LensCrafters 2010 Annual Report Download - page 17

|15 >OPERATIONS
MANUFACTURING
Luxottica’s manufacturing system has two main platforms: Italy and China. Alongside these, the Foothill Ranch facility
in California (US) manufactures high performance sunglasses, prescription frames and lenses and assembles most of
Oakley’s eyewear products, while Oakley’s second manufacturing center in Dayton, Nevada (US), produces the frames
used in its X Metal® (a proprietary alloy) eyewear products. Lastly, there is a small plant in India, serving the local market.
Luxottica has six manufacturing facilities in Italy: five in the northeastern area, the area in which most of the country’s
optical industry is based, and one near Turin. All of these facilities are highly automated, which has made it possible to
maintain a high level of production without significant capital outlay.
Over the years, the Group has consolidated its manufacturing processes by concentrating a specific production technology
in each of the Italian facilities. This consolidation has enabled Luxottica to improve both the productivity and quality of
manufacturing operations.
Plastic frames are made in the Agordo, Sedico, Pederobba and Lauriano facilities, while metal frames are produced in
Agordo and Rovereto. Certain metal frame parts are produced in the Cencenighe plant. The Lauriano facility also makes
crystal and polycarbonate lenses for sunglasses.
The Dongguan plants, in China’s Guangdong province, make both plastic and metal frames.
In 2010, our manufacturing facilities produced a combined total of approximately 56.6 million prescription frames and
sunglasses, approximately 45 percent of the frames manufactured by Luxottica were metal-based, and the remaining
were plastic.
The manufacturing process for both metal and plastic frames begins with the fabrication of precision tooling and molds
based on prototypes developed by in-house designers and engineers. The Group seeks to use its manufacturing capacity
to reduce the lead time for product development and thereby adapt quickly to market trends and contain production
costs, as well as maintain smaller and more efficient production runs, so as to better respond to the varying needs of
different markets.
The manufacturing process for metal frames has approximately 70 phases, beginning with the production of basic
components such as rims, temples and bridges, which are produced through a molding process. These components are
then welded together to form frames over numerous stages of detailed assembly work. Once assembled, the metal frames
are treated with various coatings to improve their resistance and finish, and then prepared for lens fitting and packaging.
Plastic frames are manufactured using either a milling process or injection molding. In the milling process, a computer-
controlled machine carves frames from coloured plastic sheets. This process produces rims, 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.
Luxottica engages in research and development activities relating to its manufacturing processes on an on-going basis. As
a result of such activities, Luxottica has invested and will continue to invest in automation and in innovative technologies,
thus increasing efficiency while improving quality.
With the vertical integration of the production system, a virtuous cycle starts: the entire control of production leads to the
creation of new technologies through research which leads to greater efficiencies and revenues. The company grows and
this boosts investments and research.
Luxottica utilizes third-party manufacturers to produce Oakley apparel, footwear, watches, electronically-enable eyewear
and certain googles.
OPERATIONS