The Group Dentistry Now Show: The Voice of the DSO Industry – Episode 210

Ranked the #1 DSO Podcast!

Welcome to The Group Dentistry Now Show: The Voice of the DSO Industry!

In this episode, we take you on-site to the Dental City warehouse in Green Bay, Wisconsin, for an inside look at the latest advancements in supply chain modernization, robotics, and technology shaping the dental industry.

Join us as we sit down with a panel of leading supply chain experts, including:

• John Mathys – Co-owner of Dental City
• Joe Cavaretta – Founder of Cavaretta Consulting Group
• Stephanie Schoenrock – Senior Consultant at Cavaretta Consulting Group
• Brandon McCarty – CEO and Founder of Curemint
• Jordan Lorenz – VP of Sales and Marketing at Dental City

In this episode, you’ll learn about:

• The importance of investing in technology and robotics for supply chain efficiency.
• How Dental City has modernized its operations to better serve customers and support employees.
• Key metrics and statistics that drive performance in the dental supply chain.
• The role of AI in enhancing operational efficiency and customer service.
• The evolving landscape of the dental industry, including market consolidation and the rise of DSOs.

To learn more visit https://dentalcity.com/

You can contact Jordan Lorenz at jlorenz@dentalcity.com or John Mathys at jmathys@dentalcity.com

To contact the other panelists, you can find their contact information here:

Joe Cavaretta at joe@cavarettaconsultinggroup.com or visit http://cavarettaconsultinggroup.com/

Stephanie Schoenrock at stephanie@cavarettaconsultinggroup.com

Brandon McCarty at brandon@bpmsolutions.ai

If you like our podcast, please give us a ⭐⭐⭐⭐⭐ review on iTunes https://apple.co/2Nejsfa and a Thumbs Up on YouTube.

Choose your favorite listening app below and subscribe today so you don’t miss an episode! Full transcript is also provided below. See all of our podcasts HERE.

Dental City Supply Chain DSO podcast transcript:

Welcome to the Group Dentistry Now Show, the voice of the DSO industry. Join us as we talk with industry leaders about their challenges, successes, and the future of group dentistry. With over 200 episodes and listeners in over 100 countries, we’re proud to be ranked the number one DSO podcast. For the latest DSO news, analysis, and events, And to subscribe to our DSO Weekly e-newsletter, visit GroupDentistryNow.com. We hope you enjoyed today’s show.

Bill Neumann: Welcome to the Group Dentistry Now show. I am Bill Neumann. And if you are listening to this podcast, after you’re done listening, you really should watch the video. So please come to our YouTube channel or go to group dentistry now.com because we are on site at the Dental City Warehouse. We’re at their headquarters in Green Bay, Wisconsin, and As you can see, there’s a lot of activity here. They’ve invested a lot of money in robotics and technology, and it’s really exciting. I mean, it’s fun to be here to see the changes. I was here about a year ago, and things have changed dramatically here. And they’re really investing in their business so they can help serve their customers, and also it’s a great benefit to the employees here as well. So we’re focusing on supply chain modernization. So when you see all these robotics and technology that they’re using, whether it’s the investment in their website that you might not necessarily notice, but you certainly can see what’s going on here. We have five supply chain experts with us on this podcast. We’re going to talk about supply chain modernization. Those experts are John Matice. He is one of the owners of Dental City. We have Joe Caveretta. He’s with Caveretta Consulting Group. He’s the founder. We also have Stephanie Schonrock. She is a senior consultant at Caveretta Consulting. And we have Brandon McCarty. He is the CEO and founder of a company called Curement, which was one of the first procurement platforms on the market for the dental industry. Jordan Lorenz, who’s the vice president of sales and marketing at Dental City. So we’re going to talk about procurement. We’re going to talk about supply chain modernization, why a distribution partner that’s investing in the future of the industry is so important, and a whole host of other issues that will be really impactful for you. So let’s get to those interviews. We are live at Dental City in Green Bay, Wisconsin. We have the owner of Dental City, John John Mathys. John, it’s great to be here with you, and thanks for the invite.

John Mathys: Well, great to have you. And Bill, you do so many wonderful things for the industry. We really appreciate our relationship with you and what you’re doing for really the industry as a whole.

Bill Neumann: Well, thank you. And I remember when you and Jordan invited me out years ago when you were really kind of building out a strategy to address emerging dental groups, DSOs, and really a lot of the changes we’re going to talk about today in the industry. And that was pre-COVID, probably 2018 or 2019. Yeah, that was a while ago. Yeah, and things have really changed here. And one of the reasons we’re here today is to talk about what you’ve done as an organization, incorporating robotics, which we’ll see roaming around, and then also technology. So can you talk a little bit about why you decided to make that investment?

John Mathys: Yeah, sure. You know, Bill, Dental City as a company, every five years we go through a strategic plan. And so the key thing with the strategic plan is to be able to chart out our next five years. And so recently, the last five years, we really took a look at the changing dynamics of the dental industry and really came up with a plan that, through our strategic plan, that really said, listen, there’s some key initiatives we need to do. And one of them was really revolving around the changing dynamics in the dental industry and how supply chain is going to affect that. So we came up with a strategy that really said Dental City, in the next five years, needs to be a world-class distribution business. And really, from a supply chain management standpoint, we have to deliver the highest level of service to our customers. Whether they’re a single practice, a DSO, a platform, we need to meet them where they’re going to want to come into Dental City and participate with our business. We need to be at the highest level. And then we have to deliver the highest level of performance to the customer each and every time.

Bill Neumann: So the investment was technology and robotics. That was part of the five year strategy plan. And he talked a little bit about how many I mean, there are a lot of these robots running around here and talk a little bit about how you determine the number of them and what they do here.

John Mathys: Yes. So, you know, we went through an extensive bit of research with our statistical data on how we process orders, how the orders come through Dental City, how we would process them in the warehouse. And with collaboration with consultants, we came up with a system of really adding some key components to our distribution centers. One of those was a carousel, vertical lift modules, going from a pick-and-pass picking process to a pick-to-consolidation process. Once we determined we were going to go to a pick-to-consolidation process, we really started looking at what kind of technologies we could use to efficiently pick. In the end, robotics played a major role in that decision. So we have about, I think, 22, 23 robots within our distribution center right now. We’ve partnered with Locus Robotics, and it’s been a huge success for us. I think some of the benefits is the efficiency at which we can pick an order quickly and then the way that it impacts our force, our team here out in the warehouse as far as reducing a lot of the stress. Traditionally, we had people pushing large carts around, picking multiple orders. And we didn’t even realize the benefit that we were going to have by engaging with robotics within our organization. But it’s removed an immense amount of stress. And the other thing is, from a standpoint of an organization like ours, we want to have scalability. So if we begin to be partnering with a large platform or a large DSO group, we want to be able to take in that increased revenue that could come quickly and be able to scale up and handle that and have it be a seamless transaction. So we’ve been very, very happy with the engagement of the robotics, the VLMs, the carousels as well.

Bill Neumann: Just a couple of points that you mentioned. I saw one of those carts that you were talking about that people push. You still have a couple floating around in the back. And I mean, these are very heavy, big, big carts. So this does alleviate a lot of stress for your employees so they can focus on doing other things. So we talked a little bit about the impact it has on your employees, but what about the impact technology and robotics has on the customers?

John Mathys: Yeah, I think that’s a real important part. And what we learned really over the years is that the most important thing is when the customer places an order, they want that order delivered accurately, and in a very timely fashion. So we have some critical targets here. We’ve come up with a plan where any orders received by three o’clock are shipped out same day. Our targeted order accuracy is 99.9%. which last month we were at 99.9% accurate on all of our orders. We track that on a daily basis. Not only do we track that on a daily basis, but we track any errors that we have by where did that error occur? Did that error occur in the carousel picking area? Did it occur through a robotic? Did it occur through our consolidation area? And what we’re trying to do is strive for perfection, OK? Because the customer, in the end, wants their product delivered timely and accurately, right? And so our goal is to deliver the highest level of efficiency. And if you can’t track each specific area where there might be an error and make the corrections, you can’t deliver your promise to your customer.

