New Realities
Inside Dental Technology delivers updates on digital workflows, materials, lab techniques, and innovation in dental technology through expert articles and videos.
January 1, 2016
Volume 7, Issue 1, January 2016
Page(s): p. 4
The year 2016 promises to be another interesting period of change for the dental laboratory industry. Consolidation of a still fragmented industry will continue at a healthy pace with competition heating up among large capital investment groups to grab market share by buying the larger, more profitable laboratories remaining in the market, and it will find new energy in the formation of smaller, less capitalized buying groups targeting successful long-standing mid-sized and mom-and-pop operations.
A constricting qualified workforce will heat up competition among industry players to find and retain skilled and knowledgeable technicians in all aspects of production but particularly in specialty fields such as removable prosthetics, implant dentistry, and CAD/CAM operation and management. The law of diminishing supply and increased demand will continue to drive up rising hourly wages and yearly salaries for qualified personnel.
Increased proliferation of automated production capabilities and economic pressures will further erode pricing structures for less complex restorative products. Those businesses that can hone manufacturing efficiencies and reduce waste will boost profit margins; those that can’t will need to create a value proposition for their pricing structure.
The Internet will give birth to new e-commerce business models for ordering and delivering restorative products. Just as online shopping has disrupted the retail market over the past decades, online service bureaus for ordering crowns, bridges, and other restorative products will emerge on the horizon and be poised to stratify how dentists interact with and buy from dental laboratories. These new types of business models may be encouraged by an increase in the adoption rate of digital impression technologies and the ability to transmit digital data over the Internet to a production facility of lowest price bid or to a laboratory with a particular specialty service.
State and federal regulation of the dental laboratory industry will continue to increase and tighten. Compliance-based issues and regulatory costs will eat into already thin profit margins and potentially lead to further attrition of smaller businesses in the industry.
New technologies and material innovations will emerge and emerge quickly. They will be diverse and costly but a necessity for businesses wanting to remain competitive. It will be imperative for businesses to stay informed on new equipment and material introductions and remain flexible enough to incorporate them into the existing workflow without significant disruption.
There is no doubt that 2016 and the years to follow will be challenging for an industry that is still maturing into its digital adulthood. For those businesses with strong financial resources, the leadership and foresight to take the business to the next level, and with a strong and technically astute team that can accept and embrace change, the future challenges that lay ahead will be overcome and new opportunities explored and exploited. Tomorrow could bring the "best of times" or the "worst of times." The thin line between success and failure will hinge on which of those perceptions you adopt and how you react to that perception.
Pam Johnson
Editor-in-Chief
pjohnson@aegiscomm.com
