What is the Real Cost?
Critical factors in determining which processes work best for your business
By Susan van Kinsbergen
At this point in the history of our industry, there are big decisions facing just about every laboratory, large or small. Should you step into the world of digital technology? Does it make financial sense to invest in that scanner or mill? What about outsourcing? Many of us have already dipped our toes in the vast ocean of outsourcing possibilities, but have yet to dive in head-first. Let’s take a quick look at some of the factors that should be considered before making decisions regarding the future of your business.
At first consideration, material costs seem pretty easy to calculate—it’s simply whatever you pay for your materials. However, this approach is not entirely accurate. Less expensive materials may negatively impact production costs, as less expensive materials may not work as well as their pricier counterparts and could end up costing more in labor and internal remakes. If your technicians are saying that their new burs don’t work as well as the old ones, what they’re actually telling you is that the task you’re paying them to do takes longer than it did before, or that it’s more fatiguing, or the material is less predictable. Reducing productivity to save a bit on materials can actually significantly decrease your revenue.
Now consider the tasks your technicians are taking on. If your most expensive technician is working with your least expensive product, is the case really worth the amount you’re paying him or her? Business owners and managers need to establish what an hour of their time is worth. Maybe it’s $25, maybe it’s $300. Business owners probably do a little bit of everything just to get cases out the door. If you’ve determined your rate is $200 per hour, then should you really be pouring that model? Would you be paying a model technician $200 per hour? Probably not. Now, I understand it may not be realistic to leave a task that needs to be done for someone else—that case needs get out the door—but once you understand this concept, it will carry over to your whole staff. All around, you will be able to make much smarter decisions about how to spend your labor dollars.
Outsourcing some of a laboratory’s processes can save money. For example, you may consider sending long-span zirconia bridges to a milling center because they tend to be tricky to sinter. Although your laboratory may have the equipment and the dental IQ to handle these types of cases, they aren’t a part of the everyday workflow. As a result, doing them in-house can take an excess amount of time and may require more than one attempt to execute correctly. Therefore, by sending the models and a wax-up to an outsourcing partner, your laboratory can maintain complete control over the cases, and ensure a more consistent final result. The outsource company will fit the bridge to the model and return the case ready for porcelain application.
Now let’s turn our gaze toward digital dental technology. It is very likely that your laboratory will require digital technology at some point in the near future, if you are not using it already. However, for small laboratories, the idea of incorporating digital technology may be daunting.
However, if you have a shipping box and some packing tape, the digital world and all the products therein are at your fingertips through outsourcing partners. As your business grows, it will make more sense to introduce CAD/CAM into your fabrication process because it allows for a quicker turn-around time and ultimately a greater capacity. Also, in most cases, digital design is faster than hand waxing in terms of labor, though not in the time the case spends in the laboratory. A case will spend more time in the digital workflow than the analog workflow. A highly skilled crown and bridge technician can wax a gold crown and in a matter of minutes and invest it. When calculating the time it takes to move a gold crown through the digital workflow, it is necessary to count design time, mill time, time spent adjusting the wax unit, as well as time spent then sealing the margins. It probably takes two to three times as long to get the digital unit invested as the analog one. So why would anyone choose the digital method? For one thing, less skilled, less expensive technicians can do the designing. Also, the designing step is also faster than waxing. Also, milling doesn’t require labor—once the mill is started, the technician can move on to more cases. This increases a laboratory’s capacity and productivity. However, one of the most important pieces to consider when deciding on a workflow is whether everyone doing what they do best. In other words, you want them doing tasks that are equal to their wage. You also want the less experienced, less expensive technicians doing everything else. A digital workflow lends itself to this goal.
As an owner, manager, or supervisor of a dental laboratory, there are many decisions facing you in this business. How much do things really cost? Materials, labor, equipment, and workflow are all important considerations that will help you make good decisions for your business.
About the Author
Susan van Kinsbergen is the owner of SvK Consulting in Newport Beach, CA.