Is Your Laboratory Leaking Money?

This is what I call the Additive Theory of Expense. Every day, we squander minutes of working time or a few ounces of materials, or remake a crown because we misread a prescription. As individual occurrences, these are no big deal. But it is the number of events that quickly add up. All sorts of similar situations are within the laboratory, with employee overtime as a prime example. Studies show that the typical technician performs value-added work only about 55% of the time on the job. That’s because that typical technician spends valuable production time performing non-value-added tasks such as looking for cases, shepherding cases in the laboratory, doing remakes, waiting for QC, looking for missing information on laboratory slips, and fussing with bad impressions. Another example is the zirconium pucks used in the milling machines, where the yield is multiple units per puck. If remilling is common in a laboratory, the material waste associated with "one or two crowns" may well add up to the laboratory using an extra puck or two per week. How about that drawer under the technician’s bench with enough cutting burrs to supply the laboratory for a month? What do we do about the loss of productivity associated with poor (or nonexistent) training programs? Not all technicians work at the same pace or quality level, yet we tend to avoid the challenges of ensuring our workforce is equally (or closely) skilled so as to maximize the process capability. The precious minutes lost on our expensive digital equipment will quickly add up to dollars in terms of a lower return-on-investment, as the machines will be producing at less-than-designed capacities. Poor material-control practices result in over-ordering, paying too much for materials, and getting materials that are just not needed. These are but a few examples, but I’m sure you can see them in your laboratory if you look with a critical eye.

The Lean toolbox can help laboratories minimize the loss of time and materials. Root-cause analysis, value-stream mapping, poka-yoke, 6S, and Kaizen are just few of the easy-to-apply tools. Laboratories that have learned and applied these simple tools have increased technician productivity, reduced remake rates by 50%, saved thousands in labor costs, and dramatically cut materials costs, all of which means bigger margins for the laboratory.

The Additive Theory of Expense can profoundly and stealthily affect the business profitability. According to the National Association of Dental Laboratories, the typical laboratory has a 5% to10% profit margin. How much could that increase if the trickle of expenses were to be identified and eliminated (or at least reduced)? The key here is to acknowledge a problem, look for root-cause solutions, set a budget, and control the "dripping faucet."

Bob Yenkner is the owner of Practical Process Improvements (PPI) in Higganum, Connecticut.