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>In this economy, working faster, smarter, better is the key to riding out the storm. Here are 6 easy-to-implement...See more tips that can lead to a leaner, meaner, more efficient laboratory operation. ###Problem: I feel like my staff is very fragmented, especially between departments. I need some strategies to inspire my technicians to act as a team. Strategy: Have some fun. Encouraging your employees to have fun together and to develop relationships is an excellent way to foster mutual respect and teamwork. People who enjoy one another usually have a greater loyalty to each other and to the laboratory. "The power of having fun at work should never be underestimated. People simply are more productive and motivated if they are having fun...it's just the way we are wired," says Derik Mocke of the Sustainable Employee Motivation website. While some laboratory owners have gone all out--treating employees to wine tastings, boat trips, ballpark outings and golf tournaments--you can achieve the same team-building results with low-cost activities, too. Think chili cookoffs' potluck lunches, barbecues, movie nights at the lab, or even "make-your-own sundae" days. ###Problem: I have several technicians who have really gone above-and-beyond during the last couple of months. While I can't give significant raises or bonuses in this economy, I want to recognize their accomplishments. Strategy: It doesn't always need to be an elaborate reward to recognize employees' achievements and show pride in your staff. Many times, it's the recognition itself that will motivate people to keep up the good work and let them know you value their contributions. When employees go the extra mile in their daily routine, consider awarding movie passes or other gift certificates immediately. Or, you can give raffle tickets as a reward and hold a monthly or quarterly drawing for prizes or gift certificates. If your laboratory is large enough to have department managers, it's important to get them in the habit of demonstrating their appreciation, too. Encourage them to report back to you with employee recognitions each week, and empower them to give out gift certificates on the spot. ###Problem: To get our new technicians up to speed, I rely heavily on over-the-shoulder training, but it takes a lot of my time. I need more resources to support their education. Strategy: Have new employees work with experienced staff members who act as mentors. Not only does this distribute the training effort and take the entire responsibility off you, but it's also good for the technicians who are doing the training. "It shows we value their skills and we have the confidence they can train someone else," says Greg Thayer, Owner of Thayer Dental Laboratory, Mechanicsburg, PA, who has been using the mentor approach for over 20 years. "It also helps current employees accept a new technician more quickly because they're getting a chance to show him the way things are supposed to be done." Thayer also relies on DVDs from PTC: Simplified Posterior Anatomy and Simplified Anterior Anatomy. "These are especially good for inexperienced trainees to familiarize them with the language used in a dental laboratory and the different anatomical parts of each tooth," says Thayer. "Every one of our technicians, sales people and administrative people--no matter their experience level--complete these two modules when they join the lab." Other resources: build a library of books and DVDs that you can loan out to trainees, and look into the growing online education opportunities and other courses offered by manufacturers and suppliers. ###Problem: I want to promote one of my denture technicians to lead the removable department but I'm not sure who will be most effective in a management role. Strategy: As most laboratory owners will tell you, managerial skills don't always go hand-in-hand with technical skills so promoting the best technician is not always the answer. Start by defining the leadership skills the manager needs and use them to evaluate each candidate. For example: • Attitude. You can't train someone to have a better attitude. Consider his work ethic; does he have an innate desire to do his best? • People/communication skills. Look for the technician who wants to share his knowledge with others--not the one who wants to be the best at the expense of others in the department. Also, can he effectively communicate techniques and ideas? Is he a good listener? • Stress management skills. Is the technician capable of handling stress or disharmony? You need managers who can stay calm, focused and positive under pressure. Feeling stressed is understandable; it's how he handles the pressure that you need to evaluate. • Organizational skills. Look for technicians who know how to plan their day's workload, set deadlines for themselves, and seek out ways to increase efficiency. These skills will make it easier for them to juggle the varied responsibilities that come with a management role. • Ability to prioritize and use good judgment. A manager needs to be able to assess what comes first and what can