Five International Laboratories Combine Efforts to Create Powerhouse
Posted Feb 09, 2012, Published 2012-02-01
The Aurum Group, headquartered in Calgary, Alberta, forms a strategic partnership with four labs from around the globe.
Mark Maier says it was the perfect storm. In 2008, the economy was floundering, offshore competition was intensifying, and dental laboratory suppliers were getting into the milling center business. Maier's family's laboratory--The Aurum Group, headquartered in Calgary, Alberta--knew something had to change.
"For a while, CAD/CAM was a differentiator, but soon the industry was saturated and it quickly turned into a race to the bottom in terms of pricing," says Maier. "We've never competed on price and we weren't about to. We had to ask ourselves, 'how are we going to continue to differentiate ourselves, increase economies of scale, and bring our business to the next level?'"
The solution: pooling resources with four leading laboratories from around the globe--Cordent Dental Advice Group in Holland, DTS International in Scotland, Race Dental Laboratories in Australia and Protech Precision Esthetics in Spain--to form a strategic partnership called Open Health.
The five partners--which all still operate as individual entities under a jointly owned holding company--have much in common: each is family-owned, has succeeded into the second or third generation, and is well-respected in the esthetic and implant dentistry fields. But strength is in numbers, and under the Open Health umbrella, the partners have substantially increased purchasing and marketing power, improved supplier relationships, and benefit from combined technical know-how and technology research they can pass on to their clients.
Perhaps Open Health's biggest joint venture is the establishment of Core3d Centres--industrial milling centers in Sydney, Australia; Calgary, Canada; Las Vegas; Glasgow, Scotland; Maartensdijk, Netherlands; and Barcelona, Spain (a Japan location opens this year). Although some of the individual laboratories were previously doing their own milling in-house or had established milling centers, Core3d was their opportunity to consolidate their technical know-how, scale and branding to make a big splash in the milling center arena.
"There are a lot of milling centers out there, but there's room for everyone in the market," says Maier. "The laboratories behind Core3d are focused on higher value-added comprehensive esthetics and implant dentistry and have certain expectations about what we'd want from a milling center. Core3d is not competing on price but rather on meeting the demands of similar laboratories."
The Open Health partners opted for an industrial milling platform at Core3d, an investment that was justified given the projected volume of new work. "We decided we had to stop thinking like dental laboratories and start thinking like industrial manufacturers," says Maier. The result was the purchase of 10 DMG Sauer five-axis ultrasonic milling machines that can be loaded with 66 ceramic blocks or discs at once and accommodate a wide variety of materials. The partners also hired engineers from outside the industry to customize the CNC software and tooling selection to ensure optimal results and high efficiency.
Servicing more than 500 laboratories in 15 countries, Core3d's goal is to help its laboratory customers solve the same problems these five laboratories faced before the start of their partnership: how to differentiate themselves in a commoditization market. "The 'value-stack' we offer goes beyond milling--it includes tools to help customers grow their business," says Maier. "For example, Core3d is an Authorized Ivoclar Vivadent Milling Partner and iTero model milling center, allowing us to provide our laboratory clients the ability to efficiently leverage the full digital work-flow chain."
Customers also have access to Core3d's BASE online marketing software where they can design and personalize marketing literature, newsletters and sales letters. Customers can also use Brightsquid Dental Link, a HIPAA-compliant, online platform that improves communication by allowing members of the dental team to easily share and comment on digital photos, X-rays and impressions and CAD/CAM files. And, this year, the group plans to launch the Core3d Centres ACADemy and Core3d Centres Study Club to offer in-person and online CE opportunities.
With these tools, Maier hopes to show laboratory customers they don't have to join the race to the bottom: "Laboratories can and should grow their business based on the value and skills they provide, and not be stuck competing solely on price."
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