What's the Best Lab Strategy: In-House, Centralized or Wholesale?

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Mid-size regional optical retailers can control costs and quality with in-house labs or centralized labs that serve multiple locations. Or they can reduce the headaches and upfront investments by outsourcing to one or more wholesale optical labs. Whichever strategy they choose, the following optical retailers explain their reasons for choosing how they process finished eyeglasses for their patients: Alan Ulsifer, OD, CEO and president, FYidoctors; Gordon A. Bishop, FNAO, ABOC, RO, CEO and president, Sunland Optical; Joe Madore, president, 947-EYES; John D. Marvin, president, Texas State Optical; Robert J. Platt, director of product operations, Opticare Eye Health & Vision Centers, Inc.; Mark Johnson, director of optical services, Virginia Eye Institute; David H. Hettler, OD, Drs. May & Hettler; and Judd Sky, president/CEO, Partners in Vision Inc.

 

Gordon A. Bishop, FNAO, ABOC, RO, CEO and president, Sunland Optical, El Paso, Texas

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? Sunland Optical processes our jobs through a combination of facilities. Our own full-service, centralized lab does in excess of 95 percent of all jobs and 100 percent of our anti-reflective requirements from all our locations. However, in some of our larger Vision Centers, we also have in-house edging capabilities to handle our customers' one-hour, single-vision requirements. In addition, we use Augen and Hoya wholesale labs to process our progressive free-form needs.
 
What is your business strategy behind processing eyeglasses this way? Since we work within the military retail environment, our contracts require us to meet certain time deadlines for delivery of completed eyewear product back to our patients. In addition, our contracts restrict us in our retail pricing, so we have to be self-sufficient and control our manufacturing costs. By doing 95 percent of our work in our full surface laboratory in El Paso, Texas, we can control and monitor all quality issues, manufacturing and shipping costs, inventory levels and delivery times. Vertical integration is imperative in our business model.
 
Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why?
Yes, we are electronically pulling our jobs more frequently from our stores throughout the day now. This was done for a multitude of reasons such as further decreasing our delivery times and ensuring that our lab has a continuous supply of work throughout the day as to not interrupt the manufacturing process. This also in turn helps facilitate that our anti-reflective work gets into and out of our AR department faster as we can do full runs in the machine for specific coatings. Our average delivery time for all completed products of any kind is 2.5 days

 

Alan Ulsifer, OD, CEO and president, FYidoctors, Alberta, Canada

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? We are committed to digital surfacing and, in fact, we do not have a single conventional generator in our central lab. We do commit to single vision inventory and edgers in the majority of our locations in order to provide fast service where there is an opportunity.  

What is your business strategy behind processing eyeglasses this way? We try to differentiate our company based on medical and lens technology. Digital technology has proven value to the patient, and that is what defines our commitment to a central lab. It is true that "on the block" technology can offer this, but to date the level of coating quality has not been at the level we want to see. Should this evolve, we would begin to create in-house surfacing and coating labs in key locations

Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why? Our company has undergone a complete system conversion over the last two years. We are now able to do electronic ordering in our clinics and have built a central frame trace catalog. This allows us to initiate a job immediately on receipt of the order and still generate fully compensated jobs. This has resulted in faster delivery times and greater operational efficiency.

 

Joe Madore, president, 947-EYES, Oklahoma City, Okla.

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? We use a centralized, in-house lab to service all four offices. The busier offices also have finish labs to do single vision.

What is your business strategy behind processing eyeglasses this way? Cost control, quality and turnaround time are the reasons we chose to do our own lens processing.

Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why? We added an in-house anti-reflective coating system to shorten turnaround time and to be able to do mirror coats. It's increased our sales of premium anti-reflective and mirror by 63 percent. We also added free-form equipment to help control costs and provide the latest technology to our patients.

Editor's note: Joe Madore's 947-EYES' use of Augen's EasyForm Digital Free Form Processing System was profiled in the Oct. 2, 2013 edition of dba: "To Take Control of Its Lens Costs, 947-EYES Invested in In-House Digital Processing."

 

John D. Marvin, president, Texas State Optical, Houston

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? Since the doctors of Texas State Optical are member owners of a cooperative of over 125 independently owned private optometry practices, each member processes their patients' eyewear in the manner that is best for their circumstance.

We have a network agreement with a national wholesale optical lab company to provide our members with a significant cost of goods advantage and a full scope of services including stock and finished lenses. In addition, many of our members have their own in-house finishing labs where they can provide same day, quality finishing services.