afford to be put on the back burner without jeopardizing the work--or cash--flow of the lab. ###Problem: My laboratory has grown over the last several years and we're at a point where we need to put some defined policies in place. But developing an employee manual sounds overwhelming. Strategy: Just over half of all dental laboratories have a written manual; it doesn't need to be long, but it can help eliminate the inconsistencies and misunderstandings that result from verbal communication. "A handbook that is read and signed is the best tool for keeping good employees--it holds everyone accountable, employee and employer," says William Grill, Owner, Thompson Suburban Dental Lab in Timonium, MD. To get started, look at some sample manuals online and consider getting input from managers and key technicians. Involving employees in the process shows them you're interested in developing policies that balance your interests with theirs and may alleviate anxiety about having "formal" policies in place. Policies you should detail in the manual include time off, such as sick time, holidays and vacation; probation periods; overtime expectations; benefits and insurance; the performance review process; safety practices; and grounds for termination. Some laboratory owners have also started incorporating guidelines regarding the use of the internet, cell phones and MP3 players, as well as food, drink and personal items at the bench. Be sure to also include these two items that human resource and legal experts say are a must: • A disclaimer stating the manual is not an employment contract and employment with the lab is "at will" and can be terminated at any time. • A comprehensive policy that prohibits sexual harassment and discrimination based on race, gender, age, physical ability and religion. Once you've drafted a manual, have an attorney review it for legal compliance. ###Problem: I know that cross-training technicians would afford more flexibility in my small laboratory, but it's hard to fit into the day when we're all focused on production. Strategy: Investing in cross-training not only gives you flexibility, it also fosters teamwork and helps employees see how their responsibilities interrelate. Consider having a brief meeting every morning to discuss the day's workload and if a technician doesn't have a full day, schedule him for training in another area. Or try arranging training based on typical workflow fluctuations. For instance, if your model and die technicians usually have less work on Tuesday and Wednesday, schedule training sessions on those days. If you can't consistently schedule time in advance, take advantage of training opportunities as they arise. For example, if you have a slow morning and have been wanting to train your model technician to build porcelain, consider helping him pour models so he is free during the afternoon to work with you at the porcelain bench. You can also give employees who are eager to advance their skills the option of working an extra hour or two to learn a new technique. In this case, determine in advance how the employee will be compensated. For instance, you might pay him for an extra hour during the training or promise a small increase once he's mastered the skill.
8 Faster, Smarter, Better Management Strategies to Boost Your Business: We Want to Hear Your Management Strategies
###Problem: I'd like to implement pre-scheduling to help make our workload more consistent; we're overwhelmed...See more one day and slow the next. Strategy: Pre-scheduling—where the laboratory, rather than the dentist, determines the turnaround time for each case—helps ensure an even workflow, which minimizes the pressure of deadlines and enables a technician to focus on his product quality. For example, some laboratories use a manual pre-scheduling system. Each technician has a designated block of time and pre-determined number of units he can handle per day. As cases come in, the office manager schedules them into an appointment book according to this set capacity and the laboratory's current workload. Once a technician's slot is full, no more cases are scheduled for him that day. The office manager then calls the dental office with the date on which the case will be delivered. There are also a variety of software packages on the market that can streamline the pre-scheduling process. Pre-scheduling doesn't eliminate inevitable problems such as cancellations, late cases or remakes that can wreak havoc with your production cycle. So you still may need to juggle your schedule or implement strategies to maintain flexibility. For instance, consider scheduling your days at a slightly lower capacity to accommodate emergencies, allow for breathing room and maintain the level of customer service you want to offer. ###Problem: I know documenting our fabrication procedures will help our work be more consistent and raise quality, but the whole process seems daunting. Strategy: While showing a technique takes less time, it doesn't give your employees a point of reference. Step-by-step procedure manuals are a valuable way of getting all of your technicians on the same page. "You