The Writing On the (Great) Wall
Posted Apr 28, 2011 in Management
On the heels of our April 2004 cover story, Offshore Competition, laboratory owner Flemming Behrend, CDT, MDT, Fellow ICOI, shares his firsthand perspective: he's made two visits to China in the last four years, met with a Chinese government official to discuss regulation, spent time in three Shanghai labs and made some unexpected discoveries along the way.
Four years ago, I spent two weeks training young Chinese technicians at DentUSA, a laboratory in Shanghai owned and operated by my friend, Steve Li (for related coverage on DentUSA, see Offshore Competition: a Shanghai Lab's Perspective). I was impressed with their eagerness and willingness to learn. Last month, I returned with a different and personal agenda. I wanted to learn about the overall development of Chinese dental laboratories in the present context of globalization and outsourcing.
Like many of us, I had preconceptions and concerns, particularly about the issues of safety, infection control, material quality and working conditions. I assumed there would be little to no government involvement in either standardization or compliance. However, I'm pleased to report that I was mistaken about a lot of things, not the least of which are government regulations.
Li arranged for me to meet with Senyong Lin, director of Shanghai Municipality Drug Administration (SMDA). After initial introductions over tea, Lin explained the Chinese government's attempts—initiated in January 2003—to regulate the laboratory industry. In Shanghai, there are about 2,000 dentists, half of whom operate in shared private clinics; the other half practice in government-run hospital clinics. They serve approximately 22 million people in the city and its suburbs.
All laboratories, whether they serve the private or public sector, come under the jurisdiction of the Department of Health. They are classified as type 2 medical device manufacturers and must obtain a license which covers the fabrication of all types of dental restorations except implants and ensures that labs comply with the infection control guidelines set by the SMDA which are similar to OSHA guidelines in the U.S. Given the current climate of fear about cross contamination, I found this both reassuring and necessary. There is a second—and more stringent—license for implant work but no one has obtained this license yet.
Currently, there are 20 licensed labs in Shanghai. To become licensed, the laboratory must undergo a series of procedures including inspection by government agents, most of whom are local police officers. Licensed laboratories must use materials that are approved by the State Food and Drug Administration, a government bureau that is the equivalent of our FDA. In addition, the SMDA requires that certain educational standards be met. Fifteen percent of the technicians in each department must have completed at least a two-year dental technician training program at a government-sponsored school. These technicians then oversee and train incoming employees.
Lin was helpful in answering all my questions about regulation and compliance. He acknowledged that the SMDA is aware that it's taking time for all labs to be licensed and explained that as soon as the SMDA becomes aware of a laboratory's existence, it sends a representative to inspect the lab and begins the licensing process. I found his openness and honesty refreshing.
I also visited three large laboratories in Shanghai, which laid to rest my own assumptions that the laboratory work was a "free for all." First, I returned to DentUSA. Since my last visit, it has grown from 60 technicians to over 300. Daily production runs an average of 500 cases (partial frameworks, dentures and almost all facets of crown and bridge, including roundhouses and multiple units) and the turnaround is five days. The laboratory gets about 40% of its work from laboratory clients in the U.S.; the rest is from national and other international clients.
The technicians are young people in their late teens to mid 20s. Each department has an English-speaking manager who oversees the quality of its work. Li's policy is to hire students who have finished their two-year technical education then train them further for three months during which they receive room and board plus salary. I couldn't tell you what the salary is because that is the one question you don't ask in China.
My second visit was to Mecodent Dental Technology Co. Ltd., a subsidiary of a Hong Kong laboratory. Mecodent has been in business for about 10 years and employs about 100 technicians. The Hong Kong owner, the Shanghai manager and several other technicians were trained in Japan.
Mecodent is modernly equipped, well regarded for its expertise in partial frameworks and is a certified Vitallium® laboratory. It primarily serves dentists in the Shanghai hospital system, produces 300 cases per day and offers a three- to five-day turnaround time. Each department is impressively clean and the work environment is bright and friendly. The model department produces high quality models and the bridge frameworks illustrate an excellent knowledge of waxup techniques. The lab uses top brand porcelains and all its equipment is new and well kept.
My last visit was to Shanghai Hesheng, where I met with General Manager Qian Yuan. This is the oldest privately owned laboratory in Shanghai and is situated on the twenty-eighth floor of a modern office building in an affluent business area of central Shanghai. There are large windows that provide a fantastic view of the Shanghai skyline and the HuangPu River .
The lab employs 30 people and produces about 100 cases per day. It is equipped with the newest and highest quality equipment and the work environment is absolutely outstanding.
The most salient difference between Shanghai Hesheng and the first two labs is the production style. Each technician is in charge of a case from waxup to porcelain completion. When I told Yuan that this is the way I had worked in Germany, he said he had imported this production practice from his own German experience. What impressed me was their speed: in Germany, each technician has eight working days to complete a case; his technicians complete the case in two to three days, and their quality is similar to the work of many production labs I've seen in the U.S.
There are, however, some astonishing differences in working conditions between Chinese and U.S. labs, which were evident in all three facilities. None of them is centrally heated or lit. Thus, lights are turned on only when needed, the temperature is quite chilly and most technicians wear layers under their lab coats. It made sense to drink a lot of hot tea!
According to Li, this is due more to the need to conserve electrical power than the expense of electricity. Businesses in Shanghai use the least amount of power possible to prevent outages and rolling blackouts that would otherwise occur on a regular basis.
It is impossible to visit Shanghai without being impressed by the spirit of the Chinese people. The reservations I harbored against globalization were quickly diminished when I experienced the magnitude of the population and the demand for work. It is so easy to fall victim to the scary images of "slave labor" we see in the media. There are, of course, egregious instances of abuse, but there is another reality that is more prevalent--a desire to work, to work hard and to be successful.
In theory, Chinese laboratories are more regulated than in the U.S. but it's hard to determine if the regulations are really working as they are set up. Just as in the U.S., regulations are only as effective as the level of compliance among laboratories. In addition, there is an absolute willingness and open attitude toward trade with the U.S., both coming from government agencies as well as from the entrepreneurs in the private laboratory sector.
The Chinese dental technicians still have a way to go when it comes to producing top quality restorations, but I think they're going to get there. What China has going for it is a vast number of young people willing to work and study harder than we can imagine.
After my first trip in 2000, I saw the writing on the wall and predicted the rapid development of the Chinese market. Today, it is written in English in the laboratory brochures they are producing for the world market.
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