CAD/CAM: To buy or not to buy?

CAD/CAM has been a topic of discussion in the dental lab business for a number of years now, and there are numerous opinions about it-examples of many appear in this issue of DLP. Now that we have you thinking about CAD/CAM, I figure this is a good opportunity to get my 2 cents worth out there too.

I tend to look at things from the business perspective (that’s why the smart folks at DLP title my Competitive Edge column “Business Strategies”), and to me the question seems pretty simple. Does CAD/CAM make the product you produce in your lab faster, better or cheaper? If so, you really have no choice but to strongly consider it.

What complicates things is the fact that in the highly fragmented dental lab world, there are wide differences between labs in terms of the products they produce, the markets they serve and how they produce. The situation is further complicated by a diverse spectrum of dentist clients with a wide range of expectations. This means every lab has to consider their own unique position and determine which of the many system offerings might be a good fit for them. The decision to acquire CAD/CAM technology becomes an individual decision for each lab.

The three benefits

Let’s talk about the three potential benefits I mentioned earlier:

1. Faster. Making product faster generally lowers your production costs because you can produce more crowns, bridges or dentures in a 40-hour work week with the resources you have. More product to sell should mean more revenues or perhaps require fewer staff to produce what you do sell, thus lowering costs and increasing your profit. That’s called increased productivity, folks, and that’s always good. Faster production may allow you to require less turnaround time for each case, which could be appealing to your dentist clients and may earn you more of their business.

2. Better. Making a better product enhances your lab’s reputation, attracts new clients and helps retain existing customers. It also could allow you to charge more for your work, and that certainly helps the bottom line.

3. Cheaper. Making a cheaper product allows you to be more competitive with your prices or more profitable with your current prices. Cheaper and better need to balance with each other. Making a cheaper product with a corresponding drop in quality or service may or may not be a winning strategy. The same or better level of quality made less expensively is a definite winner.

Know the business

Evaluating these three concepts requires you to have a good understanding of the current state of your dental lab business. Most lab owners and managers are well equipped to judge the quality aspects of the product they produce. They generally know how long production takes, but many struggle with knowing what their current costs are for a particular product or process. The cost piece of the equation is necessary when you are evaluating CAD/CAM systems. You must have that knowledge to determine how much a system will save you (or cost you).

Remember equipment when calculating costs

A key aspect of the evaluation process that needs to be considered is the capital cost of the purchased or leased system. Material costs for things like blocks to be milled are pretty straightforward but the system cost, which can run into the hundreds of thousands of dollars, needs to be figured into the cost of the products produced. Historically, capital costs for dental labs have been low, and therefore, many lab owners and managers do not have experience with this. An accountant or business advisor can really help out here.  

Making the right decision

Bottom line, CAD/CAM systems are not for everybody, but they can be good for many labs. Just be sure you evaluate it carefully, and don’t get caught up in emotional buying. Just because the guy across town bought a system, that does not mean it’s right for you!