LensCrafters 2008 Annual Report Download - page 17

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OPERATIONS |15 <
temples and bridges that are then assembled, finished and packaged. In the injection molding process,
plastic resins are liquefied and injected into molds. The plastic parts are then assembled, coated, finished
and packaged.
The California facility produces high performance sunglasses and prescription frames and lenses. The
equipment used is specially designed and adapted for Oakley’s manufacturing processes. This makes it
possible to respond quickly to customer demand, offer protection against piracy and adhere to strict
quality-control standards. Throughout the development process, Oakley optics products undergo
extensive testing against standards established specifically for eyewear by ANSI and ASTM. These
standards relate to product safety and performance and provide quantitative measures of optical quality -
UV protection, light transmission and impact resistance. Oakley also performs a broad range of durability
and mechanical integrity tests on its lens coatings, involving extremes of exposure to UV light, heat,
condensation and humidity.
LOGISTICS
The Group’s distribution system is globally integrated and fed by a centralized manufacturing
programming structure. The network linking the logistics and sales centers to the production facilities in
Italy and China also provides daily monitoring of global sales performance and inventory levels so that
manufacturing resources can be programmed and warehouse stocks promptly re-allocated to meet local
market demand.
This integrated system serves both the retail and wholesale businesses and is based on one of the most
efficient and advanced logistics organizations in the industry, with 23 distribution centers worldwide.
There are three main distribution centers (hubs) in strategic locations serving the major markets: Sedico in
Europe, Atlanta in the Americas and Dongguan in the Asia-Pacific region. They operate as centralized
facilities, offering customers a highly automated order management system that reduces delivery times
and keeps stock levels low.
The Sedico Hub was opened in 2001 and updated with a new automated system in 2006. It currently
manages over 22,000 orders a day, including eyeglasses and spare parts. Everyday, Sedico sends out over
150,000 units coming from the manufacturing plants and going, on one hand, direct to Europe, Middle
East and Africa customers and, on the other, to the Group’s distribution centers in the rest of the world,
from which they are then shipped to local customers.
The Sedico Hub is the result of a strategic project that enabled the closure of the local warehouses
throughout Europe that characterized the previous distribution system. Cutting out the intermediate stage
that those warehouses represented required major investments but it was decisive in improving the speed
and efficiency of Luxottica’s distribution, as well as eliminating the overheads and increasing working
capital typical of unnecessarily decentralized organizations.
The Atlanta Hub is the pride of Luxotica’s retail logistics operation. Located in the main logistics area of
America, this hub has a highly advanced cross-belt sorting system that can move up to 140,000 pieces a
day at a conveyor belt speed of 1.5 meters a second.
Of the Group’s 23 logistics centers, seven were acquired with Oakley, whose distribution system is currently
being integrated with Luxottica’s. In North America, the Oakley brand’s most important market in terms of
volumes, products are distributed through the Ontario distribution center located in California.