To grasp the essential role of additive manufacturing in Align\u2019s business model, it is instructive to review the Invisalign process. First, a patient requiring orthodontic treatment has their teeth digitally scanned. The dentist uses specialized software to plot intermediate stages in teeth movement, sending the finalized images to Invisalign for processing. Sets of \u201caligners\u201d are then fabricated, shipped to the dentist and administered at regular appointments (Ex.1).<\/p>\n
<\/p>\n
Exhibit 1: Process Flow Diagram<\/p>\n
Source: Align Technology 2018.\u00a0Investor Day – 2018 Operational Prowess.<\/em> http:\/\/investor.aligntech.com\/investor-relations<\/a><\/p>\n <\/p>\n It is crucial to understand that Align doesn\u2019t simply benefit from additive manufacturing, its premier product, Invisalign, would not be possible<\/em> without it. This is because in traditional orthodontia, the dental equipment is identical for each patient (brackets, bands, wires and ligatures), while the dental labor<\/em> is customized. Thus, it would be impossible to create removable braces, as the hardware doesn\u2019t \u201ccontain\u201d the treatment specifications of the patient, and the patient lacks the expertise to reapply them. Furthermore, it would be prohibitively costly to produce customized aligners via conventional manufacturing as teeth size and positioning are unique; machines would require complete retooling for each patient [4][5].<\/p>\n As highlighted above, by customizing the equipment for each patient, labor time and complexity are drastically reduced. In fact, whereas braces were predominantly the province of orthodontists, the relative simplicity of Invisalign allows general dentists to offer the service as well [6]. These benefits make Align uniquely suited to additive manufacturing. However, it is worth enumerating the more generalized advantages Align receives from its use of 3D printing.<\/p>\n Additive manufacturing grants Align complete flexibility in geometrical design [7], allows them to maintain lean inventories [8] and grants the freedom to create new products without the need for scale [9]. The photopolymerization process involves zero waste. Rent, floor space and labor is reduced as many disparate parts have been consolidated into a single piece of equipment manufactured by a single machine [10] Finally, shipping costs and lead times are reduced as 3D printing equipment can be located in facilities close to the end consumer without loss of efficiency or scale [11].<\/p>\n <\/p>\n 3D Becomes Mainstream<\/strong><\/p>\n In order to keep its technological edge, Align Technology continues to invest heavily in R&D [12], fiercely protects its 420 patents, and partners with 3D systems, the \u201cinventors\u201d of modern 3D printing, to operate its 3 state-of-the-art facilities that produce 320,000 aligners daily [13]. While Align relies on its expertise in additive manufacturing as a competitive advantage, the proliferation of cheap, precise and accessible 3D printing technology actually poses a significant threat. Larger competitors, such as Danaher Corporation and 3M, are devising similar offerings and leveraging their existing relationships and financial capabilities to challenge Align\u2019s dominance in the clear aligner market [14]. The barriers to entry are, in fact, so low that Align views competition from startups offering clear aligners direct-to-consumer as equally threatening [15]. There are a number of services offering DIY aligners for a few hundred dollars and, in some instances, individuals who print their own [16]. Align has taken a number of measures to combat these risks. In 2011, Align purchased Cadent [17], the leading 3D dental scanner used for aligners as well as a number of unrelated procedures. This diversifies their revenues, creates synergies between their scanning and Invisalign services and, potentially, allows them to offer dentists bundled packages. Invisalign has also been actively engaged in a number of clinical trials meant to bolster their status as the incumbent medical technology in the aligner space- the safest, most effective and most familiar option [18]. Lastly, Align is expanding its number of manufacturing facilities, bringing production closer to consumers and further reducing lead times [19].<\/p>\n <\/p>\n Beating Out the Competition<\/strong><\/p>\n With a gross profit margin of 76% [20], I believe that Align should consider lowering its prices to compete with new entrants in the aligner market. Align can afford this measure by reducing its extremely high spending on sales and advertising [21], measures that are no longer necessary as Invisalign has achieved a critical mass of users and penetrated mainstream awareness [Ex.2]. Align should leverage its history to emphasize its track record in safety, efficacy and its status as the only aligner brand to receive FDA approval.<\/p>\n <\/p>\n Looking Ahead<\/strong><\/p>\n No longer untouchable, Align must find its place in a world where 3D printing is cheap and widely available. Moving forward, which is Align\u2019s greatest competition- traditional braces, large medical device companies or start-ups selling direct-to-consumer? Should Align consider changing its business model in response?<\/p>\n (800 Words)<\/p>\n <\/p>\n Exhibit 2: Invisalign Utilization Rates<\/p>\n (800 Words)<\/p>\n <\/p>\n Sources:<\/u><\/strong><\/p>\n [1] Garret Djeu, Clarence Shelton, Anthony Maganzini. Outcome assessment of Invisalign and traditional orthodontic treatment compared with the American Board of Orthodontics objective grading system. American Journal of Orthodontics and Dentofacial Orthopedics<\/em>, Volume 128, Issue 3, (2005): 295.<\/p>\n [2] Benson H. Wong. Invisalign A to Z. American Journal of Orthodontics and Dentofacial Orthopedics<\/em>, Volume 121, Issue 5, (2002) 540.<\/p>\n [3] Press release: 3D systems’ SLA 3D printers enable align technology’s unprecedented use of 3D printing in manufacturing. (2018, Sep 11).\u00a0Dow Jones Institutional News<\/em>.<\/p>\n [4] Campbell, Williams, Ivanova. Could 3D Printing Change the World?<\/em> Atlantic Council, Policy File. (2011).<\/p>\n [5] Invisalign often requires 10-12 sets of aligners for each patient. Wong. \u201cInvisalign A to Z\u201d. 540.<\/p>\n [6] Align Technology, Inc. at Credit Suisse Healthcare Conference – Preliminary. (2013).\u00a0Fair Disclosure Wire,<\/em>\u00a0Fair Disclosure Wire, Nov 12, 2013.<\/p>\n [7] Campbell, Williams, Ivanova. Could 3D Printing Change the World?<\/em> Atlantic Council, Policy File. (2011).<\/p>\n [8] 10% of their 2017 gross sales. Align Technology.\u00a0Form 10K 2017.<\/em> Consolidated Financials and Supplementary Data. Retrieved from http:\/\/investor.aligntech.com\/financial-information\/sec-filings<\/a><\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/Process-Flow.png\")
<\/a><\/p>\n<\/a>Source: Align Technology.\u00a0Form 10-Q 2018.<\/em> (3Q2018): 30.<\/p>\n