Knight: Doing It Right
Posted Mar 12, 2012 in Management
If there ever was a case study in the art of change, Knight Dental Group is it. Over the past few years, the Oldsmar, FL-based laboratory has made a number of strategic decisions that have left it more competitive, more efficient and better equipped to deal with a changing market.
In 2005, Knight Dental Group invested in a complete milling system and, last year, purchased two more. Today, the lab fabricates about half of its caseload using digital technology--including almost 100% of its PFM restorations--and produces about 35% more units than it did using traditional techniques.
Although incorporating CAD/CAM technology meant a substantial financial investment along with the related technical learning curve and subsequent changes in an already successful production process, Knight was convinced it was important to commit and adapt to digital technology early on. "We knew our industry was evolving and trending toward digital applications," says Barbara Warner Wojdan, CDT, AAACD, President. "We wanted to be on the curve of technological innovation, so we did our homework and moved forward--even though we knew it was going to shift the dynamics of virtually everything we did."
Thanks to that decision--as well as others like streamlining internal operations and increasing staff training--the lab's annual output per technician has nearly doubled: seven years ago, the output per technician was $84,000; today it's $161,000 and the lab has fewer employees.
Here are three other key business decisions Knight Dental Group made:
Offer an economy brand. Four years ago, when the lab was feeling the pinch of eroding prices in the marketplace, it knew it had to take action: start offering an economy brand or lose some clients altogether. "We knew some of our dentists would look for cheaper restorations no matter what. They could either find them from us or from another lab," says Wojdan.
Economy branding was new territory for a lab well known for its high quality and consistency, and the most ideal choice for Knight was to outsource the economy restorations offshore rather than fabricating them in-house. In 2008, it began offering its Vantage economy line that includes mostly PFM restorations, and some all-ceramic and removable work. Compared to the lab's mid-range products, Vantage offers lower-grade esthetics, model work and packaging; a longer 10-day turnaround; and is priced 40% lower.
Today, Vantage comprises 10% of the lab's business. "Our economy brand has helped us retain a lot of the clients we would have otherwise lost," says Wojdan.
Increase the focus on advanced esthetic cases. While conventional wisdom says most dental patients opt to "fill and drill" during an economic downturn, the lab took a gamble by upping its game in the high-level esthetics arena. "Even with the weak, sluggish ecomomy, many consumers save money for things they really want to improve about their appearance. In today's society, people want a healthy, youthful appearance and cosmetic dentistry is no exception," says Wojdan.
Since the laboratory already had a high-end restorative department--CAC or Comprehensive Aesthetics Center--and knew there clients were very reluctant to offshore smile design, full mouth reconstruction and implant cases, it began focusing more detailed attention on and allocating additional financial resources in this area.
For instance, Wojdan was already in the process of becoming accredited in the American Academy of Cosmetic Dentistry (AACD) and the laboratory increased its visibility in the organization. It began participating in meetings and hosting the AACD mentor luncheons which helped it make valuable contacts and build relationships with cosmetic dentist members.
The lab also increased staff training and stepped up its promotional efforts, penetrating the cosmetic market with large, four-color ads that were strategically placed in popular dental journals, gained memberships in other cosmetic dentistry groups and direct marketing. Today, the lab's efforts have paid off: In the last three years, sales for the CAC line have increased 30% and the lab has grown its CAC department from seven technicians to 12.
Trim the fat. Although Knight had already incorporated lean practices and was DAMAS-certified in 2005, last year it decided to do a comprehensive re-evaluation of each of its SOPs to better determine what could be streamlined or improved for greater economies of scale and to even further eliminate waste.
Here's how it worked: once a week for six months, the staff members of each department met as a group with an appointed leader and scribe. They reviewed their procedures one by one and refined, deleted and/or added steps as necessary. "Most of the changes incorporated have been instrumental in saving us time and labor costs," says Wojdan. "The most significant result was that the new, improved SOPs have helped lower our remake factor by half a percent."
The exercise also resulted in material cost savings. For instance, in reviewing the type of aluminous oxide being used, a technician in the ceramic department found a similar product that could be purchased in greater bulk and achieve necessary results--a change that's saving the lab $5,000 a year.
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