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Web Exclusive | April 2, 2009

Exclusive Interview


Don Warden, President of Lord’s Dental Studio, talks about the GeoDigm/Lord’s acquisition

DLP: I don’t think most of our readers are acquainted with the company GeoDigm. Who are they and what is their background in dentistry?

Warden: Originally, GeoDigm produced a product called the E-model that provided digital analysis and archiving of models for orthodontics.  The idea was based on the work of Dr. Bruce Hultgren, an orthodontist, who worked with engineering personnel to develop a software program that would show detailed jaw motion and occlusion. With the aid of proprietary laser scanning technology, GeoDigm was able to capture and create incredibly accurate virtual models.  Once this was accomplished, they had a platform on which they could begin developing software for the production of crown and bridge restorations, which they called the ICON system.

GeoDigm has been under the radar for quite sometime because GeoDigm doesn’t sell systems, and has focused its lab acquisitions in the Minneapolis area. They have carefully been developing their strategy and testing their technology to ensure its integrity before making a move out-of-state.  They made the decision fairly early on that it would be better to develop technology internally rather than sell it to laboratories. Deploying their system through acquired labs keeps the process close to customer requirements. I think that’s why they have been able to develop the product to the degree that they have. By owning the laboratory and dealing with all the real-life issues of dentists, it becomes essential to quickly change those aspects of the technology that need tweaking.

DLP: What was behind your decision to team with GeoDigm?

Warden: We looked at the GeoDigm system back in 2003 but it couldn’t do what we needed it to do. Since then, we looked at most every system on the market and even became involved with engineers from a couple of different companies. What we kept running into were systems that didn’t address the real challenges of the dental lab manufacturing process. And that was a huge frustration to us. Even the GeoDigm system back then was not something that we felt blended into our business model. But over a period of time GeoDigm acquired a couple of labs in the Minneapolis area, including Excel Dental Studio, and began to get their engineering people working directly with lab technicians on real cases to optimize the CAD software. Two years ago Joel Richardson, who operates Excel, called me to invite Lord’s to once again take a look at GeoDigm’s system. Kris, who heads up R&D for Lord’s, visited Exel and called to inform me that all the things we had been trying to get done with some of the other manufacturers were actually being done with the ICON system. So we worked out an arrangement to get the ICON system in-house and validate the technology in our lab. While this was being done, we framed out the long-term relationship, which was completed last summer.  The deal was consummated in February after GeoDigm and Welsh-Carson completed their discussions

 
DLP: What exactly is the ICON system?

Warden: ICON is a patented, proprietary open-architecture scanning and CAD design technology. Once the case is digitized and designed, we use equipment from third party vendors to fabricate the actual restorative parts whether that is a 3D printed wax coping for casting or pressing, a zirconia substructure, or full-contour milled ceramic crown. The ICON system does not produce a “new” product as so many other CAD/CAM systems do. It allows existing product lines (like PFMs and full casts) to be made much more consistently and efficiently. And that’s a great story for our customers. We tell them “all the products and services you love about Lord’s still exist, but they are even better. For example, we can dial in specific required parameters on a micron basis for each of our customers such as occlusal clearance so that every restoration that doctor receives is completely customized to his or her preferences. The dentist saves adjustment time chairside and we are able to deliver a more consistent product case after case. The system itself is intuitive enough that we were able to quickly convert production to this method with minimal training.


DLP: $100 million is a lot of money to throw into this industry. I’d like to get your perspective on how this and other capital investment initiatives will change the industry.
Warden: Let’s start with a few premises:

1. Lack of consistency is the number one reason a dentist switches a laboratory.  While exquisite quality can be achieved, consistency is difficult when relying on craftsman skills (a painter can paint a beautiful picture, but never the same one twice).

2. The need for the extensive training of people in order to increase capacity is a major barrier to growth in the dental lab industry.

3. Most laboratories are not capitalized to the degree necessary to directly participate in the emerging technologies.

4. Half of all lab owners are in the years where business succession must be top-of-mind for them.

5. Technology has changed other industries.

If you agree with each of those, I think it’s fairly easy to see how things will change.  The GeoDigm model will be a great opportunity for many lab owners, both large and small, who want to participate in new technology and solidify their transition strategy. Right now GeoDigm owns laboratories in Greenbay and the Minneapolis area but is certainly not confining its acquisition strategy to these areas. After all, in today’s concept of distributed manufacturing, location becomes less and less important.

DLP: How is this acquisition changing your business model if at all. What are your plans for growth in the next 5 years? Do each of GeoDigm’s laboratories operate independently?
Warden: Lord’s strategy will continue in large part as we’ve done before.  We have always focused on quality materials and processes, exceptional customer service and the latest advances in technology that benefit dentists and their patients.  These are the cornerstones that have enabled Lord’s to grow like we have. Obviously, we are making a huge advancement in the technology area with the Geodigm partnership.  In the other areas, Geodigm understands that each laboratory brings its own brand promise to its customers, and to the degree that they can enhance that brand promise, they bring tremendous resources to the table. They also understand that much of the brand customers cherish is the relationship, which is why GeoDigm wants the laboratories in the group to maintain a high level of autonomy.  The customers keep getting what they love about the lab in the first place, only it’s even better.