have to have something written down so your technicians have something to fall back on," says Ryan Dutton, Co-Owner of Dutton Dental Concepts in Bolivar, OH. Each department in Dutton's lab has a fabrication manual that includes detailed instructions for every step of the fabrication process and even illustrations. To create his manuals, Dutton tapped into the people who were most familiar with the ins and outs of the daily production process: his technicians. He asked each department to review their fabrication procedures and develop written standards. The teams used manufacturers' product manuals to guide them and experimented when they disagreed on what should become the standard practice. For instance, the lab was using both pinned and pinless model systems so the staff members did a side-by-side comparison and determined that they preferred the results of the pinned system. While Dutton admits that writing the manuals was a time-consuming process—it took one year—he says they have eliminated a lot of mistakes and reduced the number of remakes by almost half. Another benefit: because he involved his employees in the process, he feels they have a greater stake in following the documented procedures. "Giving my technicians a voice in establishing our quality controls helped make them more vested in our quality control efforts and feel like valuable, empowered members of the team," he says. ###Problem: In this economy, I'm losing clients to price-cutting and offshore laboratories. Strategy: The bleaker the economic picture, the more people want to do business with companies they trust. But for those dentists who may be tempted by a price-cutting competitor, you need to remind them constantly about why their loyalty should be with you. "My specific strategy in this economy is to bend over backwards. I'm agreeing to short turnarounds, saying 'yes' to the emergency cases, and dropping everything for that last-minute pick-up or custom shade," says Beth Kotewa, Owner of River City Dental Studio, Essexville, MI. "Everything I do is to show the dental offices they can't get that service from offshore or out-of-town labs that may offer a $30 savings." Some labs are also instituting tiered pricing plans that allow you to retain business you might otherwise lose to a less expensive lab. For instance, rather than lowering prices on your premium restorations, offer them other options—like basic and mid-range restorations that require less labor and use a different quality of material. Another strategy is to market your specialized expertise that's not likely offered by a cheaper laboratory. For instance, in the implant specialty, complex restorations like overdenture bars have grown in popularity, creating a window of opportunity for some proactive laboratory owners. "We are a lab limited to implant dentistry and our fees reflect the extra labor and knowledge required to produce implant-supported restorations," says David S. Weber, CDT, Owner, Sun Dental Laboratory, Medford, OR. "Competing by offering a higher level of service, care, knowledge and craftsmanship, and charging the dentist for the value of that level, has been a winning strategy for us." ###Problem: My lab is bursting at the seams, but I can't afford a larger facility. Strategy: Get a roommate. A few years ago, Brad White, CDT, Owner of two-person Perdue Dental Laboratory, Sarasota, FL, moved into a new building owned by another lab to share space and common expenses. "I'm paying the same amount of rent as before, but we've gained about 40% in terms of common areas, like the kitchen, dining area and an extra bathroom," says White, who splits the utilities with the other owner, Larry Brown, CDT, Brown Dental Prosthetics. "We also save about 15% by buying office supplies together. For instance, instead of us buying just a few reams of paper, we'll buy a case to share." ###Problem: I'm getting ready to retire in a few years. As a solo operation, I feel like my only choice is to just sell off my equipment and shut the doors. Strategy: If you're willing to plan ahead, that may not be your only option. If there's no family member interested in buying your laboratory, a sound strategy is to merge with another lab that is interested in bringing you and your clients on board. In a case like this, the perceived value of your laboratory is directly proportionate to your willingness to stay to ensure a seamless transition. If you're not inclined to seek out a merger or work full-time during a transition, another possibility is to find a laboratory in the area that offers a similar quality product and shares your service ethic. Work out a deal in which you earn commission on those customers whose work you can transition to the new laboratory. Then, handle introductions, relay client preferences and help cultivate your clients' relationships with the new laboratory. It's not an extremely lucrative plan, but you can earn extra retirement income while taking care of your customers at the same time. ###Problem: I'm thinking of merging with another laboratory owner but worry we won't work well together and the business will suffer. Strategy: