CAD/CAM Gamble Pays Off for Small Lab
Posted Nov 26, 2013 in Labs & Profiles
"If you want to stay in business today, you can't compete on price. You have to be willing to change and offer something new," says Bob Iuliano, CDT, Owner of three-person Adirondack Dental Ceramics, Queensbury, NY. "I believe bringing a mill into our lab saved our lab. Without it, I think we would have eventually gone out of business."
Four years ago, when Iuliano wanted to start offering zirconia restorations, he did what many small laboratory owners do: he outsourced them. After going through a number of outsourcers, he found one he liked and the arrangement worked well for two-and-a-half years. However, for Iuliano there was one key limitation: time.
"Even though working with our subcontractor, Custom Automated Prosthetics (CAP) was great, outsourcing still took more time than having an in-house system," says Iuliano. "In order for a small lab to succeed in today's environment, we need to service the heck out of our doctors and part of that is turning things around on a dime when necessary—we couldn't quite do that with outsourcing."
Since about half of the lab's cases were milled zirconia—it was spending about $5,000 a month to outsource between 150 and 200 units—Iuliano shared his concerns with CAP CEO, Rob Nazzal. Nazzal ran the numbers to see if it made sense for the laboratory to purchase its own in-house equipment and found that given the lab's fees and potential volume, it could likely pay off a system within two to three years.
Iuliano decided to go for it. He got a loan and purchased about $80,000 in CAD/CAM equipment: a 3Shape D700 scanner, 3Shape software and Roland DWX-50 mill from CAP and a ShenPaz Sintra sintering furnace from Lincoln Dental. "The $5,000 we were spending on outsourcing turned into a $1,200 a month loan payment, plus the cost of materials, so initially we saved a lot of money," says Iuliano.
Handling all the work in house was challenging, but with CAP's support, the lab was able to handle all zirconia cases from day one. For instance, a CAP technician spent three days at the laboratory setting up the equipment and training the staff—which was especially helpful when it came to learning the software. "You can quickly learn how to design single units, but more complicated restorations like temporaries and multi-unit bridges require a very specific technique," says Iuliano. "If we needed help, CAP would immediately tap into our computer and work through it with us. In a few cases, they even offered to finish it for us because we were on a tight deadline."
Iuliano also had another big advantage on his side: his 28-year-old, tech-savvy son, Dustin, who had nine years of lab experience. "This was a huge investment and we really took a gamble," says Iuliano. "Many labs don't realize there's a huge learning curve involved. You need a young person who's progressive and it just so happened that I had one working for me. Looking back, I see that if I didn't have Dustin, I could have easily failed."
Dustin immediately showed a knack for the new digital process—especially working with and troubleshooting the software. For instance, one frustration was that the software would automatically smooth out anatomy even if Dustin didn't want it to. After some experimenting, he discovered that if he closed the file, then reopened it, that didn't happen.
When the lab purchased its digital equipment, its work was split about fifty-fifty between PFM and zirconia units and, once things were running smoothly, Iuliano set out to grow the lab's zirconia business. One strategy that worked well: when a client prescribed a PFM crown, the lab fabricated two crowns—one PFM and one full contour zirconia—and sent them both to the client at no extra charge. "Clients raved about the fit of the zirconia crowns and said they could drop them right in without any adjustments," says Iuliano. Just one year later, the lab's zirconia business has grown to 90%.
Another bonus of taking the equipment in house: in the last five years, almost half of the lab's 20 clients have retired or passed away and Iuliano has been able to recoup some of that lost revenue by offering his milling services to other laboratories.
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