Inside Dental Technology
May 2013, Volume 4, Issue 5
Published by AEGIS Communications
Lending a Helping Hand
Utilizing outsourcing to strategically stay ahead of the game
Today, businesses challenged by dwindling human resources, rapid shifts in restorative product loyalty, and aggressive developments in new material technology have the ability to keep their businesses relevant and competitive through use of partnerships and collaborative arrangements for sourcing product manufacture. What once was considered merely a business strategy for relieving production overflow is now a strategic necessity for retaining a business’ ability to respond quickly to changing business environments with less investment in capital and labor.
The strategic use of an outsource provider allows businesses to focus heavily on their core competencies—those products that are central to the success of the business—and leverage those products that are peripheral or outside the capabilities of in-house production. Strategic outsourcing allows business to gain in competitive advantage, position the business in new markets, and increase production output. It is a winning strategy for business owners who are able to recognize the strategic value that outsourcing can generate.
Implant-Retained Bars in Today’s Digital Environment
Making the most of the newest technologies
As dental technicians, we are often resistant to change. How often do we hear, or find ourselves thinking: “Our ‘tried and true’ ways work, so why bother with learning something new?” The digital age is upon us and has been for some time. It has impacted our workflows and the way our products are viewed by the dental profession. For many technicians and clinicians, unfortunately, the decision to go digital is still driven strictly by price. Yet, there are real benefits in applying current technologies to the more “customized” aspects of our industry, such as implant-retained bars.
Real Cost Benefits: Digital Design vs. Analog Workflow
With today’s often-slim profit margins, dental professionals at all levels in the industry tend to devalue our time as a critical part of our costing equation. How much is your time worth? How much do you pay your technicians?
It is difficult to estimate the time involved in producing any custom product in the laboratory, especially one like implant-based bars. In a comparison per unit breakdown of the time a technician spends on a case for digital versus traditional analog methods based on a more common in-laboratory denominator: pressed/cast single units, there are definitely individual labor time savings in going digital.
In many cases, using digital production methods can more than quadruple a technicians output compared to analog methods. Plus, the digital workflow is more consistently precise and repeatable. What if there is a problem with the case as it proceeds through the laboratory? When considering the analog production process, an issue as simple as a cracked ring in the furnace can cause everything the technician worked on to be lost. The same holds true when a unit cracks in the glaze bake, or if a ceramist misfires and melts a unit. When using analog production methodologies, if something goes wrong, the technician must start the case from scratch. With digital systems, the technician can simply resend the case with only 45 seconds invested in the procedure. This escalates the estimated time savings on a remake to 21 minutes, 45 seconds. These are numbers that drop to the bottom line of any laboratory.
Digital technologies allow technicians to greatly increase their workflow in all areas of the dental laboratory. Regardless of the type of restoration or the materials being used, a digital workflow is simply faster and more streamlined. Using conventional “analog” processes, this further complicates matters and slows the technician down even more. With digital production methods, the same process is used for different materials and restorative types. How about custom implant abutments or even bars? The same technician using digital methods can create these just as quickly and easily.
Precision and experience are critical with implant-retained bars. Although we all know this, it deserves repeating. The biggest difference with digital workflow isn’t being faster or more efficient; it’s the precision. When you are looking for a milling center to partner with on bars, make sure the company understands how to achieve the precision necessary for a “passive fit.” There are laboratories in the industry that have purchased a scanner for close to $30,000 that simply was not accurate enough to achieve this passive fit. A modicum of research and another $3,000 would have given them the scanner they needed.
Have a vision of the desired final outcome before you start the case. Implant bars are a great example. If you gave the same case to 100 production centers, you would have at least 100 different desired designs for a bar. Partner with a company that can see your vision and show you how to make it a reality.
Proper design concepts are still as important as ever. Whether designing on a computer or manually, don’t forget everything you have learned as a technician about what you need to do to properly design a case. Too many technicians think the computer knows dentistry—it does not. The digital workflow enables machines to do the mindless manual work, or allows the technician to do a step once, and not have to redo it later. It does not replace the technical abilities and knowledge on proper design.
Don’t restrict your results before you even begin. Make sure the milling company you choose to partner with works in an open environment that eliminates any system-imposed limitations on the design. Just as important, make sure that business partner also has the experience and know-how to make your vision a reality. For example, can it create bar shapes that give you the flexibility to design for greater support and strength in the bar with certain fixed areas that make sure a particular clip or dimension was not violated?
Do your research and find a partner that can produce to the exacting standards that you require.
Mark Ferguson is the assistant manager and dental solutions integrator at Core3dcentres USA.
The Skinny on the Big
Outsourcing options for any size laboratory
Outsourcing can be defined as the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. Companies have always hired contractors for particular types of work or to level off peaks and troughs in their workload, and many have formed long-term relationships with firms whose capabilities complement or supplement their own.
However, the difference between simply supplementing resources by “subcontracting” and actually outsourcing is that the latter involves substantial transfer of specific business activities to a company with the required core competencies. Subsequently, this allows both companies—the outsourcer and the receiver—to improve their company’s focus on a specific type of work.
As a business concept, outsourcing has been relevant to manufacturing for a long time. The practice, however, wasn’t officially recognized and named until the late 1980s. Initially, companies were likely to outsource if they needed to reduce their costs or employee count. Unsuitable in-house structure and inadequate staff also push companies to look outside their own businesses for services, and new catalysts are honing in on their most lucrative capabilities.