Bill Neumann: That really leads into the next question I had, which you already started to spout them off, statistics. You’re a big numbers guy. You actually have a chart right here. And just before we started to film, you were asking somebody, I need these numbers. So what type of statistics do you have for us? And you already talked about some of the numbers that you really track on a daily basis. You know, why numbers? Why are you so focused on them? Obviously, it’s important to the business, but is that just the way you’re wired? Are you a numbers guy?

John Mathys: Yeah, I think, you know, as a business owner, you have to be able to answer questions when things don’t go right. And when you’re striving to hit a performance level, you have to have a number. And so if you don’t have the statistical data to manage that number, you really can’t give the performance level that you’re promising to your customer. I think for anyone looking to partner with a distribution, whether it’s a single practice or whether it’s a DSO, a large group platform, they really should understand the performance of the partner that they’re picking to deliver their goods. Obviously, a dental practice, when they get a patient in the chair, okay, they need that product there. They need that service there at that time so that they can take care of their patient. They don’t want to send them home and reschedule that patient. So it’s critical for us to do that. So we put key metrics in place. And those key metrics, we have things like we look at our fill rate or service level. And we really target for about a 99.5% accuracy or fill rate with our orders. And then on top of that, we have our VIP items, which are our top 200 items. And they account for about 33% of our total revenue. And our goal there is to be at 100%. And we run really consistently at about 99.9% accuracy rate. So you have to, when you look at supply chain, you have to have the merchandise in. So you have to acquire the merchandise, bring it into your distribution center, make sure that you have that available to ship. And then you have to turn around and you have to ship it accurately with minimal errors. So everything that we’re targeting is in the 95% to 99% accuracy rate. And so you start out with a system where maybe you’re not there, but you have to set targets and then find out why you can’t achieve those numbers and really peel back the layers of, how you determine the fixes to make sure that you give that accuracy to the customer. So we’ve done that from an order in inventory management point all the way through to our pick process here at Dental City. And obviously the robotics and the technology and even the use of AI has really impacted the level of performance we can give our customers.

Bill Neumann: I don’t know if we’re going to get through one interview without AI being mentioned. It’s in everything. It seems like we do, whether it’s personally or in business. Talk a little bit about AI and how that’s impacting your business.

John Mathys: I mean, we’re using AI in a number of different facets, everything from how we provide information to our sales team and how they can communicate with the customer, all the way down through our supply chain and our distribution. you know, some really good examples in our distribution centers is the AI that you need to drive the robotics, okay? And the technology that you need to use to make sure that, you know, you can have, you know, 23 robots on around here and they’re not, you know, bumping into each other or bumping into people.

Bill Neumann: And it is amazing. I’ve watched them and I mean, they’re zooming around each other and zooming around humans and working with humans and it seems to work pretty well. So that’s AI.

John Mathys: Yeah, and I think we also have to use AI from the standpoint of making sure that when we’re picking and putting to our consolidation area that we know what cube size is of all the product going into the boxing so that we can efficiently package the product. So it goes everything, it goes really through the whole realm of what we’re doing here from the pick, all the way to the packing and the shipping of the goods. So we’re definitely leveraging AI and we’ve got a great team here and we’ve got great partners that we have and consultants that we’ve used to really put together a system that we’re really proud of.

Bill Neumann: Yeah, you should be. It’s amazing, just the change that I’ve seen since the last time I was here, pre-robots, but it’s a lot more than that, right? I mean, you had to, get a lot of things in place before you could even put the robots into action.

John Mathys: Yeah, we probably had 15 different design plans for our distribution center. We kept tweaking them and tweaking them and tweaking them. I kind of say to our team, it’s easy to make things look hard. It’s hard to make things look really easy. And we’ve had to really work hard and spend a lot of time looking at data analytics and all of our shipping metrics and our information to make sure that we could come up with a system that was going to deliver the very highest level of service. And really do that in a relatively small footprint for an organization. as well as making sure that we can scale for, you know, as our revenue grows, because Dental City has been growing, you know, at roughly 15% a year. And so we have to accommodate for that growth. I think one of the great successes that we had was we have a five-year strategic plan to hit a certain revenue number. I won’t mention that revenue number. But last week, we had a one day where we hit Our revenue target, which is three years out from today, we hit that revenue target out, and our distribution center was able to handle all those orders, process those orders, and have them in the truck and heading out that day by 5 p.m. And so we’re real comfortable that as an organization, we’re capable of scaling to our revenue targets, which is three years out now, because we’re two years into our five-year strategic plan.

Bill Neumann: And that really leads into my next topic, which is you’ve got your five year strategic plan. We’re looking at the industry. It’s changing pretty dramatically, I’d say, in the past three or four years and a lot of different things going on. But one of the big things is market consolidation. And so some of your customers are growing, they may be adding a practice or two a month in some cases. Some of the larger groups are doing things like that. So you’ve got solo practitioners that are either selling their practices, they’re going to work for some of the larger DSOs. or doctors that are now saying, hey, I want to start my own private group practice or I don’t want to own just one location, but I want to own three, four, five or six. So you’ve got you’ve got really this dynamic change and you are really paying attention to it. But how has that impacted the decision making at Dental City?

John Mathys: Yeah, well, I think, you know, I’ve been in the dental industry for almost 40 years. So I’ve seen the traditional dentistry model for many, many years, but the dynamically in the last five years, the industry as a whole has dramatically changed. And I really think if you look out to the next five years, you’re going to see, you know, a quadrupling of those changes. And so I think It’s a challenge for all dental distribution businesses and supply chain businesses within all industries. But for Dental City and for our company, we really had to look to the future. And Jordan said to me one time, he said, you know, you can’t skate to where the puck is. You got to skate to where the puck is going. And unfortunately, right now, the puck is teleporting. OK, and the industry as a whole is teleporting at such a high level. So, you know, we’ve made a commitment that we want to be a player within the industry. And so we’re investing huge, huge sums of money. to make sure that we can deliver on our promise and our engagement with customers. And it’s things changing from traditional outside sales reps to inside sales teams to online activities to API connections to every different way that a customer can engage with our organization. So it’s definitely changing. And it’s a challenge for all distributors that you have to embrace it and try to put together a team that can take you there, right? And so that’s technology, infrastructure, that’s leadership. There’s a lot of moving parts to it. But if you’re up for the challenge, it’s kind of a lot of fun because things are changing quickly. So we’re enjoying it. We’re not… you know, fearful of what lies ahead, we’re, you know, rushing in and engaging at a high level to make sure that we can be on the forefront of really where the industry’s headed.

Bill Neumann: You sure are. And that’s why we’re here on site to really kind of highlight what you’ve done here. It’s no small feat to add robotics, make all the, like you talked about the design changes here in order to get everything to work. So we’re in Green Bay. Green Bay’s a Packer town, right? Big football town. So it’s a winning city. So winning is important. It’s certainly important to you, it seems. So what does winning look like to you in Dental City?

John Mathys: Yeah, well, that’s interesting. My great uncle was a quarterback for the Green Bay Packers with Frederick Lambeau in the 20s. So, you know, part of that, that competitiveness is really, you know, in my family genes. But as an organization, we foster a highly competitive environment here. We have some real founding belief systems that you earn your opportunity here. And so we have a competitive environment. We’re constantly challenging our team. We bring in performance coaches. In fact, we have a performance coach called, her name’s Betsy Mitchell. is she was a performance coach for the Green Bay Packers for many, many years. And so she’s been working with us for about 25 years. She’s retired, but she’s engaging with us. And her responsibility is really to coach, performance coach our team, our leadership team, as well as many of our employees. So from a standpoint of what our, expectation is, it’s a high level of performance here. And we use metrics, we use performance KPIs with our organization to make sure that we drive our team to give the highest level of service we can to our customers.

Bill Neumann: Excellent. John John Mathys, owner of Dental City, thanks so much. Great conversation.

