the big "E"

[dfisher]

I just read the big news about the big "E" corporate awards thing giving congrats out to their great performers. I'll bet that my local big "E" lab was not one of them.

There has been a lot of discusion lately about trivex. I recently ordered two separate pair of single vision trivex with A/R in a drill mount (before I got my new Smart Drill). One was delivered 3 1/2 weeks later, the other arrived today, a mere month and 3 days after the order.

How is your big "E" lab doing in your area.

(not to mention names or anything)

[JRS]

The awards were for the independent wholesalers that distribute Varilux products - not awarded to the "Big E" owned facilities.

[Chris Ryser]

dfisher said:
I just read the big news about the big "E" corporate awards thing giving congrats out to their great performers. I'll bet that my local big "E" lab was not one of them.


(not to mention names or anything)

Any corporate awards given to anybody is nothing else than business politics and advertising and should be ignored by the retailers.

Remember it is usually always the one that buys the most, .....is the best customer, ...................or the one the corporation wants to become a best customer, gets awards.


:finger:

[hcjilson]

Chris,
I respectfully disagree with your post. Many of us have friends in the industry at all levels. I read through the list to see if I could find any friends.....I daresay thats why most people read the blurb. I didn't feel it was an advertisement, and even if it was, whats wrong with a company giving public recognition to outstanding performers?

harry j

[Pete Hanlin]

I just read the big news about the big "E" corporate awards thing giving congrats out to their great performers. I'll bet that my local big "E" lab was not one of them.
There has been a lot of discusion lately about trivex. I recently ordered two separate pair of single vision trivex with A/R in a drill mount (before I got my new Smart Drill). One was delivered 3 1/2 weeks later, the other arrived today, a mere month and 3 days after the order.
How is your big "E" lab doing in your area.
Without a doubt, Essilor Labs of America faced some tremendous challenges in 2002. For starters, the entire chain of 72 labs executed a change in the software systems that control their ordering and surfacing processes. This process is now complete and will facilitate internet orders and will eventually allow greater connectivity between labs and accounts.

As JRS stated, the awards are given out to top independent performers. After all, the vast majority of Varilux & Essilor products are sold through independent distributors. Therefore, it isn't surprising that Essilor would want to recognize those who are doing well with the products and customer service to their accounts.

For anyone that has missed the obvious trend in the ophthalmic lab industry, labs are becoming increasingly aligned with the major manufacturers (in 2002, Sola joined Essilor and Hoya as a lab owning manufacturer). Those that aren't purchased outright are forming "partnerships" with one manufacturer or another. This is the environment in which labs operate in most of the world. By working with their suppliers, both independent AND manufacturer owned labs can provide better and higher quality service to their eye care provider accounts.

I'm unsure how the Trivex comments were related to the lab awards, but I would only comment that Trivex is not an Essilor product.

PS- BTW, while I'm naturally biased, the "Big E" lab in my area (Milroy Optical in Tampa) is doing pretty well!

[Optical Plumber]

Not strictly on topic, but here goes ...

Essilor is doing something that has been tried unsuccessfully in the past by two former giants in the Optical Industry, Imperial Optical from Canada, and American Optical based in Southbridge, MA.

Both of these companies formerly had significant market share in the lab business as well as being a major manufacturer of lens blanks. Both of these companies 'imploded' under their on weight and were helped along the way by far more nimble independent labs. Imperial actually went bankrupt over 10 years ago, and AO is no longer a major presence in the streetwear Lab business.

It remains to be seen whether Essilor, as a large corporate entity can make it work in the long term. Local service is a big part of the product mix that labs provide to their clients and IMHO, there will always be a market for the nimble and efficient independent wholesale lab.

Terry
:)

[Jeff Trail]

