To many SB's

From: Terry Wohlers (
Date: Thu May 28 1998 - 02:19:35 EEST

Vern Carter wrote:

> As most of us know, on Tuesday at the RP&M Conference, Terry Wholers gave
> presentation about the state of the RP industry. In that presentation he
> said one thing that I just can not understand.
> How is this possible and why?

Did I really SHOUT this out? <grin> Seriously, ..... the supply of service
bureaus and the capacity that they collectively represent exceeds the
current demand. Part of the reason is that companies are bringing RP
technology in house, similar to the way companies added large format
scanners and plotters over the past decade. About 10 years ago, there were
an estimated 2,000 scanning and plotting service bureaus, but now there's
only a few hundred. I genuinely hope the RP market grows sufficiently to
fill the capacity at these companies, but I fear that it will not.
Companies that go out of business tend to tarnish the image of this young
and somewhat fragile industry. If you ask SB customers whether they feel
that there are too many SBs, many will say "no." That's because when the
supply goes up, prices go down and customers want low prices.

I certainly did not mean to imply that we should control or regulate the
number of service bureaus, not that we could. I might have suggested that
limiting their number would not be all bad at this point in RP's evolution.
 Additional SBs and capacity (without new and expanded markets) could cause
others to sell off their RP businesses, which would produce "red flags" for
people new to this industry. Consider the title of a story in the May 1998
issue of SME's Manufacturing Engineering magazine. On page 32 it reads: If
RP Is So Hot, Why Are They Going Out of Business? What message does this
send to companies that are new to this industry and considering the
purchase of RP products or services? The sad part of it for me is that I
was interviewed for this story, so I feel somewhat responsible for its
title. I guess it makes for a catchy headline, so editors do what they
have to do.

As Vern suggested, it would be helpful to hear the thoughts and opinions of
others on this subject.

Terry Wohlers
Wohlers Associates, Inc.

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