John Mathys: Yeah, great talking with you.

Bill Neumann: And thanks for everything you’ve done. Dental City HQ and I’m with Joe Cavaretta, Cavaretta Consulting. He’s the founder, of course. It’s great to see you, Joe. Good seeing you too, Bill. Yeah, it’s always, I mean, I normally see you at the DSO meeting or a lot of times in passing, but it’s actually great to spend a little bit of time with you and we’re going to have a really nice conversation here. You know, I think one of the challenges that you have is that when you hear consulting, people don’t necessarily know what that means. So tell us a little bit about, you know, first off, your background. You’ve been in the industry for a while. And then also, what do you do at Caveretta Consulting? What is that consulting part?

Joe Cavaretta: Yeah, no, great. So 30 years in the industry, spent a lot of time at a large organization right in distribution. That’s kind of where I cut my teeth and I learned everything about the dental industry. At some point around 2018, you could see some of the changes that were happening in the industry and changes that were happening at my company and the culture was changing. So I figured, you know what, let’s figure out how to build something for the future, do something different. And so I went to an emerging startup company and had a good time there. So we learned the large organization and the emerging startup organizations. So in 23, some changes were happening. And I said, you know what? A lot of people in the industry need help. And that’s where the helping the dental verse comes from. And whether it was manufacturers, suppliers, and then the DSOs. So what we really saw was a sweet spot with the DSOs is that they needed help with the procurement component of it. in addition to just running their organizations, because they’re overwhelmed. There’s a lot going on. So I said, you know what? Why don’t we do a consulting company? So I named Kavita Consulting Group. Wish I wouldn’t have used my last name when I looked at it. So we call it CCD. And so what we do is we help many different companies, specifically DSOs, run their procurement, help them with equipment, help them find the right pricing. But really the sweet sauce of what we do is we actually help them drive those initiatives throughout their organization. Because they are overwhelmed, one, or they don’t have enough time, or they can’t hire enough expertise. So what you’re going to see, Bill, is that we are renaming it to fractional solutions. So CCG fractional solutions, because that’s really what we do for the different TSOs.

Bill Neumann: That’s great. And Joe, I mean, we talked to a lot of groups out there, and your name and your company’s name continues to come up. We’re working with Joe, and Joe’s doing a project with us, or it’s an ongoing relationship. So I think your experience, and Stephanie as well, and some of your other team members, because you’ve got a deep bench, people that have a lot of experience in the industry. that fractional side of things. Talk a little bit more about that because I think it’s something that I’m seeing a lot more of is where you’ve got, whether it’s an emerging group or even some of these more, what you would think are groups that are a little bit more built out, they don’t even have people that are dedicated or can dedicate enough time to certain key positions, you know, whether it’s procurement or operations. So are you seeing like that fractional side of things becoming more and more something that’s needed more in the industry?

Joe Cavaretta: Absolutely. So first of all, the team is fantastic. I’m very fortunate to work with a bunch of different people, a lot of experts in particular parts of the industry. So feel very blessed for that. Second, as far as the fractional solutions piece goes, it’s interesting, when we were growing up, right, whether in the industry, it was always W-2, and whatever company you’re working for, it was almost like the consulting component was like a nasty word, dirty word, there’d be a great presentation, PowerPoint presentation built, but then nothing would happen, right? And I have thought that way up until probably going into 2020. Then when you work at a smaller company, you realize you don’t have the resource to hire a lot of people. You need certain expertise. And it’s good to turn it on and off when you need it. So that’s where the fractional solution piece comes in. And that’s what we’ve experienced. So when we are working with the different groups, they may come in and say, you know what, we need to run an RFP, or we need help with negotiating our supplies. We’re like, hey, we can help you with that. And then as we start working with them, they said, you know what? We don’t know enough about equipment or we’re trying to build out an office. And can you help us with that? Sure. So we pulled the expertise in to help the DSO with that. Now, it’s one fixed expense. So it’s up to the DSO and they have the need for the expertise. They can push and pull which expert they want for the same fixed fee. So we’re experiencing a lot of success with that because it’s a great value for the DSO. It helps their budget. And then they’re able to pull on the expert when they need it and not have to hire 10, 20, 30 people. Right. So it makes a lot of sense.

Bill Neumann: That’s pretty interesting. I think that tell me if I’m wrong, but the industry grew pretty rapidly in 2020 after things opened back up after COVID. Money was super cheap. The practices, the groups were growing a lot by acquisition. They were buying, buying, buying. Not always buying the right practices and a lot of cases overpaying. And now, you know, there’s been a huge pullback in acquisitions and a focus on What do we buy? How do we make these practices more efficient? Can we lower cost of supplies? Can we increase organic sales? Right. We hear this organic growth, right? Same store sales.

Bill Neumann: So have you seen a lot of groups that are in a situation where they’re like, we really need help. We need to clean up this

Joe Cavaretta: some cases mess that we we bought sure sure yeah so whether it’s the groups or even the pe companies that own multiple dsos are recognizing hey um operationally from an organic standpoint we need to maybe clean a few things up um great people running the dsos but they have specific skill sets or specific expertise in certain parts of the business because mentally what they’re thinking is how are we going to grow our top line revenue with the patients. And so they’re focused on the clinical care and the patients coming in the door. So the procurement component or some of these other operational things maybe fall secondary to that and it should. So what we will do is we will come in and we will work with the just basic business principles. Everything that we’ve been doing for the last 30 years, it’s leading people, it’s leading process. And we come in, we make sure we have alignment with the executive team. We have alignment with the clinical team. Then we communicate it out throughout the organization about what we’re doing and why we’re doing it. So then when we start working with the team as a fractional solution, one, they’re not put off by us by any means. And then two, we become part of their team. So we actually help them run their organization where they have gaps and needs. So that’s working well.

Bill Neumann: Let’s talk a little bit about the importance of a distribution partner when it comes to what your role is consulting with a fractional solution. Yeah, it’s fine. Yeah, so I think that You know, it’s something that we and we’ve talked a lot about distribution on during these conversations. We’re obviously at Dental City here. They’ve invested heavily in technology and it’s pretty impressive. Yeah, it is. It is. It’s a little distracting sometimes, but a lot of fun. Talk about the when you’re. working as a fractional consultant, how does distribution factor in to your recommendations and just kind of the strategic planning that you do for your clients?

Joe Cavaretta: Yeah. So, you know, I come from distribution, so I’m a huge fan of distribution. And whether it’s full service, which still has a massive role in the DSO space, massive, to regional distribution or historically supply-only distribution, the industry can’t run without it. So that’s the first part about it. The second part about it when we’re trying to figure out who a DSO is going to choose, a lot of it comes with interviewing the DSO. So what are your your needs? What would you like to do? Do you want to stay with the incumbent? Are you open to moving? The service component is always, always the first thing that they say is, I don’t want to lose my service. So we have to make sure that whatever solution they choose, they’re still getting that level of service to keep their equipment up and running. So after you go through those questions, typically what happens is you want to have one of a major distributor so you can have the overall national coverage, depending on the size of the DSO, of course. And then you’ve been talking about procurement platforms. With the procurement platforms, it allows some flexibility of where you’re going to be ordering your products from. And I will tell you this, though, and it’s pretty cool to see, the DSOs, they want to be good partners. So whoever they’re making an agreement with, they want to, one, make the right decision on the front end and then still carry that agreement out to each of their individual offices.

