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Ah, the good ‘ole PFM: the staple of fixed prosthetics since the 1960s. Even in this new age of all-ceramic restorations, gold alloys are still used in a significant percentage of the cases done in most labs. IdentAlloy/IdentCeram, which certifies materials used in dental restorations, reports that in 2008 high-noble and noble alloy certificates comprised 69% of the certificates shipped by the organization. Final figures for 2009 are not available yet, however early indications are that this figure will be down but not as much as you might think.
Ah, the good ‘ole PFM: the staple of fixed prosthetics since the 1960s. Even in this new age of all-ceramic restorations, gold alloys are still used in a significant percentage of the cases done in most labs.
IdentAlloy/IdentCeram, which certifies materials used in dental restorations, reports that in 2008 high-noble and noble alloy certificates comprised 69% of the certificates shipped by the organization. Final figures for 2009 are not available yet, however early indications are that this figure will be down but not as much as you might think.
That means even at today’s prices, gold alloys of various compositions are going to be around for a long while, and you will need to cope with the capital expenditures involved. High gold prices impact two main aspects of a laboratory’s operations.
Impact: Lab finances
High gold prices mean the lab requires more operating capital. It costs more to buy and inventory alloys to use in your daily operations. Because laboratories pass the cost of gold on to their dentist clients, it means labs must carry higher accounts receivable. It also means higher costs for work loss and increases the potential for theft.
Take action 10
Don’t let the current volatility of gold pricing get the best of your business. Follow these 10 steps to ensure the high price of gold doesn’t beat you up.
1. Order smaller amounts of alloy more frequently
2. Make sure the credit limit with your alloy supplier or on your credit card is high enough to cover costs
3. Review accounts receivable for any slow-paying clients
4. Review pricing structure to accommodate fluctuating alloy prices
5. Review lab procedures to minimize remakes
6. Make sure you have a good scrap recovery program in place
7. Communicate with clients
8. Take a look at alternative alloys that may be less expensive and more price stable
9. Market to clients that you have alternate products to offer if higher invoices are making them nervous
10. Prospect for new accounts
Impact: Sales
As the total invoice for each case creeps higher because of increased gold costs, clients may be more susceptible to try another competitor lab. That could lead to a loss of business. This loss sometimes gets hidden if you are only looking at the total sales generated for an individual client. Total dollars may be the same due to the higher gold charges, but in reality that client may actually be sending you fewer cases.
Action: What to do
1. Aggressively manage your cash.
2. Stay close to your customers.
3. Act quickly if you see a fall off.