Outsourcing: Myriad services for laboratories of all sizes

Benefits of sending work to a third party vary for each laboratory

By Chris Brown, BSEE

Thinking about the concept of outsourcing and how it has changed over the years in the dental industry is interesting. Early dentists in the modern era (post-1800s) produced their own indirect restorations. Until Dr. W.H. Stowe opened what is considered to have been the first successful commercial dental laboratory, Stowe and Eddy, in Boston in 18871, laboratories were few and far between. As the materials, processes, and equipment evolved and dental technicians became skilled in the trade, dentists began to outsource their work to dental laboratories rather than doing the work themselves.

For years, dental laboratories performed the necessary model work, casting, layering, etc. in-house; the only outsourcing that took place was between the dentist and laboratory. However, when large milling machines and another generation of materials came to the market, outsourcing took on a new role. The cost of milling machines was too high for most small and even medium-sized dental laboratories, so it made sense to outsource that work to another company that had the resources to invest in the expensive equipment.

As the cost and size of milling machines have decreased, so has the cost of the materials being milled. Is outsourcing still necessary? Why not just take the plunge and purchase a mill? Where do 3D printers and other additive manufacturing equipment fit into the equation? Does it even make sense to send work to a third party when even a single-person laboratory can effectively handle complex cases now? The answer might surprise you. What might be a wise investment for one laboratory may not be for the one on the other side of town, and vice versa.

Products

In today’s market, zirconia undoubtedly is the first thing that comes to any laboratory owner’s mind when it comes to outsourcing. However, dental laboratories outsource a surprising number of other items on a regular basis. Commonly outsourced items for dental laboratories include:

• Zirconia copings/frameworks, full-contour crowns/bridges
• Margin marking for select digital impression systems
• Pressed ceramics
• Custom implant abutments
• Implant bars
• 3D-printed or printed/cast PFM copings and frameworks
• 3D-printed/milled models, now also including custom implant abutment designs
• 3D-printed/cast partial frameworks
• Dentures
• Night guards, bite splints

In the early days of zirconia outsourcing, laboratories boxed up an entire case and sent it off to the milling center for processing. They relied on their outsourcing partner to perform much of the casework: scanning, designing, and then milling the case using zirconia or a similar material. With the number of laboratories now utilizing model and impression scanners, and dentists now utilizing digital impression systems, the dynamics have changed. The digitization of cases has made it far easier to outsource. Instead of sending physical models or impressions, laboratories now can send cases digitally through website portals or built-in file sharing modules.

Why Outsource?

As with most technology product life cycles, competition has resulted in the cost of milling machines and even 3D printers decreasing significantly. With a majority of laboratories now able to afford milling machines and 3D printers, why would a laboratory still want to outsource? It is a great question—with a very complex answer.

The first and most obvious consideration is, of course, financial. Even though the cost of these machines has decreased, they still require a significant financial investment. A decent milling machine can be purchased for as little as $25,000. But in order for the mill to be useful, a laboratory must also spend $15,000 to $35,000 on a scanner and CAD software, plus another $7,000 to $10,000 on a sintering furnace. Spending money on only a scanner is often far more palatable for a laboratory owner who wants to be competitive and have options in a rapidly changing industry.

Another less obvious and often forgotten consideration is workload. Unfortunately, laboratories have been experiencing a period of downsizing. This has been attributed to competition, a declining number of experienced technicians, and the decreasing amount of educational institutions, among other factors. For whatever reason, there are fewer technicians trying to do more work at a faster pace than they did a decade ago. Consider a laboratory that regularly runs at capacity with technicians working overtime, or a single-person laboratory owner already working at the bench until late into the evening. When milling is added to the production process, it adds time—perhaps as much as 1-2 hours of production work time per day in small laboratories, or 8-10 man-hours per day in a medium-sized laboratory. Milling in the laboratory yields financial and control benefits, but the additional time required means new staff or longer hours are necessary. This is a business decision a laboratory owner must weigh carefully.

Most laboratories have a model department. Most employ waxers and ceramists. They have core competencies in the necessary areas. How many laboratories employ experienced mill operators? How many have people who can learn CAM software and monitor a mill’s performance? Milling crowns is relatively easy, but milling implant abutments can be somewhat more complicated. Milling bars raises the complexity to a whole new level. How many laboratories have somebody who can recognize when it is necessary to change tools, clean or replace a collet, or replace the spindle? Who will perform regular calibration, change cutting fluid, and perform other maintenance procedures? While the tasks are not complicated, they require attention to detail. Sometimes deductive reasoning, critical thinking, and a degree of mechanical aptitude are helpful as well.

Outsourcing is an easy way for laboratories to offer products and services they might not otherwise possess the capability to manufacture. Digital dentures, milled implant bars, bite splints, and surgical guides are just a few of the products that many laboratories cannot produce themselves but can easily outsource. Laboratories have been involved in the production of custom implant abutments for years, but now digital workflows are offering them greater creativity and control while often reducing the cost of production.

Another consideration that likely will become more significant in the near future is the FDA. The US governing body is beginning to scrutinize laboratories and milling centers that mill custom implant abutments or bars, or produce bite splints or aligners. These laboratories and milling centers are expected to adopt the QMS (Quality Management Systems) principle for manufacturing; register with the FDA; and in some cases gain 510k approvals. FDA compliance comes with a cost, including annual fees and also the documentation and tracking that the FDA requires once a laboratory is classified as a medical device manufacturer rather than an exempt entity.

Outsourcing Disadvantages

While outsourcing provides many benefits, there is a downside—most notably the lack of control. Turning over responsibility of any part of the production process is never easy for a laboratory owner. Inevitably, questions surface regarding whether another company is capable of performing up to the laboratory’s standards. Prioritization and delivery of the case are no longer within the laboratory owner’s control.

Another disadvantage is cost. Laboratory owners looking to minimize operating expenses quickly learn that paying others to perform tasks can cost more than doing it themselves. Outsourcing partners must purchase the equipment, hire the staff, and attempt to earn a living as well.

Decisions

Ultimately, outsourcing must be a business decision. You must weigh the costs of in-house production equipment and staff training plus the risk of dealing with internal remakes due to milling, sintering, shade, or printing issues against the costs of turning that responsibility over to somebody else.

Outsourcing is often a good idea for laboratories that are already too busy and do not have extra man-hours available to perform the necessary tasks. It is also a good idea for laboratories that are unwilling to learn new manufacturing techniques and do not want to be burdened with new equipment to maintain. Laboratories that want to focus only on maintaining the creative and artistic aspects of the process, and are willing to allow others to perform the mundane manufacturing tasks, also are good candidates for outsourcing.

For those who want to maintain control over every aspect of the production process and can afford the investment cost, time, and training, outsourcing becomes the exception rather than the rule.

Is one path better than the other? That answer can only be determined by the individual laboratory owner’s priorities, expectations, and staffing, not by looking at what the neighboring laboratory is doing. Each laboratory has different customers, staff, and priorities. The smart owner learns when to outsource and when to keep the work inside.

Reference

1 . National Board for Certification in Dental Laboratory Technology. History, Regulation & Organization in Dental Laboratory Technology. nbccert.org/about-national-board-certification/history-of-regulation.cfm. Accessed July 12, 2015.

About the Author

Chris Brown, BSEE, is the Manager of Aclivi Consulting in Pinckney, Michigan.