Bill Neumann: Yeah, makes a lot of sense. Dental groups, maybe we’ll expand this. You work with some solo practitioners, right? You’re working with what we call emerging dental groups, which mostly are still doctor-owned and led, probably don’t have private equity backing yet, and I’m sure you’re working with some of the private equity-backed groups as well. Can you talk a little bit about some of the challenges that they’re having right now, what you’re helping them out with when it comes to procuring

Joe Cavaretta: uh product or whether it’s just something else because you don’t just handle procurement you do a lot no yeah and that’s why we rebranded it so you’re going to see the marketing going away from procurement only because listen when you do a lot of different things and and most companies in the dental industry they do multiple things but you got to focus on one thing you want to market so it’s clear at least one thing is clear what you do to the industry So I think we did that well. And then we almost started getting pigeonholed in the procurement only piece. So that’s why we’re going to the fractional solutions. Because like I said, we build de novo practices. We’re able to help with repair and service. So that’s where the fractional solution piece comes in. But when you look at the different segments of the DSOs, What I see is the smaller DSOs, a lot of it is almost like a mom and pop startup. You have the people in place that the original founder has trusted. They’re organically learning, whether it’s procurement or RCM or something in the practice. And it wasn’t what they knew or they weren’t expert hired in, but it’s who they have in the practice. You know, you’re scaling when you get to 5, 10, 15, 20, you have to start thinking about doing things differently. So a lot of the gaps that we fill there is that we help them put a plan together to scale or we are taking the procurement for them because we can run the procurement totally until they’re at a spot that they can hire a procurement team or not. People keep us on. When you’re going to the 20 to 100, a lot of similar scaling, but now it’s different because now you’re across state lines. You’re going more national. You may be interested in the PE company. You may be getting ready to recap. There’s just a lot of different factors going to play. So even though they still need that help with gaps and running their DSO, I’m great people, and they have certain expertise, but they may not have every single thing that they need to drive that initiative. So what I mean by that is, if they’re trying to get a SaaS product in there, like, let’s just call it an uptime for service or whatnot, they may not have someone on their team that understands the service and repair part of the business completely. So one, you have to understand that. And then two, once you start incorporating that into the DSO, you have to actually spend time and attention internally, right within your DSO, making sure the team understands how to use it, making sure they’re using it, measuring it. So it goes back to the business principles. So that’s how we’re helping each of the different segments in the DSO space.

Bill Neumann: Wrap up question here. This has been a great conversation. So just kind of, You’re moving from consulting to more of a fractional service. Talk a little bit about the future. What does the future look like for Cabaretta Consulting Group? Probably going to be a new name, I’m guessing, right? Yeah. And then maybe a little bit about the future of the industry you know where do you see things going we saw this incredible growth of from a consolidation perspective so we saw you know the top 50 dsos i think from 2020 to 2021 grow by like like 15 and then i think the next year from 20 21 to 22 was down to about 12%. And I think in the past year, it’s leveled off to about 4%. So we saw big growth, not so big growth, almost flat. So where does the industry go from a consolidation perspective? And then where’s the cabaret headed?

Joe Cavaretta: Yeah, so two things. I still see consolidation happening. And I think there’s a couple of factors. And I’m an economist, but the money right now is more expensive than it usually has been in the past. And just aggregating EBITDA is not the right strategy, per se, right now. So I think everybody knows this. It’s the operational efficiencies internally in the DSOs that are going to allow them to get the EBITDA level they want, to get the multiple they want, that’s going to make it attractive for someone to come in and buy them. So that’s where I’ve seen a lot of the slowdown also. So that’s why we’re doing what we’re doing is helping those efficiencies. But I see it continuing on. I don’t see it stopping. And I do think that when we started, people really didn’t know what DSOs were. It wasn’t even called, I don’t think, DSOs. It was just called group practices. And it was called special markets at one point.

Bill Neumann: Yes, it used to be the Dental Group Practice Association before it was the ADSO, and then somebody decided to coin the term DSO and it all changed. That wasn’t that long ago.

Joe Cavaretta: No, it wasn’t. So I don’t see it stopping. I think it’s going to get better. I think it’s going to evolve also, because typically with the DSOs, you had to own the EBITDA. And then, you know, you’ve had the GPO. So I look at that as too as a little bit of consolidation. And then you have, you know, the the groups that you don’t own the EBITDA but you’re running the management for those multiple groups. So I think that’s part of consolidation also. So I think that’s going to continue to grow because the individual dentists see that it’s at times it’s easier to be part of a group than it is to be separate. So that’s why I think it’s going to continue to grow. For us, Cabaret Consulting Group will still exist, right? Because we are still consulting with groups outside of the DSO space on how to structure their team. We do a lot of leadership coaching. So that still will exist. But you’re going to see CCG instead of Cabaret Consulting Group, and then CCG with the fractional solutions, because that’s really where the need is right now. And we’re seeing it across the board. So that’s how you’re going to see the changes in the future.

Bill Neumann: Yeah, and just my two cents on kind of where I think things are headed. I think you can see a lot of growth with the, what I would call the private group practice or the doctor owned, doctor led. So we’re going to, where you continue to see the drop off of solo practitioners, docs. owning the practice in a single location, you’re gonna see a lot more either banding together or, you know, owning one doctor, owning multiple practices to get some of the efficiencies and scale. And it just, it makes a lot more sense for those entrepreneurial dentists. So I think it’s an exciting time for the industry. And Joe, it’s great. It’s really nice to hang out with you here in Dental City and bring you back.

Joe Cavaretta: Yeah. Yeah. Thank you, Bill. I appreciate the time.

Bill Neumann: Yeah. Thank you. Stephanie Schoenrock, welcome. It’s great to have you here.

Stephanie Schoenrock: It’s great to be here. Thank you.

Bill Neumann: We are here in lovely Green Bay, Wisconsin. We’re at Dental Cities HQ. You made your way here from Minnesota, so it’s really nice to have you here. Tell the audience, you’re a senior consultant at Cavaretta Consulting, but a little bit about your background in the industry.

Stephanie Schoenrock: Yeah, I started in dental about 23 years ago. I’ve carried a bag, dental implants, perio products. I worked at group practice with Henry Schein in the DSO space. Led about 50 partnerships for our members at Dental Will when I was there in charge of partnerships and DSO sales. And then for the last couple of years, I’ve been doing independent consulting for DSO clients with Cabaretta.

Bill Neumann: And so you knew Joe through Henry Schein and then at Dental Whale as well. That’s where we met at Henry Schein, yes. That’s great.

Bill Neumann: So you’ve got a lot of experience. So let’s talk a little bit about, because we’ve had a lot of conversations today, but talk a little bit about utilizing a procurement platform and how it really impacts dental practices. So the DSO or the dental groups practices right at that practice level, the office managers, the staff, the day-to-day.

Stephanie Schoenrock: You know, procurement platforms can be as utilized or underutilized as the team wants them to be. I’ve seen groups simply use them on a very surface level for just placing orders. There isn’t much foundational work done on the product list of what’s offered. They’re simply moving from a manual or phone call or visit with the rep to place orders to, you know, some keystrokes on the computer. And then I’ve seen other groups and private practices alike really adopt all of the features of a platform. So they spend a lot of time working on the right SKUs for their organization, the right products and vendor partners that align with their top procedural codes, for example. And then they are very planful in the inventory levels that they want to have. So they might be using all of the modules to their maximum. And then when you add to that like a layer of frosting of the analytics and the quick access of data on the dashboards, they’re really able to introduce efficiencies that they weren’t able to before.

Bill Neumann: What is your experience with these? So you’re working in Cabaretta with a lot of group practices, right? Maybe talk a little bit about how the groups are using procurement platforms differently. Like, what are they looking for, whether it’s the analytics, whether it’s compliance, things like that. Maybe just discuss some best practices.

Stephanie Schoenrock: Yeah, that’s a great question. Every DSO is a bit different, right? They come to us with, you know, goals for their procurement, and they also come to us with very unique setups internally. There could be a procurement director with, you know, hardly hardly a team underneath, right? Or there could be a team that handles the day-to-day communications with each of the practices, but not much of a director, right? So sometimes they’re looking for some efficiencies operationally that a platform and the team can really get behind with a new software. And other times they’ve had experience with many softwares and they just haven’t found the right one. So we do a lot of Q&A and finding out what hasn’t worked, what’s working now. Oftentimes, private practices are really dialed in to a system already, and it’s hard to see how a platform might optimize that. There are groups that we’ve worked with. I can think of a six location group off the top of my head that they are so in tuned to their inventory and to their products and their vendors that moving to a platform was simply a way to centralize the information and reduce team stress and training, I would say. So the platform became a communications hub. for ordering. But everyone is still really in tune to what’s happening in the practice at each of those six locations. So they’re already doing their own analytics. They’re already meeting with their vendors quarterly, especially their large vendors. And it’s a specialty practice. And so they’re utilizing it more as a communication tool for cohesion with the practice, but not necessarily to elevate them from one way of doing things to having almost like a support team within that platform.