You're right to be cautious; a partnership isn't something you should enter into lightly. Consider these questions to be sure you're a good match: • Do you have the same goals? Be sure to discuss your priorities and your vision for the business. "The most important thing my partner and I determined was the type of laboratory we wanted to be. We had both owned our own small laboratories and essentially our name was on every product that went out the door," says Allen Weinbrecht, who is entering his 23rd year of partnership with Ken Bailey, a former competitor. The two merged their businesses in 1989 to create Den-Tech Dental Laboratory in Pasadena, CA. "We both wanted to grow, but we also agreed our priority was to be sure our joint venture would continue to produce the quality our clients had come to expect." • Do you complement each other? Ideally, the two of you will be able to play off each other's strengths and weaknesses; for example, maybe he's introverted and you're extroverted, or he'd like to focus on production while you handle the business end. Determining this requires you to step back and take an honest look at your strengths and weaknesses—as well as those of your potential partner—and think about who would be best suited to handle different parts of the business. • Are your personalities a match? It's not only the other person's professional qualities you should think about. Consider whether or not your personalities "click" and whether you have similar values and personal priorities. • Do you have a similar work ethic? If not, this is a common reason partnerships fail: one partner isn't contributing the energy and hours the other person is investing. Resentment is bound to grow if you're at the bench cranking out all of the work while your partner is spending the morning reading the newspaper. • Are your financial philosophies in sync? Like a marriage, money-related disputes can be a source of tension between business partners. Sharing similar attitudes about finances—such as how you spend money, handle debt or stick to a budget—goes a long way toward minimizing that stress. ###Problem: I've been hearing about laboratories implementing Lean Manufacturing; how can it help my lab? Strategy: After implementing Lean Manufacturing in his lab, Creative Expressions in Winterville, NC, Tim Tyndall, CDT, reduced his turnaround time from approximately 12 days to five or six. "By switching to small batches, organizing the laboratory and getting rid of excess equipment and products, Lean has transformed our lives. It's made us super efficient and improved our quality and bottom line. It's a great stress reducer and great competitive edge, especially against offshore laboratories that can't compete with the shorter turnaround," says Tyndall. Although Lean Manufacturing is a wide-ranging management philosophy built around five interrelated principles, what it boils down to is taking a comprehensive look at your processes with an eye toward eliminating waste and maximizing value. Processes include everything that is done to a case from pick up to delivery; waste is anything that doesn't add value to the final product and could include wasted time, materials, labor, space, etc. As with any major management shift, the first step to implementing Lean principles is to get everyone on board; it can't just be a top-down management strategy. One way of involving staff members is to have them participate in flow charting, which entails defining all the steps in each process of the laboratory so you can begin defining and eliminating waste and extraneous work. Flow charting also helps distinguish value-added from non-value added activities, which are defined as waste in the Lean philosophy. Two other key aspects of Lean: establishing good work flow to create an efficient progression of the cases through departments; and organizing your laboratory so that everything has a designated place and anything out of order is immediately visible. ###Problem: I've been saying for a few years now that I was going to spend less time at the bench and more time managing the business but it just hasn't happened. Where do I start? Strategy: The first step is to delegate just one task and build on it. Carefully look at how you spend your time and, while itemizing your various responsibilities, ask yourself, 'what job could I have someone else do for me that would make my life easier?' In an ideal world, you already have a technician whom you trust to take on some of those duties. If you need to hire someone, think about exactly what you need. Maybe it's a high-end ceramist who can take on some of the more challenging cases or perhaps the only way to relieve the pressure would be with an experienced, all-around technician. Delegating is not something that comes easily to most business owners. But the only way to successfully get off the bench is to stop wearing every hat—that of head technician, quality control manager, salesperson, marketer, CFO—and entrust some of those responsibilities to others.
Faster, Smarter, Better: 6 Financial Strategies to Boost Your Business. Share Your Money Saving Tips Here!
