Offshore Outsourcing: 'A Greed-Driven Business Model'

Jim Thacker · August 7, 2012

    Jim Thacker

    Vice President at Utah Valley Dental Lab/UVDL

I understand you taking exception with the over simplification of the outsource issue but to say that it's a "greed-driven business model" is an oversimplification of its own. Domestic dental labs who compete primarily on price are facing a crisis to stay in business. Rather than greed, their very survival depends on their ability to use offshore labs to take advantage of cheap labor. Our medium sized lab has a parade of small lab owners seeking work because they simply can't afford to make a living wage in the current market with their lack of capital & business acumen. There's a simple reality that labs who have made a living making crowns out of their basement for $1 cheaper than the lab down the street are disappearing. Although I feel bad these labs are closing and the challenges of change, I'm not convinced that this shakeout is necessarily a bad thing for our industry.

US labs need to quit whining about the offshore problem and work toward finding ways to compete in ways other than price. Finding ways to improve compliance and material integrity is only part of the solution. Domestic labs will ALWAYS have a competitive advantage in turnaround time and the ability to forge personal, meaningful business relationships with their dentists. Successful labs will find a way to incorporate automation, efficiency, artistry, and other value-added services to their dentists. As long as labs keep acting like vendors to their customers rather than partners in mutual success, the profession will continue to "cheapen."

In my view, the shakeout will continue for a few more years with automation, milling, and monolithic materials leading the way. Labs owners who work 16 hour days for $40,000 year making base-metal pfms for local dentists will continue to disappear. Its time for US labs to step up, take control, and shed the defeatist mentality. The future is bright for those who embrace change and seize new opportunities.— tagged Outsourcing