Bill Neumann: So I’ve never really heard a group use a procurement platform as a communications tool. Yeah. You think about it from a cost savings perspective or, you know, to really gather analytics to make better decisions. You mentioned something I think that’s pretty important is that some organizations are really dialed in where maybe a procurement platform doesn’t even necessarily make sense in some cases.

Stephanie Schoenrock: It can be a time saver on transparency of the analytics, monthly on how to measure the spend. When you think about a platform pulling together multiple vendors, if utilized well, not just a few vendors, but the direct, indirect, distributor sales, supply only distributors, et cetera, you’ve got a lot of input coming in. And unless you’re working closely with your CPA or in the general ledger and your office manager, it’s hard to see trends within that data. So, but minimum, taking a look at the dashboard analytics, what your top items were that month. Maybe you see something new that popped up that’s in your top 20 or top 10. and you’re wondering what’s happening. Maybe it’s a reflection of an initiative that’s gaining traction. And so to see those supplies show up on a top 10 list where they hadn’t historically could mean that someone’s doing a great job implementing a new technology with different supplies and that patient care, patients are being presented with that solution and that’s gaining traction. And so that’s a nice way to kind of take the temperature of an initiative as well.

Bill Neumann: You worked at Henry Schein, so you understand the distribution side of things. What is the importance of a really strong distribution partner like a dental city when it comes to that whole procurement process? Because again, sometimes we think about the software itself, but You still have to get the products from somewhere. And we talked a little bit about the huge investment that they made here at Dental City with robotics and technology in order to make sure that the customers are being met where the customers are. In other words, if they want and need product in two days, like, or next day, like most of us are accustomed to now, right, with our everyday products. Dental offices and DFOs are no different than that. But talk a little bit about, you know, when, you know, you’re at Cavaretta Consulting and you’re evaluating procurement platforms, distribution partners, other vendor partners. Talk about the importance of distribution.

Stephanie Schoenrock: Distributor partners, I would say, When they’re truly partners, those discussions sound different. It isn’t about, is this here in two days? It isn’t necessarily frustration with delivery times. It is more so, does my distributor understand my business? And I think the most important foundational work that you can do before adopting a procurement platform is sitting down with your top distributor partner and getting their ideas because What we’re trying to do is consolidate inventory, whether that’s as a total SKUs used by the practice or number of SKUs offered per a product category like gloves or infection control categories. And when you sit down with your distributor partner and just roll up your sleeves and ask them for their best ideas to help you achieve that in categories where you might hit a roadblock or simply just aren’t as familiar with the products, I’m not strong in understanding ortho products, so for me to sit down with a supplier or distributor and ask them a little bit more, how can I spend better in this category? Where am I duplicating my efforts? And get their ideas about their private label lines, for example. vendors that they have a lot of success with, with group practices. They’ll also share with you, you know, different loyalty programs that they’re aware of that they can enroll the client in. And so really having a business discussion with the distributor is where that extra juice comes from, the squeeze.

Bill Neumann: Supply chain challenges. You talk a little bit about maybe what some of your customers experience and then also how distribution partner and also procurement platform can kind of help alleviate some of those challenges. What are you seeing? What are you hearing about?

Stephanie Schoenrock: You know, operationally, a platform can help practices pivot much more quickly and make decisions based on their own data. So what I mean by that is they can quickly, at their fingertips, figure out the quantities that they’ve ordered from whether it’s a specific product or, again, within a category. They can see if something’s on backorder. That’s a real easy example, right, for private practices or groups. If you’ve got a formulary in place or a list of preferred products identified in your search results, and all of a sudden something key is on backorder, and this is where my comment about communication comes in, if everyone sits down at 50 different practices and sees that their product is on backorder, and then sees an alternative with a note that says this is temporarily replacing a different SKU, It’s communicated to all 50 buyers at the same time without everyone kind of ordering willy-nilly what they’re thinking the doctors, the clinic, the patients might need. So it streamlines those decisions, makes the decision-making quicker because someone on the back end had to identify that product, put it in as a secondary formulary item or an alternative, associate it with the main item. This is detailed, but it has some thought behind it. And then when all the buyers log in, they can see the thought behind that process. And so being able to pivot quickly is important. You know, coming out, I heard earlier, Jordan mentioned the pandemic, right? Everyone learned a lesson there and people are much more open to having relationships with a secondary distributor, a new supplier, for example. And so they might not purchase something direct normally, but if they have high volumes or, like, again, there’s a backorder, they can quickly toggle from one item to another, and they can also measure the financial impact that that decision will have. So if they move from a $10, a $5 box of gloves to a $10 box of gloves, and they’re going to do that for about three months, they can forecast what that will mean from a cash flow perspective for the owner.

Bill Neumann: I think backorders are just so common in the industry. And, you know, it’s not the distribution partner. In most cases, it’s the manufacturer that has the backorder. And, you know, so there’s the importance of a good distribution partner is that they’ve got good communication with the manufacturing partners.

Bill Neumann: But to your point, it’s very common, whether there are Whether there’s a pandemic, whether there’s tariffs. I mean, just in general, back orders happen. So then you add in these other things that we don’t necessarily expect. And it is great to have alternatives like that. But you have to think through that process to have that backup. And then look at what that impact might have if you’re paying 25% or 50% more for a substitute until that product is back in stock.

Stephanie Schoenrock: That’s right. And you can have those lists already in the system, and you can work on them slowly over time. So when there is an emergency, when there is something that changes, you can quickly reference the work you’ve done in the past.

Bill Neumann: We talked about supply chain challenges and how really a procurement platform and a good distribution partner can help alleviate a lot of the challenges. Let’s talk about some other benefits. I know with a lot of the bigger groups, compliance is certainly, you know, it can be an issue. It can be an issue at the practice level because sometimes they want to use what they want to use. And other times, you know, and then the DSO is like, well, no, but this is on formulary. So let’s talk about some of the challenges.

Stephanie Schoenrock: Yeah, I’d say, yeah, a nice opportunity. And you mentioned, you know, people want to buy what they want to buy, they want to use what they want to use. And that freedom is perfectly acceptable to some groups and others, not so much. It always comes with a cost. because you might be making your clinicians very happy, but to what expense? And that’s typically more is spent on products that would likely not make it onto a formulary or that many varieties or renditions of that product wouldn’t be on the formulary. So you might not have eight colors or 12 flavors. Maybe another group might have three colors and four flavors, right? So every color and flavor and iteration of a product that you stock ties up cash flow on the shelf. So when you start to look, and we’re in this warehouse with just cases and cases of product, and you take a look at how much each case costs, And if we were in a dental practice and this was the inventory, right? And some of them aren’t too far off from this. It’s all this cash is tied up. And if you are stocking a lot of varieties of the same product, you’re overindulging in duplication. I might be happy that I have certain products or a scented grape glove that I love. And you might be happy you’re wearing a really, you know, Comfortable black nitrile glove or something and we’re different but why should my glove be $35 and your glove be 10, right? So I think a challenge is is finding a nice balance with the group owners and the operators, understanding where they’re willing to be flexible, understanding the level of flexibility that they want to allow, right? And usually when I say that, I mean kind of disposables and infection control and things that end up not in the patient’s mouth, but in the garbage, you know, when the patient leaves. And so, So a benefit becomes compliance at the practice level for adherence to whatever that strategy is for the group.

Bill Neumann: Stephanie Schoenrock of Caveretta Consulting. Thank you for joining us here in Green Bay at Dental City.

Stephanie Schoenrock: Yeah, thank you for having me, Bill. It’s great to be here.

