You get more and more customers and cannot manage to operate in-house, the operating costs start dramatically increasing, the hiring skilled technicians seem to be stuck. You think about a dental outsourcing lab start searching for information but usually receive negative communication about the quality, time commitment, reliability of outsourcing companies, and miscommunication. Then you quit and continue facing your problems Every success has a price. And the price here is you need to analyze the great benefits that you will gain with the risks and ways to overcome, get out of your comfort zone to succeed. In this article, we will have a closer look at this controversial topic.
I. What is outsourcing?
1. The concept
Outsource is a business activity in which businesses hire an outside company to perform services, manufacturing that was originally performed by the company’s employees. Outsource is an activity often chosen by companies as a cost-cutting measure, improving the quality of work.
2. Reason to choose Dental outsourcing lab
Local labs consider outsourcing when there is a shortage of human resources in their enterprise in a short time or to save costs when the number of orders exceeds the ability to meet production from inside. Outsourcing is used by dental labs when comparing the marginal costs of hiring more employees to get the job done or choosing to outsource. This is gradually becoming a popular trend among businesses when dealing with financial problems or wants to increase more profits In addition to the financial benefits, dental outsourcing lab also helps local labs increase the ability to specialize:
- Cooperate with other dental outsourcing labs that specialize in the dental field
- Improve specialization skills from internal resources.
- Minimize and share risks for large orders.
- Speed up the completion of work.
3. Necessary factors for successful outsourcing
Local labs can focus human resources on activities that bring competitive value compared to competitors such as customer service, marketing, etc. However, local labs should note when using outsource: • The purpose of outsourcing is to make the business more specialized and outstanding. • Manage and monitor external resources by agreements and contracts between related parties. • Expand relationships, get support from experienced Outsource managers. • Balance investment capital and corporate financing
II. Vietnam- a new paradise for outsourcing
1. Vietnam has stability, a foundation for the development
Vietnam has no political instability. It has had a stable political environment over the past 30 years with the same ruling party. It has also had a steadily growing economy. Vietnam’s GDP growth rate was about 7.02 % in 2019, which was quite high compared to other countries in the same region. In 2020, although the impact of the Covid 19 epidemic on the global economy, the economy still maintains growth with the GDP’s growth increase by 2,91%. About 90% of the population is Vietnamese, do not follow any religion. It means that there is little reason for any ethnic or religious conflict
2. Wages in Vietnam are lower than the others
Wage is one of the main factors that impact the manufacturing cost. According to the chart, in 2020, manufacturing labor costs in China were about 6.5 USD per hour, compared to an estimated 4.82 USD per hour in Mexico and 2.99 USD per hour in Vietnam. Thus, the cost of production will be cut down more in Vietnam.
3. Overcoming the language barrier
English is considered a popular language in Vietnam recently, according to Professor Chung Hoang Chuong, who has juggled teaching at the University of California and doing research in Vietnam: ”English usage in Vietnam is already happening, we can easily find English everywhere on café menus, advertising banners, building names and there are even many young Vietnamese groups sitting in the café table shooting English at each other”. This advantage forces Vietnam to invest in the outsourcing fields, including dental lab outsourcing
III. The benefits of outsourcing
1. Highly specialized
In a competitive environment, specialization is a factor that local labs always take advantage of to optimize their position. Using dental outsourcing lab helps managers to focus on giving strategies to help develop their strengths.
2. Cost labor-saving, high labor efficiency, and save the working area
Minimizing costs is one of the top factors when investing, using dental lab outsourcing helps businesses not only benefit from paying less for third parties but can also cut down on labor costs such as health insurance, social insurance, personal income tax for full-time employees. For dental outsourcing labs, their organization and arrangement of human resources are well-trained and professional. So, with a large volume of orders, they can still complete according to the original contract and commitment. Since then, the performance of local labs using outsourcing has also been pushed higher. In big cities, space and working environment also costs a lot. When outsourcing, this problem will be solved. Not only the working area for employees but also stationery and equipment for work are also saved a lot.
3. Dental outsourcing lab helps to save time while ensuring quality
Improved labor efficiency helps to shorten the time to complete the work schedule. For dental outsourcing labs, they have strengths in their field that make orders will be completed faster but still ensures quality. Many local labs still hesitate on the quality, but remember, when outsourcing, you always have the right to send back unsatisfactory crowns and take money back on these cases. But at your lab, it means you lost material costs. There are always have risks, but the important that which ones are more beneficial to your lab?
4. Benefit from modern technology without investment
The technology is always updated every day, investing in modern production lines is very expensive, not to mention the factor of transportation time…Outsourcing is a convenient and useful solution. Local labs also have easy access to modern technology provided by the desired goals at a low cost. Local labs design quality teeth send the design to dental outsourcing labs and then depending on the requirements to complete a dental product and send it back to the dentist. This helps local lab gets the most advanced dental prosthetic products without spending too much on investment.
5. Ensure efficient operation
For orders that require continuity and take place over a long time, if local labs use official employees, they will have to face errors: vacations, sick leave, maternity leave that make work is difficult to run smoothly, ensuring the scheduled time. Outsourcing provides stable human resources, ensuring work schedules and efficient operation.
Outsourcing is a challenge that labs need to bravely overcome if they want to reduce production costs and increase profits for the lab. There are always risks, no matter when you are self-manufacturing but be confident that outsourcing labs are always ready to listen and share to understand their customers, once the outsourcing lab understands the technical and aesthetic requirements proposed by your lab, they will be a reliable companion throughout the business development process with you. Although the outsourcing market in Vietnam is still young compared to many other countries, it contains many potentials if you choose to trust and accompany, you will certainly not be disappointed.
Author: Xdent Team