How Dental Labs Can Thrive In The Time Of Change?

Introduction

The dental industry is undergoing a deep transformation fueled by the convergence of technological innovation, corporate investment, and global economic shifts. In recent years, corporate and venture capital investments have poured into dental technology. For example, Pearl raised $58 million to expand its AI-driven dental diagnostics, while Dentsply Sirona continues to acquire innovative firms such as Sirona Dental Systems. Both are redefining what’s possible in digital dentistry. Meanwhile, global economic dynamics, from fluctuating production costs and supply chain disruptions to evolving consumer behaviors are reshaping how dental businesses operate, price, and deliver care.

For dental labs, this wave of transformation has disrupted the familiar rhythm of craftsmanship that once defined the profession. Not long ago, a lab could thrive with manual techniques such as waxing, pressing, and finishing restorations by hand, relying on long-term relationships with local dentists and a steady stream of traditional cases. But today, the rise of CAD/CAM systems, 3D printing, AI-powered design, and intraoral scanning has reset the standards of speed, precision, and consistency.

The result?

• Manual workflows can no longer compete with digital production cycles.

• Lack of digital investment means losing clients to tech-enabled competitors.

• Limited service offerings translate into declining profitability.

However, these challenges don’t exist in isolation. They’re symptoms of a larger shift reshaping the entire industry. Over the past decade, the landscape has consolidated rapidly as many lab groups expanded through acquisitions. The number of independent dental practices and laboratories continues to fall, while corporate-backed Dental Service Organizations (DSOs) and multi-location laboratory networks gain momentum. This shift strikes at the heart of how dental labs have traditionally built success. Where once personal relationships between lab owners and independent dentists formed the foundation of business, today’s reality is ruled by procurement systems and pricing models designed to maximize efficiency and profitability. In this new ecosystem, the old ways of doing business are no longer sustainable, and adaptation is no longer optional.

The Rise Of Group Practices And Its Impact On Dental Labs

The rise of Dental Service Organizations (DSOs) and other group dental practice models has been a gradual yet powerful shift that continues to reshape the global dental landscape. Between 2015 and 2024, the proportion of U.S. dentists affiliated with DSOs nearly doubled, from 7.2% to 16.1%. 

This expansion is driven by both economic logic and operational efficiency. By consolidating under one organizational structure, group practices achieve economies of scale, lowering overhead costs while boosting profitability. The model’s predictability and scalability make it highly attractive to private equity and corporate investors, who provide the capital to fuel further growth, adopt new technologies, and strengthen patient acquisition through professional marketing.

For many dentists, this shift represents an appealing alternative to independent practice. By centralizing administrative functions such as billing, HR, and procurement, DSOs allow clinicians to focus on patient care rather than business operations. This system is particularly attractive to young dentists burdened with student debt, offering them financial stability, mentorship, and access to cutting-edge technologies early in their careers. It’s no surprise that the percentage of dentists joining DSOs within the first decade of practice continues to climb steadily each year.

As DSOs grow, their influence reshapes the expectations placed on dental laboratories. Labs must now align with a new set of expectations, data transparency, pricing consistency, and digital integration. Group practice leaders seek measurable outcomes and scalable processes, while their clinical teams look for education, reliability, and seamless collaboration.

At the same time, patients themselves are fueling this transformation. They now expect convenience, integrated care, and digital communication, from extended operating hours to multiple specialties under one roof. DSOs are uniquely positioned to meet these demands, giving them a decisive advantage over single-location clinics that still rely on traditional models. This accelerating shift signals a new reality: for dental labs, maintaining traditional relationships alone is no longer enough. To remain relevant partners, laboratories must evolve in tandem, adopting digital workflows, building data-driven systems, and creating the operational reliability that modern dental organizations demand.

The Consolidation Wave Reshaping Dental Labs

Alongside the rapid rise of DSOs, dental laboratories are experiencing their own wave of consolidation and structural change. Across the United States and other mature markets, both regional and national lab groups have expanded through acquisitions, gradually absorbing smaller, independent operations. The result is a steady contraction in the number of standalone labs, from nearly 6,900 in 2013 to just over 5,000 by 2023, marking a 25% decline within a decade.