Bill Neumann: I have with me Brandon McCarty. He is the founder of Curement. Brandon, it’s great to see you again. Great to be here. It’s been fun. For the audience that may not know who you are, founder of Curement, you recently exited the company. So talk a little bit about your background, Curement, and what you’re up to now.

Brandon McCarty: Yeah, so my background started in the dental space about 2017. Idea for Curemet came up. We were working with some manufacturers and we started realizing kind of the challenges they were having with groups and they were trying to solve the problem themselves and we realized there was a room for technology. So that’s where the idea of Curemet came. We were one of the first procurement systems built for dentistry. And so we went to market in 2017-ish. And then, as you mentioned, we recently exited CureMint to another procurement software who purchased us. And now what I’m doing is I’m trying to figure out what’s next, working with other dental and startup companies, just kind of helping advise on the future of their businesses.

Bill Neumann: Excellent. Why does procurement matter and specifically in the dental industry? You chose the dental industry, right? So what did you see in the industry maybe that was lacking and why does a procurement platform make sense?

Brandon McCarty: The fact that procurement wasn’t a big thing when we started CureMint blew my mind. If you look at a practice or a dental organization, it’s critical that they have supplies to serve the patient. And so they’re ordering things constantly, daily, weekly, on some sort of cadence. And the fact that some of the organizations did not have a system that they controlled or that they own, that made sure that they were ordering these items was fascinating to me. And so that’s kind of the idea of Curement was, they need to have something like that. You look at other industries with businesses that have a lot of turnover and supply ordering, they all have procurement systems, and the dentistry didn’t have it. So I’d say that the big reason that happened is most of what you serve a patient comes with supplies, right? Whether it’s gloves, any sort of items, and if you don’t have a procurement system, you’re basically fully dependent upon a distributor or any sort of distributors, and therefore you’ve kind of lost control of your business and your supply chain.

Bill Neumann: Let’s talk a little bit about the problems that a procurement platform solves for. Yeah.

Brandon McCarty: The easy answer I’d say here is really it’s controlling visibility. And so talk about control first. So if you do not have a procurement system in place, the question is how do you actually place orders? Right? And so you lose control because now every practice or every individual will now place their own order. So they either do it by phone, text messages, fax machines. They might log on to an e-commerce portal. And when they do that, as a dental organization, you’re going to lose all visibility into what they’re ordering. And what happens is you become a reactive business. So they order whatever items that they want. And because you don’t have a procurement system that has any sort of visibility to that, It’s now going to arrive at the practice. Now you’re stuck with a bill, an invoice, and then you pay it. A procurement software, what that does is it flips that to being proactive. What it allows you to do is before a practice orders something, you can first control what do they see, making sure that they’re buying the most quality products and not whatever the cheapest product is of the day. And then you can actually approve them. And then you have analytics around where are we buying most of our stuff to basically create more strategic around your procurement process.

Bill Neumann: So our audience, we’ve a lot of different people, a lot of different positions, a lot of different sizes of organizations. So what would a CFO or somebody in operations or maybe even a clinician that owns multiple locations, what should they look for when they evaluate a procurement platform?

Brandon McCarty: Yeah, so I think before you get into the procurement, any sort of purchase, right? You want to first evaluate what are you trying to accomplish, right? What is the goal of the business? Is this something where I want to put something in where I’m just going to make ordering faster, easier. All right. Or are there financial metrics or objectives that you have in place? And I know when we used to, you know, do demos of QMAT, the conversations we would always ask would be like, what are your objectives? And often it was just make it easier for the practices. That was the primary get your foot in the door goal. I think if you’re doing that, what you would really want, if that’s your goal, is a place where you can order from as many vendors as you want in one place. If you’re looking for integrations, how many integrations do you have? I think it’s important to dive into what type of integrations. There are a lot of different ways to send data back and forth from a procurement software. to a supplier and some of them are far better than others on that part. But I would also say when you’re looking at a procurement software, I think it’s really important to identify that if it’s strictly you’re trying to make ordering easier. I’d actually think procurement software is probably the easiest thing for that. Because if you think about it, you’re intercepting or you’re interjecting a software in the middle of your relationship with your suppliers. And so if it’s just about making things easier, on the surface it sounds easier. You got one place, all your stuff’s in there. But you got all these integrations and backorders and having to send things back and all that stuff does add a little complexity. So what you really want to make sure when you do a procurement software is… There’s a financial goal that you have in place because that’s where the procurement software comes into play is that it actually does save you money, but you have to have a strategy of what you’re trying to do there with the software. And if that’s the case, you’re looking for anything that’s tied to your financials, um, analytics, uh, ERP integrations, things like that are really important when you’re looking at a procurement software. If it’s more about a financial return than just making things easier to order.

Bill Neumann: I think that’s a really important point. If your goal is to make things easier, procurement platform may not be the solution. Your distribution partner may already have a solution for you that you’re already using or is easier than bringing in, like you said, another software. But if you’ve got other goals in mind, like compliance or from a financial perspective, then a procurement platform may make sense. Let’s talk about, this actually ties in really well, we’re at Dental City. What role do suppliers and distributors like Dental City play in shaping a successful procurement strategy?

Brandon McCarty: I think they’re really important. I think what I’ve seen is that when people buy a procurement software, they’ll typically look at it as kind of trying to create this marketplace concept, right? Or I have a variety of different options, I’m going to find the best price. And that’s not a procurement strategy. That’s a marketplace, right? And you’re just getting the, we call them micro decisions. You’re having your purchasing assistant do these micro decisions on what they order at any given point. For an overall strategy, you need to have a sourcing plan. So who are you buying from? What are the items you’re buying from? And a distributor, a distributor or two distributors are critical in making that decision. If you have to make sure they have the stuff that you are going to order, that it gets arrived at the practice at the right time. Because when you drive your purchasing power towards a group of items, right? You’re going to decrease costs, but you also have limited some of your options of how things, you got to really make sure that the supplier is going to get you the stuff that you need. They also need to understand your technical goals, right? So if you have a procurement software, they need to be, want to be a part of that and not necessarily try to disrupt that. One of the things we often went across as Curement evolved was we first started Curement, most, a lot of the suppliers, thought of us as like the enemy, right? We were in the way of the relationship and they wanted nothing to do with it. They wouldn’t do integrations. They wouldn’t do any of that. I think as the industry has evolved, the suppliers are beginning to realize that. And some are better than others where they’re actually embracing the fact that if you work closely with the procurement software, it’s in the best interest of the distributor and the DSO versus trying to create as much friction as possible in that relationship.

Bill Neumann: That actually leads into the next question about friction. So you’ve worked really with, it’s kind of, your perspective is really valuable because you’re working with distribution partners, you’re working with the manufacturers, and then you’re also working with the operators, the people running the DSO or the clinicians themselves. So let’s talk a little bit about the friction, is there is friction there. And so where is the most friction and then where are some opportunities?

Brandon McCarty: Let’s talk about a dental organization first. I think there’s actually a couple different points of honestly friction, but contrasting goals, I would say. So first you have the corporate headquarters or the DSO part, right? And then you have the practice. So the practice typically it’s autonomous. They have their own culture, their own thing that they do at the practice. And then the DSO is trying to control costs, simplify purchasing, and the dirty word here is, right, like, a lot of them won’t want you to say this, but they’re trying to control what you can buy at a better price. Like, that’s what the DSO is doing, and there’s this conflict at the practice where they want autonomy, they want to do whatever they want to do. So that’s what I think most people are familiar with, is that idea. The other side that I’ve noticed is that there is a friction within the DSO itself between the procurement and operations and the finance teams. And there’s this gap of like operations and procurements over here and they do their thing. And then the finances over here and they do their thing, right? Like we’ll pay the bills and you order stuff. And what we found is when we were rolling out Curement with a lot of organizations was that marriage was critical in them accomplishing any of their financial goals. Because at the end of the day, procurement, the way you measure it is through finances. And so if you don’t understand how things are being coded in your general ledger, right, the net terms and the payment process of payments, that’s going to completely affect getting shut off by a supplier because you’re not paying them or whatever’s going on. And so there has to be a part here where the procurement team needs to be more familiar with finance and finance needs to be more familiar with the operations of the business.

