Market Watch: CAD/CAM Continues to Drive Subcontracting Business
Posted Oct 07, 2013 in Industry News
Almost 50% of respondents to LMT's Subcontracting Services Survey say there's been an increase in the amount of work they've been sending out to be fabricated by other laboratories and/or manufacturers in the past five years. Much of this increase is the result of the growing demand for digitally fabricated restorations, and is coming from smaller laboratories. Four of the top five restorations being outsourced are zirconia copings and frameworks, full contour zirconia crowns and bridges, zirconia abutments and titanium abutments.
On average, respondents subcontract 17% of their total workload. The most common reasons for doing so: to offer a wider variety of restorations and because they don't have the equipment, staff or expertise in house. "Few laboratories have the capital to invest in zirconia milling technology, but dentists are increasingly realizing that it's a superior product, leading to an increase in demand for quality outsourcing services," says Russell Barron, Noel Laboratories, Inc., Atascadero, CA.
In the removables realm, while cast partial framework demand remains steady, demand for flexible partial denture frameworks is on the rise: 61% of subcontractor-respondents say they've been fabricating more flexible partial denture frameworks in the past five years. Also notable: 44% of subcontractors say they've seen an increase in demand for temporaries during that timeframe.
When choosing a subcontracting partner, the need for quality work is the top priority, and the vast majority of our respondents are happy with the quality of restorations they receive from their subcontracting partner, with 51% rating the quality as "very good" and 31% saying it's "excellent."
However, some respondents say the returned cases always need at least some adjustment or additional finishing: thinning out copings or margins or recontouring abutments and full contour restorations, for example. The key, they say, is to communicate your expectations and develop a cooperative working relationship.
"I often wax cases myself before I send them to the subcontracting lab so I get the results I'm expecting. We stay in touch; I let them know my expectations and also tell them when a large case goes well and I get compliments from the doctor," says Lona Smith, CDT, Smith Dental Lab, Brewster, MN.
A scanner purchase has allowed some respondents to ensure cases are fabricated to their individual preferences. "Being able to control the design is very important to me, even if it's just a coping—and especially if anatomy is involved," says Mark Urata, Owner, Urata Dental Laboratory, La Mesa, CA.
Turnaround time and pricing are also challenges for those sending out work. Tightening in-house schedules, paying for overnight shipping and selecting subcontracting partners with expedited turnaround times are some of the strategies used to avoid missed deadlines. And, although most subcontractors offer a professional discount to laboratories sending work, some respondents say there's not a lot of wiggle room for profitability because they're constrained by what they can charge the doctor.
From the subcontractor's perspective, work from other laboratories isn't the most profitable part of their business; in fact, 60% say working for dentists is more profitable because they can charge higher fees. However, many say they enjoy easier working relationships with other laboratories since they often share the same experiences and viewpoints.
"Another technician, for example, will know that a lack of room on a porcelain case is going to make it challenging for us to match a shade, while a dentist doesn't always realize that," says Dan Gilmet, Owner, Gilmet Dental Lab, Lake Leelanau, MI. "It's usually easier to communicate with another laboratory, because they understand the business and the parameters in which we're working."
In addition, for LMT's survey finding concerning offshoring, click here: http://bit.ly/15i72DM
How have your subcontracting practices changed in the last five years? How do you best communicate with other laboratories fabricating your work? Share your thoughts in the comment box below—our readers would love to hear from you!
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