This decline is not simply the outcome of mergers and acquisitions, but a reflection of systemic pressures that smaller labs struggle to withstand. Rising operational costs, limited investment capital, and the rapid digital transformation of dentistry have made survival increasingly difficult for traditional family-owned laboratories. Many of these businesses, once passed from one generation to the next, now face an environment where artistry alone is no longer enough. Modern dental production requires interdisciplinary teams, digital expertise, and significant technological investment, shifting the nature of laboratory work from craftsmanship to industrial innovation.

Technology, however, has also become the very tool enabling new forms of competitiveness. Labs that have embraced digital workflows, from CAD/CAM and 3D printing to AI-powered design and automated case management are finding ways to thrive even as the industry consolidates. These innovations allow them to operate beyond geographical limits, serving clients remotely, ensuring faster turnaround times, and offering personalized support through digital collaboration. The labs succeeding today are those that balance efficiency with flexibility, streamlining production while preserving their unique artistry. But modernization can be costly and complex. Not every lab can invest in every machine or platform. This is where shared resources and outsourcing partnerships play a crucial role, helping small and mid-sized labs expand capacity without compromising identity.

What was once a small workshop sustained by local dentist relationships has now become a business ecosystem defined by data, technology, and collaboration. The laboratories that will continue to stand are not necessarily the largest, but the most adaptive, those willing to evolve their models, embrace innovation, and seek strategic alliances that strengthen their capabilities in a changing landscape.

Two Sides of Change: Challenges and Opportunities for Dental Labs

For many lab owners, consolidation across both clinics and laboratories creates a paradox: tighter margins, yet new opportunities. DSOs leverage their scale to negotiate lower unit prices, forcing independent labs to rethink pricing and efficiency. Competing on price alone is no longer sustainable. Meanwhile, digital compatibility has become a non-negotiable standard. As DSOs and modern clinics integrate digital workflows, labs must keep pace with CAD/CAM systems, intraoral scanning, and AI-assisted design to stay connected. Relationships that once relied on personal trust now depend on digital interoperability and transparent performance. For smaller and mid-sized labs, these shifts can feel overwhelming. The pressure to invest in expensive technology while competing against large-scale production groups has left many struggling to protect profitability and retain long-term clients.

Yet within this challenge lies an emerging opportunity. The same consolidation driving competition also brings stability and scalability for labs that adapt intelligently. DSOs, by nature, operate with predictable case volumes, offering consistent revenue streams for laboratories capable of balancing high output with quality control. Crucially, success in this new landscape no longer depends on scale alone. A well-managed, technology-savvy lab that builds efficient digital workflows and leverages the right outsourcing partnerships can rival larger competitors in productivity while keeping overhead costs low. Outsourcing, when approached strategically, empowers smaller labs to extend their production capacity without sacrificing craftsmanship. By collaborating with specialized partners for tasks such as milling, design, or finishing, a lab can focus on what it does best, whether that’s esthetic customization, complex implant cases, or client relationships, while still meeting the price and volume expectations of group practices. This shared production model not only improves turnaround time and cost-efficiency but also allows independent labs to remain agile and competitive amid rapid industry shifts.

At the same time, diversification remains key. Many independent and boutique labs continue to thrive by carving out niche expertise in high-end esthetic restorations or complex full arch reconstructions, areas where artistry, communication, and customization hold greater value than speed or scale. For these labs, technology serves not as a replacement for skill, but as a multiplier of it.

In the end, change brings both risk and renewal. Some labs will grow through partnerships and shared resources; others will specialize in areas that larger production labs cannot easily replicate. What matters most is the willingness to adapt, to embrace collaboration, digitization, and continuous learning.

How Mid-Sized Dental Labs Stay Competitive In The Changing Era

In today’s evolving dental landscape, there is no single formula for success. Each laboratory must find its own path, whether through partnerships, specialization, or strategic independence. Some labs have chosen to collaborate with small and mid-sized practice groups, positioning themselves as long-term partners that grow alongside their clients. Others pursue mergers or inter-lab collaborations to share technology, staff, and resources. Yet, independence remains a viable choice for laboratories that can stay agile and capitalize on new opportunities as they arise.