Bill Neumann: So as we wrap up this conversation, I really appreciate this. It’s great insight. Let’s talk about the future of procurement solutions, and this may be what your next big thing is, right, as you kind of look at the future of procurement solutions. Can you give us a little insight as to where you see, whether it’s procurement solutions or distributors like Dental City, what will the next two or three years look like?

Brandon McCarty: The first thing is, we all know, AI, artificial intelligence. I think we see a lot of that on the revenue side, helping with treatments and things like that on the AI side. I think there is a huge opportunity in the automation of redundant tasks such as ordering. I don’t see any reason why in the next couple of years that 80 to 90% of all ordering is automated through AI and that you do not have to have a staff purchase anything. If you think about that, that is a really important piece because you remove the human element out of these decisions. And really, if you look on a spreadsheet of a procurement strategy, it’s about you’re purchasing a certain amount of items, certain specific items at a certain volume based off of procedures. And there really is no thought involved. It’s just math. So if you can have an AI system that knows the math and just does that, I think that removes a lot of the burden on the staff. which then turns into the staff can now be more patient facing and more of the experience that generates revenue. And I think that’s really where the next step here is about AI and implementing it not only ordering side, but on your financial side. So when you’re ordering things, making sure things are automatically coded properly, payments are done on time. AI has a really big play in a lot of the mundane tasks that happen in the procurement and AP process.

Bill Neumann: I knew we weren’t going to get through this interview without AI being mentioned. We almost got through it. But I think that makes a lot of sense. And I think the other thing, AI could free up the staff to actually form better partnerships with Dental City and manufacturer partners. So I think there is an opportunity for AI to do some of the mundane tasks, but also, like you said, things that really the human shouldn’t be involved in. No emotion involved in it, right? It’s just the numbers. It’s the math. Well, great. Well, thank you, Brandon. Great conversation. Appreciate it. Brandon McCarty, founder of Curement.

Brandon McCarty: Absolutely. Thank you.

Bill Neumann: So for this interview, we have with us Jordan Lorenz. He is the VP of sales and marketing for Dental City. Great to have you here, Jordan. Thanks, Bill. Awesome to have you here.

Jordan Lorenz: Yeah, this is great.

Bill Neumann: You’re always here. I only get a chance to be here every couple of years, it seems. And the last time I was here, there were no robots. It didn’t look anything like this. So congratulations.

Jordan Lorenz: Thank you. Well, I can’t take any of that credit. I mean, I think the team here, the owners to make the investment, the team that had to adapt to this, you know, you go from working with no robots, right? So all of a sudden the next day, there’s 21 of them here. And so, yeah, the team has adapted. It’s really a lesson in change management and making the right investments. Pretty neat. I’m glad you’re here to see it.

Bill Neumann: Yeah, it is a lot of fun to kind of see the activity. to see how they robots interact with people and how they don’t bump into each other and they actually you know do a lot of work yes yes pretty fascinating so i think in recent years we talked a little bit about this off camera customers expectations have really changed i mean the industry’s really changed quite a bit and uh A lot of consolidation, technology, COVID, and some of the HR issues that have happened with dental assistants and office managers. A lot going on in the industry that’s impacted your customers. How has Dental City really adapted to the changing customer needs?

Jordan Lorenz: Yeah, I think, Bill, there’s a couple of things. One is consumerism, first of all, has changed. So when you look at our role and what we play for a dental practice, it’s we provide them their supplies. That should be easy. It should be seamless. It should be predictable. And I think when you really take a look at that being our role, that’s where the investment that we just talked about here comes into play. And consumerism as a whole has changed. So you look at how we buy our goods. We don’t go to a mall really anymore. I had that conversation with our sales team not long ago. I said, Christmas time, how many of you went to the mall to purchase your gifts? Not a single person raised their hands. But I think that type of consumer shopping experience has now carried over into how we buy from a business perspective, and especially, I think, how dental practice is purchased. Because dental practices, whether it’s a private practice, a mid-market type of practice, or even your larger DSOs, they’re looking for that similar type of experience. Whether that’s through technology or a conversation on a phone, they want that consumer-like experience. Our role is to make sure practices get their goods on time and it’s the right stuff. We’ve got to deliver that every time. That starts at how the order is placed. That could be with one of our great sales team members. But it also takes an investment in technology. And I’m not talking about this type of technology. the technology that will integrate out to a really nice website, out to a procurement platform that we’ve talked about already today. It’s making sure that that type of transaction is seamless. So at the end of the day, the practice gets what they’re expecting. So I think our role has adapted from being 100% on the phones to making the right investments in our internal technology, whether that’s our website, whether it’s the way customers interact with us over email or phone, but also especially having the right infrastructure to adapt to the change in the procurement platforms. We have to be able to connect and work seamlessly with those, because at times that’s what the consumer wants. And that’s our goal. We’ve got to meet them where they want to be met. And that’s where our investment goes.

Bill Neumann: And I think that’s a great point. And when we talk about technology, you’re not just talking about robots, you’re talking about your website. So when people, is it easy to order? Is it pleasing to the eye? I mean, Dental City does a great job when it comes to the marketing and the colors and it’s just a, it’s pleasant. It’s what people, like you talked about, consumerism. You want it to be easy, you want it to be pleasant, whether it’s website interaction, whether it’s the person on the phone, whether it’s the API and the connection to the procurement platform. So you want efficiency, you want a pleasant experience, and these are all things that I think take for granted uh as as consumers like as when we buy things but sometimes it doesn’t always translate b to b and so you’re trying to make that b to c feeling in a B2B environment.

Jordan Lorenz: Yeah, very much so. Again, as a consumer, you’re going and purchasing, whether it’s your groceries, you might go and buy them online now, right? You’re going to go pick them up. And so instead of having that true shopping experience, you’re looking to do things almost more on your own. But that experience has to be seamless. It has to be easy. Otherwise, people won’t do it. I think the other thing is, really quick, you know, we still track how many fax orders we get. So it doesn’t have to be using some form of technology that’s recent. It doesn’t have to be a text. We have people that order through Snapchat with us. Like they’ll Snapchat their orders. It really is about what does the end user want their experience to be? So if that end user’s experience is I’m gonna handwrite my order and fax it in, like we have to be ready to handle that too. So from those API connections to a fax machine, you gotta be ready to take it all.

Bill Neumann: And Snapchat. And Snapchat, yeah. That’s pretty diverse. Meet the customers where they are. That’s right. Yeah. Great point. You’ve also taken a different path than a lot of distributors when it comes to partnerships. And it’s something that I’ve noticed the past couple of years where you as an organization have really tried to offer technology solutions, maybe their membership plans, financing solutions, just a lot of things that maybe dental practices and dental groups don’t necessarily think of when they think of a distribution partner. Why did you feel it was so necessary to form those strategic partnerships? I think, first of all, there’s a lot going on in the dental practice.

Jordan Lorenz: And supplies is one small portion of that. And the supply part needs to be easy. So some of these other things that are important to the practice, whether that’s collecting, or if it’s some sort of alternative insurance plan, right, you got to have some of those things available. For us, it became about providing these solutions to the customer, but not being the one that has to own this solution or even be an expert in it, right? We truly think like our expertise has to be supply chain. We have to be good at technology. We have to be good at understanding what a dental product does when our customer needs to know more about that. So that’s where our emphasis has been and needs to be. And that’s where the partnerships come in. So you work with somebody like a curve dental, for example, Curve, one of the leading cloud-based practice management solutions in the industry, a fantastic partnership there. And they can come in, be the expert in practice management, and make sure that that goes really well for your practice when you need it. You work with somebody like PlanForward, who just keeps growing and expanding. It’s been fantastic to watch, you know, Jane and the team really, you know, take all that world on as an insurance alternative. And You pick the right people, like-minded people, and it’s really easy to make those recommendations to our practices, because they’re going to be really well taken care of. So our focus, again, just it has to be on this. It has to be on supply chain. And finding the right partner to take on the rest of it is important. Our practices are looking for solutions. And it doesn’t need to be completed by us, but it’s always nice to have something that we can recommend and something that we’ve worked with and vetted and bring that to the table.

