The ability to deliver value through efficiency is a primary reason businesses employ outsourcing strategies. Developing a multi-sourcing strategy or a domestic outsourcing model balances value and risk and is an approach to reaching optimal efficiency. Smaller businesses can reduce and manage costs, while still concentrating on the core business, and leverage the demand for a niche competition in the marketplace. And today, the increased number of larger laboratories offering outsource services is helping to drive down prices for some products and is forcing outsource centers to offer value-added incentives to capture marketshare.

“Outsourcing continues to be a popular option for smaller to medium-sized laboratories,” said Chuck Yenkner, President of Business Development Associates, a laboratory business consulting firm. “A small laboratory can get access to a wide range of technology without the capital investment. That is a key advantage and is the driving force behind the outsourcing model.”

A recently released study from Millennium Research Group’s (www.mrg.net) Crown and Bridge Marketrack project reports that 37% of the CAD/CAM produced crowns and bridges in the United States were outsourced in Q2 of 2008 to meet the demand from dentist clients, which represents a 15% increase over 2007.

The same study reports that the U.S. dental scanner market for in-house scan and design of CAD/CAM produced frameworks is expected to grow nearly 20% over the next five years. All of this is driven by the increased demand from practitioners for zirconia-based restorative services.

DLP’s own exclusive research into CAD/CAM technology in May 2008 indicates that 62% of laboratories have experienced an increase in requests from their dental clients for zirconia products.

For many of the larger outsource centers, the race is on to be an all-in-one supplier, adding new technologies to expand their menu of services. None offer all that is available on the marketplace, though some come close.

With all the choices that are available, laboratories must examine what services they could outsource that would bring value to their business and which domestic outsource center can provide the quality product they need with the turn-around time and consistency required to meet client demand.

Most outsource centers require the laboratory only send in the model for scan, design, and mill or print, although each type of outsourced product may have its nuances in terms of prep design and other requirements. “It’s not quite plug-and-play yet,” Yenkner said. “But it’s certainly doable. And the flexibility of choices gives smaller laboratories a big edge.”

Outsourcing also offers laboratories the advantage of testing the quality differences of a variety of CAD/CAM systems and products before making a buying decision on scanning, milling, and/or printing technology.

Most business advisors would tell you the best way to take advantage of outsourcing opportunities is to begin by sending the center of choice a model for the scan, design, and mill process. Ideally, a scientific approach would be taken although in reality this is rarely done, Yenkner said. That approach would be to take a single case and send it to three outsource centers of choice. A comparative analysis could then be made as to customer service, turnaround, product quality, and price. Some outsource centers may offer a free trial coping, which would mitigate part of the cost of the test. The same should be done with any product type being outsourced, Yenkner said.

The primary disadvantage of this business model is there is less control over restorative design. However, the biggest advantage is it provides the flexibility to offer any CAD/CAM-produced product on the market without any capital investment or overhead costs. In addition, it provides the ability to create demand among existing clients and to market these services to potential new clients, thus opening a new market for your business and a new revenue stream.


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