All About Alloy Management: Part 1

When it comes to alloy management, there are several things laboratories can do to avoid searching for the elusive pot of gold at the end of the bottom-line rainbow. I’m talking about selecting which and how many alloy choices to offer dentists for their metal-based restorations, as well as how to determine what to charge for those restorations. Other considerations are the techniques used on a daily basis for casting, along with aspects of your laboratory’s infrastructure such as extraction equipment. Even what you do in terms of collecting and refining your scrap alloy lends itself to how profitable and efficient you’ll be in terms of your alloy use.

Obviously, an in-depth review of each is beyond the scope of what we’re trying to do here. And, addressing each area this month defeats the purpose of a quick and useful read. So, we’ll begin with two basics: alloy offerings and determining fees. It’s a great place to start, and we’ll be well on our way to discuss next month’s topics: casting, laboratory extraction considerations and scrap refining.

Limiting Choices Eliminates Confusion and Excess Labor Costs

We’ve limited the number of alloy choices we provide our doctors to two Aquarius Hard and Lodestar and the time we’ve saved not only in managing the alloys but also in processing them has been tremendous. And, as we all know, inefficient use of staff time is one of the biggest bottom line busters in business. But, why limit the alloys to two, you might ask?

Well, the decision came after years of handling four or five noble alloy, medium precious and high-noble alloys that ultimately required our technicians to do things in a time-consuming and inefficient way just to stay on top of things. For example, the person who cast the alloys had to monitor more of them and that became ineffective. If the person waxing the alloys was working on a multiple unit case for example, a 10-unit case in which five units were semi-precious and five units were precious that required the use of two separate rings and two separate investment times.

The process was complex and confusing, and the solution clear: offer two choices a white gold and a yellow gold. Aquarius Hard is 90 percent gold and yellow in color, while Lodestar is 52 percent gold and white in color. As a result of this switch, we now have a system in place in which one person waxes all the units for that day and 90 percent of the day’s castings will be in one alloy. Typically we use much more white gold than yellow gold.

What this has done for us is eliminate the worry of whether or not we have a particular alloy in stock, because we know we will. We no longer have to worry about inventory, since we purchase 10 ounces of each alloy we offer at a given time. Because there are only two alloys used one white gold and the other yellow gold the chances of a technician confusing which alloy is which, casting a restoration in the wrong alloy or then having to re-wax and re-cast it are eliminated.

What’s more, limiting the alloy choices to two has also benefited the technicians who opaque the restorations. For example, they no longer have to worry about keeping track of the different processing techniques required for different alloy components to promote porcelain bonding. By having just these two particular alloys, they can visually identify what is needed just by the color white or yellow gold. The process is much more streamlined, and we’ve narrowed down the potential problems that can arise just from having too many alloys in the mix.

Figuring Out the Fee Factor

It’s a known fact that many laboratories charge a per unit fee for the alloy used in PFM restorations. Well, I know doctors hate this with a passion because, many times, if the crown is large, the doctor could end up paying a lot more for the metal alone and that’s eating into his or her profits on the crown. But, as a laboratory owner, I do have to charge for the alloy that’s used.

Do we set a fixed rate and lose out if the cost of precious metals goes up? Or do we consistently base the cost of the restoration on the weight of metal used? As you can imagine, all the time we saved by limiting our alloy choices could have been wasted by figuring out our fees. But we did find a way and it’s been working for us so far.

For three months, I examined and tracked our alloy costs and the number of units we fabricated with the alloys. For example, we bought 120 ounces of gold alloy and used it to fabricate 2180 units. That translated to about 1.1 pennyweights of alloy per unit. So, I had a baseline number for the cost of the alloy per unit, and that’s what I’ve used when charging for such restorations. If the cost of gold goes up, then I increase the fee for the restoration by the increase in the cost of the gold.

Determining our fees for alloy restorations in this manner has eliminated the need for us to tediously weigh everything each time a metal-based restoration is created. Having to do so would waste a great deal of time as much as 45 minutes a day just weighing the alloy and figuring out a per unit cost that’s based on weight. Now, we don’t do any of that, we’re more productive and more successful!