is essential as we use AI to improve our pricing algorithm and make sure that we are
06:44providing the best design for manufacturability rendering.
06:47All of those are the core of what we do.
06:50And we use AI to continue to improve what we provide to our customers.
06:55We are also using AI to help drive efficiency within our operations and continue to enhance the speed at which
07:02we can respond to our customers.
07:03It's managing the machine uptime in our factories, making sure that our machines remain productive, and continuing to optimize the
07:12manufacturing process so we can provide the most optimal cost for our customers.
07:18And because of the library we have, it's unique.
07:21Nobody else can replicate that.
07:23We are in a very unique position to be able to use AI technologies to mine all the data that
07:28is available and make it better for our customers.
07:32Yeah, using all of the historical data, I imagine, can help so much in training those AI models.
07:38Are there any concerns that you have with AI?
07:41Sometimes, you know, there are other challenges that come along with using this new technology.
07:45Are there any challenges that you've had to face or any concerns you have when it comes to AI as
07:50you've been using it so far or as you head into the future?
07:52Yeah, the biggest concern, I would say, from our standpoint, and we anonymize all of the data that we have.
07:58We are working with defense contractors and space contractors, so anonymizing customer information is really important.
08:06And we do that, and that's why our AI tools are only focused on our data, and we are not
08:12making it public.
08:13And we use it internally only to help improve our customers' offering.
08:18And that is something that we will continue to make sure remains as the most important aspect of how we
08:24use AI.
08:26Yeah, and I mean, you've mentioned some of the people that you work with, some of these customers in the
08:30defense industry, aerospace, you work with NASA, you work with Blue Origin.
08:33And as industries like these evolve from drones, robotics, space, continue to scale, what opportunities do you see emerging over
08:41the next few years as we look to the future?
08:43Yeah, I think the biggest benefit I see is for U.S. industry to continue to keep its lead as
08:52the innovation leader in the whole world.
08:54We have tremendous competition from countries outside of the United States, whether it is space technology, whether it is defense
09:02technology or drones, and we work across all of these sectors.
09:05The only way U.S. can continue to keep its lead is to build your innovation.
09:10And the speed of innovation is so critical for us to lead because cycles of innovation in industries like drones
09:17or even in space exploration,
09:20is every time there is a launch, the next launch already incorporates learnings from the first launch right away.
09:26So the innovation cycle are weeks, not months and years, what it used to be.
09:31You think about the traditional automotive world, that is all shrinking as well.
09:35People can get innovation done in less than two years in the auto industry and in space that is a
09:41matter of weeks and drones is a matter of weeks.
09:43So only companies like us can respond to this kind of speed that the U.S. is looking for as
09:49we continue to innovate.
09:52Wow, we've given us a lot to think about.
09:54We really appreciate you breaking this all down for us, Suresh Krishna, President and CEO of Proto Labs.
09:59Thank you so much for being here today.
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