The impact of Covid on the dental outsourcing market

China and Vietnam are two large and potential dental outsourcing markets in Asian Market. There is no denying that the advantage of China market seems significant compared with the Vietnam market in terms of transportation, prices, and variety of products.

However, local labs that depend on China’s dental market can get problems and adverse circumstances when China market has sudden changes out of control. If you own a potential dental lab, it will be better to think about the cooperation with China and VietNam in parallel.

The impact of Covid on the dental outsourcing market put many local dental labs in passive situations when China lockdown to prevent Covid from spreading. Tons of goods are stuck, leading to stagnant business operations. A long delay in customer orders leads local labs to rush into the Vietnam market to find an exit

Request on price, productivity, quality, and turnaround time are the top questions that Vietnam labs receive from the foreign dental business. No backup plans with the first-time cooperation with Vietnam labs made local labs confused and had difficulties in following the new market and the new procedure.

The impact of Covid on the dental outsourcing market brings many challenges and opportunities for dental labs in Vietnam. The challenge of meeting qualified human resources for new orders, meeting delivery time with a sudden increase in goods volume. However, this is also an opportunity for dental labs in Vietnam to find new customers, and a chance to improve production.

This article will provide the impact of Covid on the dental outsourcing market and 5 issues about dental outsourcing in Vietnam

1. What is the impact of Covid on the dental outsourcing market?

a. Stalled goods

Local labs that depend entirely on an outsourcing market fall into a passive position when partners stop producing goods. The shutdown of production for a long time made it difficult for the local lab to find another market to replace it.

b. Difficulty in finding a replacement partner

With the characteristics of the tooth processing industry, finding a replacement partner is not an easy thing. In addition to the problem of finding reasonable-cost manufacturers, the local lab also faces the challenge of ensuring the quality of goods to customers because different labs will have different production standards, requiring both parties to take time to adjust accordingly.

c. Quality failure

With time pressure to process goods, local labs will send a series of goods to new partners. Products made in a ‘fire fighting’ situation will often not be of good quality.

d. Effect on the dateline

The policy of controlling goods during the Covid epidemic has also been tightened, leading to difficulties in goods circulation; delaying the dateline is the most mentioned situation when the covid epidemic broke out.

e. Influence on the faith of outsourcing business

Business faith is the most impact of covid on the dental outsourcing market. Due to the nature of cooperation outside the territory, most outsourcing businesses often take a lot of risks with international customers.

Small and medium outsourcing businesses with the desire to find customers often support the policy of producing goods first, paying later. But after receiving the goods, local labs often use many reasons to refuse to pay, causing a loss of business faith

2. Five issues about the dental outsourcing market in Vietnam

a. A new partner means everything is new

The dental manufacture can be the same in China and Vietnam markets, but the way of working, time communication, price, delivery, and specification will have some differences in details:

– Delivery time: It usually takes 3,4 days from the USA to Vietnam and vice versa. In the case of scan files, the turnaround time and delivery can meet under seven days. For dental impressions, it will take more than ten days for customers to receive the final goods

– Policy payment: The payment policy can be different between Vietnam labs. Thus, it is the best to ask about the payment policy before deciding to send out your package

– Manufacturing specifications: Each lab has a different product specification, just like each dentist has a different skill set. Therefore, you should send a sample of the product specifications to your new partner so that they can adjust and produce according to your wishes.

– Time working: It should be noted about the daily working time when your partner is in a different territory with another time zone. The urgent information sent during your partner’s sleeping time will no longer be urgent

– Custom clearance: It is recommended to consult the shipping information from the partner before sending the goods to avoid the delay in custom clearance

The impact of Covid on the dental outsourcing market makes local labs dependent on a single market takes a long time to find replacement labs, to get used to the new workflow, thereby affecting business operations.

b. Proactively provide complete information to the new partner

For long-term partners, they can understand your product standards, but for new partners, local labs need to provide clear instructions. It is best to send a sample so that the new partner can quickly grasp and manufacture the teeth according to your lab’s standards.

Dental manufacturing is a rather picky industry when each lab has its own standard of aesthetic evaluation. The shape, color, and dental material are suitable for this lab, but not for another lab. For long-term cooperation, outsourcing lab needs time to discuss and understand the standards of a new local lab. It will be difficult to bring good quality if the customer sends many goods with urgent time requirements. Thus, the local lab needs to prepare more partners from different countries to ensure that the goods are always maintained stability.

c. Agreement on the policy of payment before shipping

Each lab will have a different payment policy for customers, so please proactively ask about the payment policy before deciding to send goods. The fact that new customers want to pay after receiving goods will put outsourcing lab at very high risk, so for new customers, reputable and senior lab businesses all have a separate payment policy.

Payment policy for new customers is also a criterion for selecting customers. Customers who send goods in a rush and are not satisfied with the payment are often unreliable partners, bringing high risks to the business.

The impact of Covid on the dental outsourcing market makes it difficult for most dental labs to maintain their finances, so a fair payment policy for both parties will ensure that no business has to suffer

d. Should have testing cases before sending bulk

Testing cases are always recommended before local labs want to cooperate on large orders. Through test cases, you can know the quality of the outsourcing lab or can give suggestions on product processing to match your lab’s standards.

Each lab has a different product standard, testing and exchanging to adjust the specifications accordingly will help uniformity in quality. So sending testing and exchange is absolutely necessary if your business wants to outsource in the 2nd market

The impact of Covid on the dental outsourcing market is mass sending without testing lab quality for the purpose of pushing goods. The risk of unprocessed backlogs and the approaching dateline makes the local lab take the risk on quality to meet the delivery time for their customers.

Mass sending of goods to a new partner makes both the local lab and the outsourcing lab face many difficulties in terms of quality assurance when the outsourcing lab does not have time to prepare human resources and understand the new standards while local labs face the risk of losing customers because of quality flaws

e. Should not be entirely dependent on one market

“Preparation always brings more advantages” that’s why when the Covid-19 epidemic broke out in the Chinese market, Many labs maintained stable business operations and still sent goods to customers on time, even receiving more goods due to other labs. That is because they have preparation in 2 markets. When the Chinese market is frozen, the goods will be transferred to the second market in Vietnam.

Pre-cooperation with one of the two markets will give businesses a competitive advantage over new businesses when all partner labs have a priority position, ensuring goods for loyal customers. Besides, the production also went smoothly when the two sides understood each other’s working process.

The impact of Covid on the dental outsourcing market is a warning bell for businesses that have been and are dependent on one market. Risks always exist, and people who know how to manage risks will always know how to prepare for themselves a backup exit when a situation is out of their control.

In Vietnam, Xdent is one of the specialist dental partners for the foreign market. Xdent is a subsidiary of Nha Viet dental group – the largest distribution center of dental materials in the Vietnam market since 2006. With a long experience in the dental field, we will bring quality dental products at competitive prices to the customers. If you are looking for a 2nd dental outsourcing market outside of China in Vietnam, then Xdent always welcomes you.

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Author: Xdent team