Terry,

You hit the button on some of it and a little off on some of it :-) ..B&L did it, and in fact did it to "well" and the Government split them up because they were a monopoly :-) ...The big difference between these guys you mentioned and Essilor is that Essilor has some good product backing the lab acquisitions, also being the biggest lens producer in the world never hurt :-) Plus equipment.
They have gobbled up some of the biggest network labs and now they are going to have to start to restructure and delete some of these over lapping area's (which they have started doing already) and when you look at the difference between number 1 and 2 lab network...I think it was like the number 2 did around $23 million compared to ELOA did $412 million ..that is a BIG gap...that is not $41.2 BUT $412!!
As for room for the small guys? ..depends on your definition of "small" ... you get any lab doing under 150 to 200 jobs a day your going to feel the heat... All of the lens companies have started making buying major volume a big part of the discounting and really taking it serious and the prices in wholesale are actually going backwards.. I know that my lens have raised around 6% in the last two years and to stay on the edge my wholesale prices have had to been DROPPED 5% across the board in that time period
I doubt labs my size will be around in a few years.. if you are NOT making a living why put up with the headaches? Just getting "by" is not worth it, as in one that has owned a wholesale lab and ran one will tell you, it is frustrating and VERY stressful and I think I earn every penny I put in my pocket (plus interest)
I'm afraid the guys that will pay the ultimate price is the small retailer. Now you have all us medium to small labs cutting prices left and right to get work and the retailers are making it harder and harder but once you have pushed us to nonprofit you get stuck having to deal with the super labs :-)
Come back in 10 years and you are going to see a VAST change to the landscape of wholesale.. oh you are right that some local small labs will be around with a core customer base dealing with things they need fast but most will be a thing of the past, I afraid to say, we guys have been getting squeezed out further each year by the lens companies big advertising budgets pushing lens and lens treatments that are NOT available to everyone (wholesale) and it gets bigger every year..and if you think we could survive doing SV and FT's and Tri's it's not going to happen, about the only thing we make money on is premium stuff and we give away the SV and FT's at about cost..
They ever bring down the cost of casting in-house and make the ranges wider and you might even see a lot of these mega labs feeling the heat :-) We are in a fast changing high tech world.. and I'm afraid I'm the dinosaur...

Jeff "just waiting for the meteorite to hit" trail

[Traci]

We small retailers have a bottom line to watch too! I would much prefer to use a smaller independent lab, but frequently the turn around time is too long on specialty lenses (slabs, Varilux, and Zeiss products - and we all know why!) and the prices are not only higher, but as much as 48% higher in some instances than the larger labs.

It is just not fair that the large and small labs are not on the same play ground for prices - Volume Discounts! Sounds just like Wal-Mart in disguise!

If you have any solutions, I would be the first to go on board.

[Pete Hanlin]

What we're seeing in the ophthalmic lens industry is nothing new. When automobiles began to appear in the early years of the 20th century, there were all kinds of relatively small shops manufacturing cars. Today, we have Ford, GM, and Diamler-Chrysler, etc.- all producing autos much more efficiently and affordably than the small shops ever could.

I don't think the ophthalmic lens business is in any danger of being monopolized by "The Big E." There will always be choices. However, in another 7-15 years the choices will probably be between Essilor, Hoya, and some other manufacturer labs (not that there will be no independent labs, but those that are will be aligned with a manufacturer). Ultimately, this will be a good thing for the "small independent retailer."

Also, it isn't just the manufacturers who are driving the changes in the ophthalmic laboratory business. Consider the types and cost of surfacing equipment currently available! You can easily plop several $100,000s into a generator (a generator which will crank out over 100 lenses an hour without a human operator). Unless you have the scale to support such a beast, you can't afford to get into that kind of equipment. Once you have that kind of equipment, you can produce higher quality work at lower prices.

The alignments are also being brought about by eye care practitioners. You want to order Varilux, Hoya, Sola, Rodenstock, etc. PALs, but how is the small lab supposed to stock all those products (assuming they could get all the manufacturers to sell to them in small quantities)? As an ECP, you choose a PAL design you prefer to fit and find a lab that produces that lens.

I'm reminded of Danny DeVito in Other People's Money. You don't have to like change- but you do have to move with it! I, for one, think the coming changes in the ophthalmic lab market is going to be good for labs, ECPs, and ultimately patients.

[Traci]

Pete,

With progress comes change. It is a matter of adaptation - the strongest survive! Basic Biology applied to real life. Good point.

[LENNY]

What do you think about on-cite Labs?
Medium to high volume retail stores having their own small highly computerised (that even monkey can operate) lab.

I mean something simular to the newest paternless edgers that my receptionist used to cut the lenses while i was out.

[Chris Ryser]

Pete Hanlin said:

I don't think the ophthalmic lens business is in any danger of being monopolized by "The Big E." There will always be choices. However, in another 7-15 years the choices will probably be between Essilor, Hoya, and some other manufacturer labs (not that there will be no independent labs, but those that are will be aligned with a manufacturer). Ultimately, this will be a good thing for the "small independent retailer."

What about the vertical integration down the road.................... ?

= Total dominance and takeover of the retail market.

Any independent optician's or optometrists hair should stand up straight just by thinking about it.