Why laboratories decide to outsource can be understood when considering in-house capabilities, workload, and staff competency, as well as the industry’s current landscape. Of the 10,482 dental laboratories known in the United States, there are:
- 3,000 laboratories that have only a single technician
- 1,600 NADL members, 80% of which are small labs
- 33,600 dental technicians—down from 48,000 from two years ago
The fact that nearly 30% of all dental laboratories have only one technician signifies the necessity of outsourcing for many of the nation’s laboratories. Today, more than 50% of dental laboratories outsource to local providers, regional manufacturing centers, and centralized or offshore manufacturing centers. This interdependency exemplifies the industry’s overall take on outsourcing; it tends to work.
Benefits of Outsourcing
A major benefit of outsourcing is that you pay as you go. If you decide to take on in-house milling, your laboratory will be burdened with substantial fixed costs. However, if the choice is to outsource milling instead, the costs will vary. The most strategic purchase for a laboratory today, irrespective of size, is an open architecture scanner. This allows the laboratory to engage with an efficient outsourcing partner. Additionally, the laboratory owner keeps his or her milling options expansive without having to invest in so many different types of technology. For example, the outsourcing laboratory will be able to obtain Zirlux™ Full Contour Zirconia products just as easily as IPS e.max®, whereas the laboratory that decides to mill in-house may have to decide on whether to purchase the equipment for milling one or the other. The most appealing benefit is that outsourcing allows laboratories to expand their product lines without necessarily having to invest in new technology and hiring new staff to manage that technology. This helps smaller laboratories compete at the same level as larger operations.
Perhaps the most appealing aspect of outsourcing is the capital investment required to get started, compared to the fixed cost model of acquiring the necessary capabilities to mill in-house. Consider the cost of buying equipment to produce a single full-contour unit in-house: tabletop milling unit ($35,000), open architecture scanner ($23,000), sintering oven ($8,000), full-contour zirconia inventory ($1,000), and bur ($500). The total cost is $67,500. The price to start outsourcing—$0. This allows smaller laboratories with less access to capital to compete head on with larger operations.
For large operations, outsourcing allows them to handle overflow production to increase volume and dollars. Large laboratories can produce so much more than smaller operations because of the scale of their operational facilities and available resources. However, even if a larger laboratory has the technology and management power in place, spikes in product demand and the unfortunate setbacks of technology malfunctions and downtime may require an alternate source of product. When demand spikes unmanageably or technology fails unexpectedly, outsourcing is sometimes the only option to to maintain customer satisfaction while maintaining profitability.
Outsourcing is not just for those laboratories that need to reduce production costs or reduce head count, and it is not only for businesses that are booming or experiencing equipment malfunctions. It is a valuable resource and option for any laboratory in the industry because it is always available when most needed.
Terry Fine is the president of AMG Creative.
Impacting Business Growth Through Outsourcing
Laboratories are now forming partnerships through a digital workflow
A committed digital outsourcing partner can be very helpful in developing the right digital strategy for your laboratory. With the right strategy, laboratories can become better positioned for growth and more resilient to business challenges from severe shifts in dentist preferences to changes in economic conditions. Digital workflow has great potential to reduce labor per unit rates and increase workflow efficiencies, while offering a more robust menu of options.
The evolution of business-to-business sourcing of custom dental restorations has entered a new and exciting phase for dental laboratories. Digital workflow now provides many more material options and solutions to a wider array of clinical conditions. Laboratories are now empowered to develop a fully integrated digital strategy throughout the laboratory and are no longer limited to a select few materials. With the right outsourcing partner, these material options can do more than just shift the burden of manufacturing and help drive business efficiencies. Laboratories can now provide a significantly larger number of product offering to dentists. The opportunities for dental laboratories to prosper are more exciting than ever before.
Through a solid, stable, and committed digital partner, laboratories have access to material options that hit every mark for quality, material category, and price. Within a traditional laboratory it was extremely difficult to offer all categories of PFMs, zirconia, and unique products, as well as keep inventory of various noble and high noble alloys. With a qualified sourcing partner, all of these options are easily accessible to dental laboratories with the simple click of a button. Today, laboratories have the ability to offer unique clinical solutions, increase client loyalty, and ultimately create opportunities to develop new clients.
Recently, the feature story published in the March 2013 issue of Dentaltown magazine focused on restorative materials, with the executives from three clinically focused companies commenting about the importance of material options for treating dental needs. One executive in particular emphasized the significance of dentists including various forms of metal ceramic options in their treatment armamentarium. In that same issue, the founder of Dentaltown, Dr. Howard Farran, forecast a resurgence of dentistry in the near future siting recently developing trends in his practice of diagnosing and treating more root canals and crowns as a percentage of gross income since 2007. The decay left untreated over the past six years due to the economic downturn, decay that could have been solved with a simple filling, now requires a full coverage restoration. With this predicted resurgence of dental cases on the horizon, now is the time for dental laboratories to find a trusted partner who can support their workflow and increase their product offerings to stay competitive within their local markets.
Companies firmly committed to the success of dental laboratories have invested significant resources over the past few years to help laboratories capitalize on these dental trends. With just a scanner and the right strategic outsourcing partner, laboratories can better manage the manufacturing process and continue to grow.
Ashley Skitt is the marketing manager at The Argen Corporation.