What is your business strategy behind processing eyeglasses this way? We have learned that what is most important to our patients is that they have confidence in the expertise of the office associates to provide them with high quality, premium lens products that are competitively priced and delivered in a timely manner. Our patients do not demand one hour or even same day delivery of products. They place their trust in our associates to make sure they receive the lens products best for them.

Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why? We have not changed our process for the delivery of finished lenses to our patients. This is truly the "blocking and tackling" of our profession. We are committed to providing our patients with quality lens products, accurately produced for maximum acuity, priced competitively and delivered on time. We have found that this simple approach is practiced by so few private and retail optical dispensaries that by focusing on these basics and consistently delivering them with exceptional service we stand out as different. We benefit by creating advocates for our practices who are enthusiastic about referring us to their friends and family members.

 

Robert J. Platt, director of product operations, Opticare Eye Health & Vision Centers, Inc., Waterbury, Conn.

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? Here at OptiCare Eye Health & Vision Centers, an 18-office practice in Connecticut, we process the majority of our patient's eyewear through our own centralized lab. Our lab can quickly and efficiently process orders from surfacing to finishing in order to provide our patients the highest level of service and quality.

What is your business strategy behind processing eyeglasses this way? As we began expanding, nearly 35 years ago, we quickly determined that a centralized lab was the best strategy for us to pursue as an organization. Focusing on patient satisfaction was the primary driver of this strategy, but we also quickly came to determine that it also allowed for better cost and quality controls.

Communication between our centralized lab, our distribution center and our offices is designed to allow staff to work closely together and to promptly make any needed changes and or specialties to any job at a moment's notice. Each office can also easily and independently check "real time" status on each job processed centrally with the click of a button.

The cost savings associated with a centralized lab allow for strict cost and quality controls. Furthermore, it allows for better communication with our vendors. With one centralized lab, we as a retailer are able to adapt quickly to any manufacturing upgrades, new product introductions or technological advances.

Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why? We are constantly evaluating our procedures to look for better efficiencies and improved results. Recently, some of those evaluations revolve around the potential addition of "digital" lenses. As an organization we understand the need to remain at the forefront of advances in the industry. Simply put, our centralized lab allows OptiCare to operate in the most efficient, profitable and patient-focused manner possible.

 

Mark Johnson, director of optical services, Virginia Eye Institute, Richmond, Va.

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? Virginia Eye Institute utilizes all three methods at our site. Generally for 85 percent of our non-vision-plan eyeglasses we utilize our centralized finishing lab. When we have high volume in our finishing lab we will utilize our wholesale lab for both surfacing and finishing. We do have edgers in our main location, which is next door to our surgery center. Having an edger there allows us to edge temp plano lenses for patients after cataract surgery.
 
What is your business strategy behind processing eyeglasses this way? Our centralized finishing lab also serves as our optical distribution center. This allows us to have more control of quality with the finishing and also a substantial savings in shipping costs with the distribution center. Having the service of providing temp lenses for patients after cataract surgery is a nice competitive advantage and a great way to promote our optical services.

Have you made any changes recently to your procedure for processing eyeglasses, and if so, what changes and why? We have been utilizing this procedure for the last five years. We are constantly looking at ways to improve and have tweaked or tried out some changes over the last few years. We would make these minor changes in efforts to increase turnaround times, improve quality or to decrease expenses. With so many changes in healthcare and with more and more patients having vision plans it is important for everyone to be adaptable to changes and become as efficient as possible.

 

David H. Hettler, OD, Drs. May & Hettler, Alexandria, Va.

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? We have invested in technology to reduce manpower and increase accuracy by causing optical sales to go directly to our processing lab. The Rx comes directly from the doctor into the optical sale and then on to the lab without having to re-enter it. The same process happens from the sale and then directly to the lab. Transposing, transcribing errors are reduced with the delivery time also being reduced. The tremendously high cost of these systems is more than worth the investment in a busy office.

 

Judd Sky, president/CEO, Partners in Vision Inc., Linden, N.J.

What is your procedure for processing your patients' eyeglasses—in-house labs, centralized lab, wholesale lab or some other system? We use a central lab for our offices. We keep a matching back stock of frames at our lab which enables us to turn work around quickly instead of sending frames back and forth from the office to the lab. Our feeling is doing our work out of one central lab keeps a better handle for us on quality control and turnaround time.

 

 

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