Retailers will all be employees of ESSILOR and HOYA in 10-20 years and can form the UNITED OPTICIANS UNION and negotiate employement contracts.

[Jeff Trail]

LENNY said:
What do you think about on-cite Labs?
Medium to high volume retail stores having their own small highly computerised (that even monkey can operate) lab.

I mean something simular to the newest paternless edgers that my receptionist used to cut the lenses while i was out.

Lenny,

In-house labs are NOT as cheap to run as people may think.. and it sure involves a lot more than a "monkey" :-) .. besides the equipment you have to figure in your stock (basic to get you covered, around $20,000) ..you have to decide if you are going to run what material..if you want poly than you HAVE to get an in-house backside coater as well .. all this equipment needs to have a strict maintenance schedule or you start to have a lot of problems, if you do start having problems you need someone who understands the problems and how and where to fix them..
You also need to sit down and figure out your prices before ordering and what type of volume and what price column you would be in at the lens company level.. and now most of the lens companies are requiring a 25 pair minimum..so you need to figure out which companies you get product from..and shift things around so you do not have to order from 3 or 4 companies and pay SHIPPING.. at $5 to $7.50 at each one every day..
IF you are not doing around (at a minimum) 40 to 50 jobs a day than it is not really going to save you money over getting uncut and edging inhouse..and if your "monkey" has a breakage rate of more than 3% you are really going to be hurting :-) No banana bonus..
Most people think they could save money doing it in-house, but it depends on you materials, your designs and volume, even your rent..

Jeff "sometimes it sounds better than it is" Trail

[Jeff Trail]

LENNY said:
What do you think about on-cite Labs?
Medium to high volume retail stores having their own small highly computerised (that even monkey can operate) lab.

I mean something simular to the newest paternless edgers that my receptionist used to cut the lenses while i was out.

Lenny,

In-house labs are NOT as cheap to run as people may think.. and it sure involves a lot more than a "monkey" :-) .. besides the equipment you have to figure in your stock (basic to get you covered, around $20,000) ..you have to decide if you are going to run what material..if you want poly than you HAVE to get an in-house backside coater as well .. all this equipment needs to have a strict maintenance schedule or you start to have a lot of problems, if you do start having problems you need someone who understands the problems and how and where to fix them..
You also need to sit down and figure out your prices before ordering and what type of volume and what price column you would be in at the lens company level.. and now most of the lens companies are requiring a 25 pair minimum..so you need to figure out which companies you get product from..and shift things around so you do not have to order from 3 or 4 companies and pay SHIPPING.. at $5 to $7.50 at each one every day..
IF you are not doing around (at a minimum) 40 to 50 jobs a day than it is not really going to save you money over getting uncut and edging inhouse..and if your "monkey" has a breakage rate of more than 3% you are really going to be hurting :-) No banana bonus..
Most people think they could save money doing it in-house, but it depends on you materials, your designs and volume, even your rent..

Jeff "sometimes it sounds better than it is" Trail

[Pete Hanlin]

What do you think about on-site Labs? Medium to high volume retail stores having their own small highly computerised (that even monkey can operate) lab. I mean something simular to the newest paternless edgers that my receptionist used to cut the lenses while I was out.
In my opinion, FedEx (and their competitors) marks the death knell for the small in-store lab. Let's say you sell a pair of lenses that require surfacing at 3pm on a Tuesday. Assuming you submit the order to your lab in a timely manner (perhaps you even enter it electronically through something like VisionWeb), you can very possibly have that order back by 10am the following day.

There is an "optical village" in Columbus, OH, that is currently housing the distribution centers for Essilor, Rodenstock, and several other lens manufacturers. Why Columbus? Its a major hub for one of the express delivery services. The point being that we live in an ever smaller world. A full service, state-of-the-art lab can get lenses to you (especially if they have ARC or other special properties) in a time frame that negates the justification of spending money on the in-store lab.

Also, unless the in-store lab has unusually high production numbers (over 100-200 pairs a day), it will not be economically feasible to invest in the kind of automated equipment that can provide a "closed-box" lab (one where you put the blanks on the belt at the beginning and take a completed lens out at the end).

The answer some equipment manufacturers are offering for the in-store lab is lens casting. However, with the number of designs and materials out there, the problem is always going to be the limits casting places on product range and availability. Casting will eventually probably find a home in the wholesale lab.

