LensCrafters 2012 Annual Report Download - page 34

32 ANNUAL REVIEW 2012
introduces new requirements. As a result of the effectiveness of the quality control program,
the return rate for defective merchandise manufactured by Luxottica has remained stable
at approximately 1% in 2012.
The Group’s distribution system is globally integrated and supplied by a centralized
manufacturing programming platform. The network linking the logistics and sales centers
to the production facilities in Italy, China, the United States and Brazil also provides
daily monitoring of global sales performance and inventory levels so that manufacturing
resources can be programmed and warehouse stocks re-allocated to meet local market
demand. This integrated system serves both the retail and wholesale businesses and is
one of the most efficient and advanced logistics system in the industry with 20 distribution
centers worldwide, of which 12 are in the Americas, six are in the Asia-Pacific region and
two are in the rest of the world.
There are four main distribution centers (hubs) in strategic locations serving the major
markets: Sedico (Italy), Atlanta (US), Ontario (US) and Dongguan (China). 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 is state-of-the-art in the sector. In 2012, it
managed over 19,400 orders per day, including eyeglasses and spare parts. Sedico ships
over 187,000 units daily to customers in Europe, North America, the Middle East, Africa
and to the Group’s distribution centers in the rest of the world, from which they are then
shipped to local customers. The Sedico hub enabled Luxottica to close local warehouses
throughout Europe that served the previous distribution system, improving the speed and
efficiency of distribution.
The Atlanta facility, opened in 1996, has consolidated several North America-based facilities
into a single state-of-the-art distribution center located close to one of the major airport
hubs of the United States. This facility has a highly advanced cross-belt sorting system that
can move up to 150,000 units per day. In late 2009, the facility, which was originally a retail-
only distribution center, started serving both Luxottica’s retail and wholesale businesses in
the North American market.
The Dongguan hub was opened in 2006 and manages an average of 170,000 units per day.
The growth in the region has resulted in this hub becoming a strategic part of the Group’s
distribution network. Luxottica continues to invest in ways to improve services and increase
capacity in order to create even greater efficiencies in the region.
In 2009, the information system SAP (Systems, Applications and Products in Data
Processing) was implemented in the Sedico logistics hub. In 2010, it was utilized in the
operations of the Dongguan logistics hub. The SAP global implementation continued
and was implemented throughout 2012 in the Chinese operations at the Tristar facility
and at the Atlanta and Ontario distribution centers, thus providing further support to
manufacturing management, enhanced inventory control, network optimization and order
management process.
LOGISTICS