5 times when does it make sense for a dental lab to outsource

In the United States alone, there are more than 6,500 dental labs. Some of those labs are one-man (or woman) operations that are run out of a basement or garage. Whether it is a sudden rush of business or the need to reign in expenses, there are times when it makes sense for one dental lab to outsource work to another dental lab.

Overflow: If a one or two-person dental lab gets busy, it is hard to find a lab technician to come in and work for a few weeks. Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees don't always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.

Turnaround Times: Let’s face it, in sole-proprietor dental lab, cases are worked on one at a time. If a customer needs something turned around right away, it might be faster to send the case to a larger dental lab with more hands. If the lab owner gets sick or goes on vacation, the outsourced lab can continue to work on cases.

Specialization: Many dental labs specialize in one area – say fixed or removable products. To provide full service to their dentists, a crown and bridge dental lab may need to send a partial denture case, for example, to another lab. The dentist doesn’t need to know it was sent out of house. And, it allows the dental lab to grow without adding staff.

Economies of Scale: Cost-cutting may not be the only reason to outsource, but it's certainly a major factor. Multi-national dental labs purchase large quantities of dental lab materials and equipment, so their expenses per product are low. That means they are able to offer lower prices on many of their products. Smaller labs should take advantage of these economies of scale and outsource cases it might be more expensive for them to keep in house. An outside provider's cost structure and economy of scale can give smaller dental labs an important competitive advantage.

Access To Quality Material: Speaking of economies of scale, more volume means lower prices on better-quality materials. Small dental labs may be able to increase the quality of the products they offer by working with a larger lab on specific cases.

Small labs are great at personalized service, on-time deliveries and quality workmanship. But, from time to time, they may want to use the services of another dental lab to keep the work flowing in and out – quickly, affordably and with the latest, quality dental materials.

When choosing to work with one dental lab, a relationship – or call it a partnership -- develops. As the business relationship grows, it is easier to communicate wants and needs because there is a history. Soon, the other lab feels like an extension of the business and confidence can lead to future growth for both companies.