What about the vertical integration down the road?
= Total dominance and takeover of the retail market.
Any independent optician's or optometrists hair should stand up straight just by thinking about it. Retailers will all be employees of ESSILOR and HOYA in 10-20 years and can form the UNITED OPTICIANS UNION and negotiate employement contracts.
If anyone is in a position to completely vertically integrate, it is Lenscrafters/Luxottica, not a lens manufacturer. Just for kicks, let's assume LC/Lux purchases Sola tomorrow morning. You would have a company that could use lenses it produces, fitted to frames it manufactures, sold in locations it owns. Even given this example, I fail to see the threat. LC/Lux/Sola would sell certain products at certain locations just as they do now and would have to compete against other companies creating products and selling services- just as they do now. Its called free enterprise and it has a way of working in cycles. Just as WalMart is obliterating K-Mart, some new concept in "superstores" will emerge someday to rain on WalMart's parade... everything changes always! BTW, LC/Lux works with several frame and lens manufacturers and represents a great avenue through which to sell all sorts of ophthalmic products.

Besides, it seems to me that anyone wanting to vertically integrate in the ophthalmic goods market would want to first establish the retail sales division and then acquire the manufacturing capabilities. With all due respect, the notion of Essilor purchasing a chain of retail locations is rather unlikely. After all, our number one brand- Varilux- is predicated on the independent practitioner.

[Jeff Trail]

Some good points Pete'ster..I don't see Essilor moving towards the retail side either, the loss to gain margin is not to bright, BUT where I think they might move and make a bigger impact is something a long the lines of a "VSP" type plan..
Another thing that would stop Essilor from moving into the retail ever is it would come very close to being a monopoly .. in fact Essilor WANTS to make sure they have other labs and places to gobble up the lens market (lens supply) to keep this from happening..
BTW Pete I was "over qualified" for the thing we talked about ..getting that a lot

Jeff "stop blubbering about Essilor and make it your own way" Trail

[Chris Ryser]

Some good points Pete'ster..I don't see Essilor moving towards the retail side either, the loss to gain margin is not to bright, BUT where I think they might move and make a bigger impact is something a long the lines of a "VSP" type plan..
Another thing that would stop Essilor from moving into the retail ever is it would come very close to being a monopoly .. in fact Essilor WANTS to make sure they have other labs and places to gobble up the lens market (lens supply) to keep this from happening..
BTW Pete I was "over qualified" for the thing we talked about ..getting that a lot

Jeff "stop blubbering about Essilor and make it your own way" Trail

What a thread ..........................


15 years old and full of discussions of what is coming..................

...........and now it did,

some good history conserved on OptiBoard ........................

[Chris Ryser]

Posted by Pete Hanlin on 01-16-2003, 10:36, close to 16 years ago.

What about the vertical integration down the road?
= Total dominance and takeover of the retail market.
Any independent optician's or optometrists hair should stand up straight just by thinking about it. Retailers will all be employees of ESSILOR and HOYA in 10-20 years and can form the UNITED OPTICIANS UNION and negotiate employment contracts.

If anyone is in a position to completely vertically integrate, it is Lenscrafters/Luxottica, not a lens manufacturer. Just for kicks, let's assume LC/Lux purchases Sola tomorrow morning.

You would have a company that could use lenses it produces, fitted to frames it manufactures, sold in locations it owns. Even given this example, I fail to see the threat. LC/Lux/Sola would sell certain products at certain locations just as they do now and would have to compete against other companies creating products and selling services- just as they do now.

Its called free enterprise and it has a way of working in cycles. Just as WalMart is obliterating K-Mart, some new concept in "superstores" will emerge someday to rain on WalMart's parade... everything changes always! BTW, LC/Lux works with several frame and lens manufacturers and represents a great avenue through which to sell all sorts of ophthalmic products.

Besides, it seems to me that anyone wanting to vertically integrate in the ophthalmic goods market would want to first establish the retail sales division and then acquire the manufacturing capabilities. With all due respect, the notion of Essilor purchasing a chain of retail locations is rather unlikely.

After all, our number one brand- Varilux- is predicated on the independent practitioner.

It was an interesting prediction of close to 16 years ago.

............all the details are slowly coming to light

[Chris Ryser]

What about the vertical integration down the road?

= Total dominance and takeover of the retail market.

Any independent optician's or optometrists hair should stand up straight just by thinking about it. Retailers will all be employees of ESSILOR and HOYA in 10-20 years and can form the UNITED OPTICIANS UNION and negotiate employment contracts.

........................and in 2018 it was nearly a fact