For many mid-sized labs, this balance between tradition and transformation is the key to longevity. The most resilient laboratories are those that invest in digital technologies such as CAD/CAM systems, milling machines, and 3D printers, while still maintaining the craftsmanship and artistry that define the field. By offering a diverse range of services at different price points, these labs can compete for both everyday restorative cases and complex, high-value procedures like implant-supported restorations or full arch reconstructions. This versatility allows them to serve a broader client base from newly graduated dentists to established clinicians, while preserving the quality and identity of their work.

In this digital age, laboratories are evolving from being mere product manufacturers to becoming strategic partners in the restorative process. Many forward-thinking labs now offer digital case planning, guided surgery support, or even chairside assistance, enhancing clinical outcomes and deepening professional relationships. As technology standardizes product quality across the market, differentiation now lies in education, expertise, and collaboration — the ability to provide ongoing support and value beyond fabrication.

Mid-sized and boutique labs, in particular, hold an advantage in delivering personalized service and premium esthetics that large-scale production facilities often struggle to replicate. By acting as consultative partners, offering material guidance, troubleshooting complex cases, and sharing digital expertise, these labs build loyalty that withstands the pressures of industry consolidation.

Ultimately, sustained success requires a mindset of continuous improvement. Investing in team training ensures that technicians not only master emerging digital tools but also retain a deep understanding of dental fundamentals, principles of occlusion, anatomy, and esthetics that underpin every great restoration. Technology may evolve, but craftsmanship remains the soul of dentistry. At this intersection of art, science, and business, collaboration becomes the bridge between scale and specialization. This is where outsourcing and shared digital manufacturing enter the picture, not as a threat to independence, but as a means of empowerment.

At XDENT LAB, we believe that mid-sized and independent dental laboratories don’t have to face this transformation alone. By providing advanced outsourcing services, digital case support, and production partnerships, we help labs stay competitive, expand capacity, and maintain an unique artistry in an increasingly digital world. 

Conclusion

The coming decade will continue to redefine the dental laboratory landscape. Consolidation will persist as DSOs expand their market share and corporate-backed lab networks pursue greater economies of scale. For independent and mid-sized labs, this may seem like an era of uncertainty; yet it is also one of unprecedented possibility. The demand for restorative solutions is not declining; it is evolving. Dentists and patients alike are seeking faster turnarounds, more consistent quality, and greater esthetic precision, goals that can only be achieved through digital collaboration and intelligent resource-sharing.

As technology becomes the great equalizer, laboratories that embrace digitization, outsourcing, and strategic partnerships will continue to thrive. Still, amidst all this change, one truth remains: dentistry is deeply human. The relationships between dentists, technicians, and patients will always form the heart of the profession. What changes is how these relationships are sustained through data, shared platforms, and seamless communication. The successful labs of tomorrow will be those that master this balance: combining human artistry with digital precision, local identity with global connectivity.

XDENT LAB sees this transformation not as an endpoint, but as the beginning of a new partnership model. By offering high-quality outsourcing, digital workflow support, and shared manufacturing capabilities, we help laboratories scale without losing their individuality. Whether it’s expanding production capacity, meeting DSO standards, or simply freeing up time for artistry and innovation, we are here to empower labs to do more, not by replacing them, but by working beside them.

The future of dental laboratories is not about resisting change, but about redefining collaboration. With the right partners, every lab can find its place in the next generation of dentistry. Together, we can ensure that technology doesn’t erase the art of dental craftsmanship, but amplifies it for decades to come.

Acknowledgement: This article draws insights from an article: 
Thriving in Times of Change: Navigating the Growth of the DSO Model and Consolidation of the Dental Lab Industry written by Noah Levine 2025. 

XDENT LAB is an expert in Lab-to-Lab Full Service from Vietnam, with the signature services of Removable & Implant, meeting U.S. market standards – approved by FDA & ISO. Founded in 2017, XDENT LAB has grown from local root to global reach, scaling with 2 factories and over 100 employees.. Our state-of-the-art technology, certified technicians, and commitment to compliance make us the trusted choice for dental practices looking to ensure quality and consistency in their products.

Our commitments are:

• 100% FDA-Approved Materials.

• Large-Scale Manufacturing, high volume, remake rate < 1%.

• 2~3 days in lab (*digital file).

• Your cost savings 30%.

• Uninterrupted Manufacturing 365 days a year.

Contact us today to establish a strategy to reduce operating costs.

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