"You can't survive by doing the same thing you did five years ago. In this industry, we're in a time of change. Things are moving extremely quickly and a lot of factors are hitting us at the same time. There are challenges, but also opportunities," said Tais Clausen, 3Shape's CTO and Co-Founder, during his presentation, Vision of the U.S. Laboratory Market, at the NADL's Vision 21 meeting last month in Las Vegas.
What are the challenges in today's market? You know them all too well: a depressed economy, keeping pace with new technology, dentist-clients who are business driven rather than loyal to their lab-partners, increased competition from a global market and changing business models.
Despite these factors, there are also a number of positive market trends including a growing and aging population, increasing demand for esthetic-only products and customization, new product offerings, and more treatment awareness and interest from patients. "People want to know what's going on with their bodies," said Clausen. "If a patient comes in with knowledge, there's more of an opportunity to up-sell to a better quality product, like from a denture to an implant."
Here, the industry leader offers four strategies for maximizing your competitive edge:
Get a scanner. "There's no way around it: CAD/CAM is here to stay and all labs need at least a scanner and software to get a feel for digital technology," advised Clausen. "Today the decision isn't should I get involved with CAD/CAM, it's which CAD/CAM should I get involved with?"
Given the wealth of available outsourcing partners, Clausen believes it's OK to postpone the decision about investing in milling or printing equipment. "Try outsourcing. If you don't like the quality, try another one. At first only a few outsourcers could deliver the required quality and service, but that's no longer true. Suppliers can do more and more sophisticated restorations like implant abutments."
He also advised attendees to be patient with the technology. "Think of how long it took for you to learn to wax up a crown. You need to be patient with these systems; play with them."
Offer a range of services. "We believe labs with supplementary services will do better than production-only labs," said Clausen. "Identify areas of value for clients--services that can't come from Asia, like consulting, faster turnaround times, faster delivery and personal contact."
Differentiate yourself. While offering a range of services is important, it's not enough. "You can optimize by offering better service but everyone is doing that; you need to do those things just to stay in the game. If you really want to thrive, you need to provide something new and innovative. The labs that innovate and provide new, attractive offerings to their dentist-clients are the labs that are going to prosper."
One area to explore is laboratory-fabricated temps. "In Europe, temps are made by the doctor--especially single units--and some of them are terrible. Here in the U.S., what percentage of temps are done by dentists--90%? If so, there may be a good opportunity here. Doctors don't necessarily like doing temps and they may be willing to pay for nice ones." In Clausen's scenario, the doctor uses a digital impression system to scan the tooth before prepping, sends it to the lab to make the temp and then has the patient come in for the prep appointment.
Another area Clausen sees poised for growth is digital smile simulations, a feature offered by 3Shape's upcoming Dental System 2013 software. "If the doctor is selling an esthetic case, he may request a waxup but there are high costs involved and the lab doesn't make a lot of money on them.
And no matter how nice the waxup looks, it's difficult for the patient to relate to it. A digital smile simulation takes a scan of the patient's existing dentition and virtually builds the smile; it's a great selling tool."
Create a competitive product portfolio. In this market, specializing in one area--like high esthetics--won't necessarily save you, warned Clausen. "Very few labs can survive with this strategy. Your clients will find another lab to do the cheaper work as well as the high-end tasks and then where does that leave you? Overly specializing and a narrow portfolio can be dangerous; we think you need to leverage different levels of service by offering a low-cost, mid-range and high-end crown."
The Road Ahead
When it comes to which size lab might have the toughest road ahead, Clausen's prediction might surprise you. "If you asked me five years ago, I would have said small, single-person labs would struggle the most because they can't keep pace, but in Europe it seems that midsize labs--those with three to 20 employees--are struggling the most due to the pressure of incorporating new technology.
Single-person labs can get on the doctor's payroll by becoming an in-office lab and large labs can afford to invest in technology and new quality systems--plus, they can afford to make mistakes in relation to a wrong investment. Midsized labs have a huge challenge ahead of them; they're in the dilemma zone."
Clausen also forecasts that the perceived threat of chairside milling won't come to fruition. "We believe scanning will be done chairside, but restorative work will remain in the laboratory. When it comes to chairside milling machines, there's a lot of fear that dentists will basically do restorations themselves but these fears may be exaggerated," he said.
"As much as I think there's a market for chairside systems, I don't believe it's going to put the lab out of business; I think this phenomenon is going to level off at 10-20% of dentists. The majority of doctors don't want to deal with restorations themselves--they want collaboration with the technician. The doctor's job is to take care of the patient, not mess around with milling machines in the office."
Clausen also offered a live demonstration of TRIOS, 3Shape's new digital impression scanner. "We believe digital impressions will help enhance lab-dentist collaboration and, in the end, bring more restoration work to the lab," explains Clausen. "Digital impression-taking opens up a wide range of new lab service options, like digitally designed models and faster service."