###Problem: My lab is tight on cash and I'm looking to better control my inventory costs. Strategy: Keeping...See more a tight reign on your inventory and not stocking a lot of extra materials can be a great idea—especially when it comes to high-priced metals and implant components. On the other hand, you can also save money by buying in bulk—especially for frequently used items like acrylic or ones that have a long shelf life, like teeth. Other strategies to save on inventory costs include combining multiple orders into one to lower shipping costs, taking the time to shop around for the best prices and requesting bids from various manufacturers/suppliers before placing orders. Another way to save money on products and materials is to maximize your buying power by co-oping with local labs to purchase products in bulk. Perdue Dental Laboratory, Sarasota, FL, often partners with the C&B lab with whom it works on combination cases, and the labs save between 5% and 10% on orders of common consumables like plaster, stone and teeth. ###Problem: How can I ensure I'm getting the best deal from my service providers? Strategy: Renegotiate. From shipping costs to service contracts, ask your providers if you're getting the best rate possible. "In these times, they all want to keep the business they have and you might be surprised at what they'll do," says Doug Baker, Director of Professional and Industry Relations for National Dentex Corp. For instance, when Baker compared the cost of a local pick up and delivery service to hiring a driver and buying a car, he found he could spend less money each year than what the lab was currently paying using the delivery service. "I called the owner of the delivery service, he dropped his prices $1 on every package touched and we saved over $5,000 a year with that one phone call," says Baker. Similarly, over the last three years, Leon Hermanides, CDT, President of Protea Dental Studio, Inc. in Redmond, WA, has twice renegotiated his rent with his landlord by offering to extend the number of years on his lease. The result? He's saving $1,200 a month! ###Problem: I'm getting ready to sell my laboratory and need to ensure that all of my financial records are in order for potential buyers. Strategy: Work with your CPA to "recast" your financial statements so that a buyer gets the most realistic view of your laboratory's profitability. If you're like most closely held private companies, you do all you can to limit taxes by reducing profits; however, when preparing for a sale you need to recast the profits and remove the perks you take from the business. For example, if your salary is inflated, it should be substituted with an amount that's more realistic if you were to hire a replacement. Also look on your P&L statements for one-time costs such as legal settlements, fines or severance payments that can detract from your profitability and identify them as such. During the due diligence phase, buyers will want to examine income statements, balance sheets, income tax returns and aging reports, as well as your sales history for at least the past three years. ###Problem: How do I use my income statement to get a better handle on costs? Strategy: When analyzing your income statement, it's important to look at the percentages rather than the dollar figures. Dollars will change from period to period but the goal is to achieve or maintain consistent percentages. By comparing current and past percentages, you can determine where costs are increasing or decreasing in relation to all expenses. There are some industry standard percentages that laboratory owners strive for: • Direct labor and benefits should be between 30 and 35% of sales; if you combine all labor and benefits, this percentage might go as high as 50%. The extensiveness of your benefits package will affect your labor percentage. • Material percentages are usually between 8 and 15% of sales; this may vary depending on the size of your laboratory. For instance, a larger lab might have a lower material percentage because it has more buying power than a smaller lab. Keep in mind that these percentages can vary depending on how you keep your books and allocate expenses. For example, if you work at the bench, the time you spend fabricating restorations should be a direct labor cost whereas your "non-producing time" should be a general and administrative expense. ###Problem: I have a good client who has recently run up a large balance. I know I have to address it, but I'm not sure how to approach him. Strategy: Start with an honest conversation. If the client truly wants to pay off his debt but is having financial difficulty, you may be able to establish a payment plan or come up with another option. For example, Marc Daichman, Owner, Asteto-Dent Labs, Maplewood, NJ, once had a long-time customer who was having financial issues and ran up a large balance for the first time. "We let it go for 90 days. When we still didn't receive payment, we told him in a very upfront, polite way that he needed to decide whether or not he wanted to maintain his relationship with our laboratory," says Daichman. "As a result, he took a loan from his pension in order to pay off his balance." If the client is unresponsive or becomes belligerent, Daichman takes him to small claims court as long as the amount owed is under $2,000 (the small claims limit in his state). It costs about $20 to file a suit and, he's found that many times, a doctor will choose to pay once he receives the summons rather than spend a day in court. ###Problem: Given the current economic situation, I'm uneasy letting new clients who have no history with our laboratory run a balance. Strategy: Cut potential losses; set a credit limit for new customers until you're comfortable with their payment habits. "We simply let the client know that, until we've established a history, we have a credit limit of $2,000; once he hits it, he needs to send a payment or we will only deliver new cases by COD," says Dale Chandler, CFO, Maverick Dental Laboratories, Export, PA. "It can get awkward, but we have to ask ourselves, 'how much is too much to lose?'" Usually, if a practice demonstrates over a three-month period that it has control of its finances and pays on time, the lab incrementally increases the credit limit.
The dental laboratory market will continue to shrink. More than half of all laboratory owners are over 55 and 40% plan to retire in the next decade.
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