Bill Neumann: So you have a real variety of customers. You have the traditional solo practitioner, doctor owns the practice. They may have one location. You may have several doctors owning multiple sites, right? Private group practice. some emerging groups where they’re scaling up. You mentioned one of the larger groups that you work with that is adding several practices, it seems, every month now. And you’re able to meet their needs as they scale up. And I think a lot of that is due to your investment in technology. But can you talk a little bit about maybe what these different solo practitioners, the emerging groups and some of the larger groups, What are the needs vary there? Can you discuss a little bit and how you’re adapting to really meet their needs?

Jordan Lorenz: Yeah, sure. So first, to your point about you have these practices that are growing, and they’re adding a couple of practices every month. So you add that to the list of growing customers that we work with, 20,000 of them across the country, and we’re adding new practices every month. And so the one thing I just want to point out about that is, You have to have an unreal purchasing team that, in order for this stuff to even get picked and shipped, you have to be able to predict what needs to be bought, what’s going to be purchased, what do we need to stock up on, what do we need to make sure that we have for when one of these emerging groups is able to add another location, or we just add in a lot more new solo practices into the business. It’s not just, you know, what are the robots doing, but what is the technology you put in purchasing to make sure that you can service all these different needs that you’re talking about from a wide range of customers.

Bill Neumann: And back to the first point is that we are now as consumers expecting to get our product in two days or in some cases next step.

Jordan Lorenz: Right.

Bill Neumann: They better be here.

Jordan Lorenz: That’s right. Yeah. So it goes all the way back to that. But I think, you know, every practice is looking for something a little bit different, a little bit unique. You know, I think It was like my first DSO conference probably seven, eight years ago. And it might even have been you. I don’t know who said it, but someone said, you know one DSO, you know one DSO. And I think that that can also be said about a solo practice. You’re working with one practice and there’s specific needs. They might have a specific customer base. You know, they choose a different set of products to work with that customer base and you have to be prepared to handle that. And the same thing goes for, you work with one DSO and their needs are unique, whether they are using a procurement platform or whether they’re working with us over the phone or through dentalcity.com. So each one, has a little bit unique of a take on exactly what they’re expecting out of their distributor. Some people want us more involved. Some people want us to kind of sit on that periphery and just be the ones that are providing them the products. And we’re ready to do any of those things.

Bill Neumann: And I may have said it, but I stole it from, if it was me, I borrowed it from Dr. Mark Cooper, who started the Mastery Company. And so he was the one that said, if you’ve seen one DSO, you’ve seen one DSO. And it really is true. I mean, they may have the same number of locations, but they all operate very, very differently. Very few that look identical.

Jordan Lorenz: Yes.

Bill Neumann: So again, you’ve got to meet that customer where they are, whether they have 10 locations and do things this way or have 10 locations and do something totally different.

Jordan Lorenz: And some of them might lean on a distributor, you know, more for, you know, almost the consulting or the practice analysis pieces. And some of them are going to have like a true consulting group that they work with. And that’s going to be where the practice analysis comes from. And so every one of them, you know, has this different angle that they want to take. And that’s great. And we’re willing to, you know, work with any one of those.

Bill Neumann: We talked a lot about procurement platforms. We had Brandon on. He focused on that. In your experience, does every practice or does every dental group need a procurement platform? No.

Jordan Lorenz: You don’t have to have one, right? Again, it comes back to your needs at your practice or at your group. It also comes back to, at your moment in time, what is your team capable of handling? You really have to look internally and say, You know, I have a set of people that, you know, they can handle you setting up and running with the procurement platform because a lot of the work that goes into that is done behind the scenes. If you want to get the most out of your procurement solution, it’s a lot of work that takes place beforehand and then the results from that afterwards can be great if you use it the right way, right? But that’s not a necessity for everybody. You could be a 20 practice DSO that’s using multiple websites to place orders, or you could be using spreadsheets that you’re taking a picture of and texting into your salesperson. I think it really depends on that practice, their needs, and really their team. What is their team ready for? And you’ve got to do an evaluation on that.

Bill Neumann: And we did a survey last year, maybe not quite a year ago. And it was procurement survey. And one of the questions was, are you using a procurement platform? And I think we had 53 DSOs somewhere right around there. And about 55% said they were. So that’s 45% that aren’t currently using. Some were evaluating a platform, but there were a lot that were not evaluating a platform and weren’t currently using water. So I think… It depends on what your goals are, right? And certainly not necessarily easier.

Jordan Lorenz: No, it’s not necessarily easier. I think, again, the behind-the-scenes work that has to go on. Number one, you have to make sure that you pick the right procurement solution. But Some of the practices that you get out of trying to implement a procurement solution, like setting up your budget, setting up potentially a formulary, making sure that you’re narrowing down and consolidating your SKUs. These are things that my opinion is, is that if you’re going to go through that practice, a procurement platform really helps you take that to the next level, which is like the compliance piece of it. you know, you can actually put that in place and allow your team to execute on what you, the plan that you put in place. It’s harder to do that when you kind of, you know, if you just say, okay, we’re going to do all of this planning, we’re going to put a formulary in place now. Okay, team go execute on it, but there’s, there’s not necessarily that infrastructure around it. So you’re going to automatically fall back into the bad habits. So again, it depends what you’re trying to accomplish. The practices that you go through in order to set one up might be great for everybody, but what are you really trying to get out of it?

Bill Neumann: Great point. Wrap up question here. Dental City continues to grow, you continue to innovate, and it’s great to just see all the cool activity here. I say that every one of these interviews. It’s fun to be on the floor here to see all this happen. Why do you think you continue to grow while, I mean, it’s not a secret, a lot of distributors, both large and small, have really been struggling the past couple of years.

Jordan Lorenz: Sure, so, you know, I can’t really speak to how any other distributor is doing or not doing, but number one, I think, and this isn’t certainly the number one point, but I’m going to guess John may have already talked about it, but there’s a culture of winning here. I mean, right this way is a racquetball court. Behind me is a basketball court and out that way is a full court basketball court. So we got people in the organization that run a hundred mile races for fun. So there’s just like this innate, like built in competitive nature that I think comes being part of this organization. And, you know, I think number one or part of it is like, We just want to win and we enjoy winning together. Now, granted, we had a little draft contest because the draft was here in Green Bay. I happened to win that. I just want to make sure that we get that out there so it lives forever. John can watch that clip whenever he needs to. So like that culture of winning is just built in and it’s fun to be a part of that and it’s fun to come to work when you’re winning. It’s fun to come to work when you get to do stuff like this, right? You put in the robots and you make them go. Those plans too, like that long-term planning, the infrastructure that you have now built that when the next thing comes at you, whether it’s a pandemic or whether it’s tariffs, right? You have this infrastructure that’s built, that’s ready to kind of handle what comes next. And so in order to have this infrastructure, though, you have to execute on a plan. So it’s not just that you built this, it’s that you created a plan, you executed on the plan, you implemented the plan. So I think when you look at where does our success come from, a lot of it is competitive nature, and a bunch of it is being very planful and working that plan over and over and over.

Bill Neumann: And the execution.

Jordan Lorenz: Yeah. I think there’s a lot that goes into that, but we’re well set up. I mean, when you listen to John talk, Dave, our other owner, and Roy, the way that they’ve built this business from nothing to what it is today, and you have them intimately involved every single day in everything that’s going on, there’s this passion that comes from that, that kind of bleeds into everybody else, and it’s really great to be a part of that.

Bill Neumann: Thank you. Jordan Lorenz, Vice President of Sales and Marketing for Dental City. Thank you. Thanks, Bill. Appreciate it.

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