I am back from a very busy week in Chicago, read article here. Amongst my many agenda items was to present my latest presentation titled: From Licking Brushes to Meaning Business to the CAL Lab group and Dental Lab Summit hosted by Bill Yancey and Gordon Christensen. The goal of the presentation was to provide information that would help dental labs navigate through the barrage of options and considerations when considering high technology CAD/CAM purchases for their lab.
I spoke on the second day, Friday morning and started the presentation saying something I have never said before. I told the group that for the first time in the eight years since I had kids, there was no place I’d rather be then right here at this dental meeting with them. The reason: because I have never felt there to be a more important time to gather information about the dental lab industry from which to build a vision of the future and find your place in it.
This was the basic premise for my presentation and, in my opinion, what’s at the root of making technology decisions. Knowing what to buy and having confidence in those decisions is a result of assessing the industry landscape and where you are, or want to be in it. So, I presented what I thought were the critical factors in understanding the industry, both as it is currently and where it is going.
I presented that there are two camps in the industry, both of which are going after the 8% of the dentists income statement that is spent annually on dental lab work. You have the conventional lab industry which was built on alloy, glass and talent and the corporate dental lab industry which is all about channel, cash and CAD.
From there, I showed the evolution of the relationship between these two camps and what possibilities and business models exist for their future together. I think this part was very well received and I have received many compliments at and since the presentation regarding it.
Next we discussed understanding the concept of lifecycle. Basically that lifecycle in dental lab technology can apply to a material, technology or entire business process. As an example, PFM and Captek have had a very long lifecycles, while other products or technologies have had less so, such as perhaps WolCeram, previous versions of Empress and others. Look at some of the high tech products you did frequently in your lab years ago that were very popular and have since faded. What caused them to fade? Understanding this and gauging the lifecycle of a product or technology is critical since you want to get your payback before the lifecycle ends.
We also discussed ways to use dental outsourcing companies like the one I started, Dale Dental, as a center-of-excellence to access all of the products your lab may need rather than take expensive risks investing in new equipment. Through Dale Dental , a lab of any size can provide their doctors with any restoration that Glidewell, National Dentex, DSG or any other dental lab can. Through Dale Dental, labs were able to offer Lava the day it came out back in July 2003. Same for Cercon, eMax CAD and Press, CAD/CAM implant bars, Etkon, Captek and much more. That’s exciting and it’s something that has helped labs of all sized try new technologies before they buy them, or helped them not to buy them at all and avoid the risk altogether. Doctors and labs have thanked me for enabling them to maintain their valued relationship with eachother as a result our business model.
The last part of the presentation was about the economics of high technology being vastly dissimilar, in fact totally opposite, of conventional alloy, glass and talent restoration manufacture. Whereas through conventional manufacture, only labor might be higher and uncontrollable, through digital manufacture, labor becomes the only lower and more controllable line item you have, specifically in Cost of Goods Sold.
I then demonstrated how the increase in COGs is the opposite when comparing the impact of high tech to conventional manufacture for fixed costs. Basically, that technology helps you get more out of the infrastructure you have and brands being markted by manufacturers alone can drive business to your door with little effort necessary on your part.
I left the group with some fun examples of how other industries find ways to lower their COGs or fixed costs while couching the initiatives in more mainstream ways. For example the towel and linen reuse program at so many hotels today as part of their green initiative. I think that in secrete when hotels talk about “going green” they’re talking about profitability, not the environment. I mean, we love doing our part to save the earth, so much so that we let the hotels save millions of dollars per year while we walk around cold and wet trying to get dressed. There are probably a lot of ways you and your customers can feel good about cutting down on unnecessary driver runs and inefficient shipments both of which reduce cost and wasted time and even reduce your carbon footprint.
I also spoke about labs having a strategy room, preferably not on the lab premises. If it is on the premises, the phone ringer should be off and “do not disturb” on the door. This is a room where lab owners and managers can read industry magazines, cut things out, post them to the walls, sketch and tack ideas on the wall, etc. Oh yeah, and write on the whiteboard. Every strategy room must have a white board and various color markers.
Lastly I suggested that if people were not already subscribing to the Wall Street Journal, Business Week or Fast Company, now’s a good time to start. The Dental industry is years behind many other industries, so reading these magazines can help in trying to understand trends and what direction things are going.
This was my fourth time presenting to the CAL Lab group, which I believe, once again, represented the most distinguished group of lab owners in one place that I have ever seen. A few hundred were in attendance this year and CAL has again put itself on the top of the heap when it comes to quality of information and presentations at a dental lab meeting.
Best,
Dave
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Agree with your recommendation. I love the WSJ and the information it provides.