LensCrafters 2007 Annual Report Download - page 44

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Healthy demand for eyewear in international markets in 2007 led the Group to maintain its policy of
operating two production centers. Italy and China are the two countries in which Luxottica Group’s
production facilities are concentrated.
Having its origins in northeast Italy, the world’s largest center for eyewear manufacturing, Luxottica
Group has produced prescription frames and sunglasses for over 40 years, controlling every phase
of the production process, from raw materials procurement to manufacturing of finished frames. Its
manufacturing process is the product of decades of careful honing, along a path of constant
research and development. The drive to achieve maximum efficiency and improve quality was kept
up throughout 2007.
In 2007, investments in manufacturing, from materials and machinery to design and programming,
totaled Euro 70 million approximately, reflecting the Group’s purpose to keep its manufacturing
platform one of the most efficient, flexible and creative in the industry.
In 2007, the Group focused on the following priorities:
•increasing industrial output;
•re-organization and rationalization of manufacturing;
•R&D;
•reduction of procurement costs;
•quality; and
•anti-counterfeiting.
INCREASING INDUSTRIAL OUTPUT
Growing demand in 2007 led the Group to step up last year’s already high levels of capacity. The
Italian plants turned out 1.25 million pieces more than in 2006. This increase in production entailed
the hiring of around 1,120 people directly by Luxottica S.r.l.
At the same time, extensions were made to facilities at Agordo and Rovereto (not completed yet),
new production lines were installed and the new paint shop at Pederobba was enlarged.
The Italian plants continued to focus on luxury brands and premium products in general, leaving the
Group’s Chinese facilities to produce other brands.
Increasing output also involved the ongoing process of renewing the entire system of supply
forecasting and production planning and monitoring. Programming at Agordo was converted to
weekly (as already the case at Pederobba and Sedico), as this can drastically reduce forecasting
errors and thereby lowers warehouse obsolescence rates.
Output was also increased as a result of a reduction in lost working hours, partly due to the
numerous initiatives to raise awareness of the problem of absenteeism amongst employees.
Events were also organized in a number of plants for employees’ families, with very positive
reactions from the trade unions.
Despite these efforts, the Group still needed to take on temporary labor to cover production peaks
in 2007. An agreement with the trade unions also made it possible to introduce “flexible days” in
order to scale working days to actual production requirements (agreement dated December 22,
2006 renewing Luxottica’s supplementary contract until 2009).
MANUFACTURING