BUSINESS: Suppliers A New Service Model for Delivering Frames and Lenses By Andrew Karp and Marge Axelrad Monday, July 9, 2018 12:00 AM Vision Monday’s Marge Axelrad and Andrew Karp recently toured Luxottica’s newly expanded distribution center and prescription lab in Atlanta. Read their exclusive report to find out what they learned and saw. MCDONOUGH, Ga.—When Luxottica set out to build a new U.S. service center here in 2016, and expand upon its existing retail distribution center which was established here some 20 years before, its goal was to create the most efficient way to process orders from retail and wholesale customers for Ray-Ban, Oakley and other top selling frame and sunglass brands. To accomplish this, the company designed a new service model in which both frames and lenses are assembled and distributed from one location. The culmination of that strategy is the new, 700,000-square foot facility from which Luxottica now services retail, wholesale, e-commerce and managed vision care customers. The high tech, multichannel facility, which began operations last year, features a full service prescription lab that can produce between 55,000 and 60,000 Rx jobs a week, and can be expanded for additional capacity, if needed. Located on the sprawling Luxottica campus in the suburb of McDonough, it is adjacent to Luxottica’s 225,000 square foot North American distribution center that ships frames and sunwear to Luxottica Retail customers and handles after-sales functions. (Luxottica’s original Atlanta facility opened in 1996 and consolidated several North American facilities into a single state-of-the-art distribution center here, close to Hartsfield-Jackson Atlanta International Airport.) The expansion in McDonough was envisioned to create more than 1,000 jobs in Henry County. Taken together, today the two facilities comprise Luxottica’s Atlanta Service Center (ASC), which serves as the North American headquarters for Luxottica’s planning, logistics, distribution and manufacturing. It is Luxottica’s largest campus outside of Italy and China, and the first of its kind in the U.S. (The company also operates a warehouse in Dallas and a prescription lab in Columbus, Ohio.) “This is probably one of the top three campuses of Luxottica worldwide, in terms of investment,” said Fabrizio Uguzzoni, president, Luxottica Wholesale, noting that the company spent more than $100 million to design and build the ASC. The campus, which employs 1,955 workers, represents the latest element of Luxottica’s global logistics plan that has been unfolding for the past decade, he explained. The ASC features sophisticated stock picking systems that can sort through as many as 10 million SKUs, combine them into large or small orders, marry them with corresponding prescription lens jobs and ship them to accounts throughout the country. The new multichannel facility, which is crisscrossed with conveyor systems, also handles orders for Oakley apparel, footwear and accessories. Between eyewear and non-eyewear products, the ASC ships between 800,000 to 1,000,000 pieces a week, accounting for about half of all of Luxottica’s global shipments, according to Luxottica executives. Orders are processed according to the type of customer and the number of pieces requested. Big orders for wholesale customers consisting of 40 pieces or more are handled in one part of the distribution facility, which processes between 80,000 and 130,000 such orders each week. Small orders from online customers and rush jobs, often consisting of just a single frame, are handled in a separate area. These orders account for 70,000 to 110,000 pieces per week, according to Luxottica. “Often, an optician or optometrist asks for one single frame, either on the phone or through Luxottica.com,” said Uguzzoni. “From the moment they place an order to the moment they receive it, we give a priority for very fast service. It’s typically two days.” Customers who order 20 pieces or more must go through their Luxottica sales rep, with delivery taking four to five days, he added. In terms of Ray-Ban’s new Ray-Ban Rx business, which officially kicked off last summer, the new facility and its Rx lab has been a boon. Said Uguzzoni, “The investment we’ve made in Atlanta comes at a time when there is a higher demand than ever for quality, personalization and speed. Ray-Ban Prescription lenses are setting a new standard in those three areas. Since we launched a year ago, more than 20 percent of our customers have started selling the complete branded pair and over 500,000 consumers across North America are wearing them. It’s a very encouraging start.” Oakley’s Rx work is also now processed through this lab, which, overall, has yet to reach its maximum capacity. The ASC also processes between 200,000 and 250,000 export orders each week. “We collect all production from North America and then ship master boxes from here,” said Massimo Sapone, Luxottica’s senior vice president of planning and logistics for North America. “We don’t only pick and ship, we customize the shipments.” Moving from a largely manual operation to one that is highly automated has increased capacity by 150 percent, noted Sapone, who drew on his experience running Luxottica’s service centers in Brazil and Europe to supervise the design and construction of the Atlanta Service Center. “We use Lean Principles and Six Sigma,” he explained, referring to the widely used management techniques for continuous improvement and error reduction. These methods are used to good effect at Luxottica Rx Operations. The full service lab, which is pending ISO 9001 certification, features highly automated Rx lens processing and state-of-the-art ophthalmic inspection technology, explained Nick Mileti, senior director business development and ophthalmic technical support and Lee Prosser, director of quality and manager of the day-to-day lab operation. The ASC now services the scope of the company’s North American businesses, processing work for EyeMed, Luxottica Lab Services, Ray-Ban, Oakley, Glasses.com, Lens-Crafters, Oliver Peoples, Pearle, Sears and Target as well as wholesale accounts. VM’s Andrew Karp and Marge Axelrad recently toured Luxottica’s ASC. The accompanying photos offer an exclusive glimpse inside the massive distribution and manufacturing center.