TAKING A CLOSER LOOK AT MARKET TRENDS FOR LABS

By Christie Walker

By Christie Walker

If you haven’t already done so, check out the overall 2014 economic forecast in LabTalk. This is a general business climate outlook for the year. But there are also trends that hit a bit closer to home. These trends will impact your lab today, throughout 2014 and in the years to come.

VALUE ADDED OPTIONS GAINING STRENGTH   “ADD-ON SALES” GAIN STEAM

After a slowdown in AR growth in 2009 and 2010, AR is starting to show signs of increasing across the board. According to Satisloh, they have seen an increase in labs purchasing AR equipment to keep up with the new demand.

“In 2012, we installed double our budget of 1200 chambers in the U.S. and the 2013 numbers have been well ahead of 2012,” explained Larry Clarke, president, Satisloh, North America, during their summer Slugfest event. “Micro AR is also booming. Satisloh has sold several hundred SP-200 sputter coaters in the past 18 months.”

Other value-added and second pair lens opportunities are also showing signs of growth especially prescription sun, polarized lenses and 100 percent digital lenses. The ability to process complex edging jobs has also created new revenue and profit streams for labs equipped to meet the demand.

What This Means for Labs

Optical labs that have invested in AR equipment should see their numbers in AR continue to increase, provided they continue the education process with their customer base. Same holds true for digital surfacing, polarized and specialty edging jobs. Let your customers know your capabilities and then tell them again.

DIGITAL SURFACING CONTINUES TO GROW   AND EXPANDS TO SMALL LABS

Once the domain of larger commercial labs, prices and footprints of digital surfacing equipment have continued to come down, making the processing of digital lenses within reach of most labs.

Digital is catching on with numerous retail chains globally who are now selling 100 percent digital PAL’s. For labs in Canada, over 75 percent of their processing is digital PALs. Because the cost of purchasing digital surfacing equipment is at or below the cost of purchasing conventional surfacing equipment, smaller retail labs are now investing in digital surfacing as well. As digital surfacing continues to grow and small retail labs continue to embrace the technology, it becomes harder and harder for optical labs to ignore this trend. According to Clarke, “Conventional surfacing equipment sales is now less than two percent of our business.”

What this Means for Labs

If you are not currently able to process digitally surfaced lenses in house, you need to be and soon. This is no longer a trend but the wave of the future. Ride the wave or be prepared to flounder. Taking it one step further, labs that have the ability to process digital lenses are venturing into branding their own designs, skipping the lens companies completely. As labs struggle to compete with lens manufacturer-owned labs, watch this emerging trend closely.

NEW FOCUS ON   TOTAL COST OF   OWNERSHIP

New equipment and process technologies are allowing labs to produce higher quality products at higher yields and lower costs. Labs looking to invest are looking at the Total Cost of Ownership of their new equipment–the true cost per lens over a five year period–including consumable costs, improved up time, more throughput per machine and lower cost of service for new equipment.

“Total cost of ownership is a more comprehensive way to look at technology. TCO typically involves a five to seven year look at depreciation, service and parts costs, labor costs and consumables costs and then determining cost per unit produced based on throughput and uptime,” said Clarke.

What this Means for Labs

When considering whether or not to invest in new equipment or technology, looking at the bigger picture can change the results. Equipment companies can provide labs with not only the price of the machine, but the other costs such as consumables and maintenance packages that can impact the ROI and your decision to buy now or later.

SUSTAINABILITY/GREEN PRACTICES GAIN IMPORTANCE

The Vision Council’s Sustainability Committee has created an outlet for sharing ideas for environmental improvements, efficiencies and cost savings at thevisioncouncil.org. The Sustainability Committee began as a task force reporting jointly to the Lens Division and the Lens Processing Technology Division five years ago in an effort to help members look for opportunities to reduce waste and increase energy efficiency while improving service to the end customer, stated The Vision Council.

Today, the group has grown to include 30 members of The Vision Council, representing various facets of the industry, including equipment manufacturers, lens manufacturers, raw materials manufacturers, wholesale labs and large retailers. Labs can find best “green” practices posted online with recent discussion topics including water conservation, parts recycling, motion sensors, lens box recycling and swarf recycling. For more information contact Michael Vitale, The Vision Council’s Lens Division Liaison, at mvitale@thevisioncouncil.org or check out the Sustainability Committee at http://www.thevisioncouncil.org.

What this Means for Labs

As part of The Vision Council’s Lab Division, labs have access to the Sustainability Committee information online. Other areas of interest for labs include alloy alternatives for blocking, new energy efficiencies for their labs, and water and swarf recovery and recycle programs. Being green soon will stop being a trend and will be how you do business. If labs don’t get onboard, the day will come when regulations will take options away, legislating the way you must do business.

For example, on October 1, 2013 California implemented a law whereby companies that manufacture certain consumer products may have to review whether they can make those products safer by using different, less toxic or nontoxic ingredients. Starting in April 2014, California – through its California Safer Consumer Products Law, also known as the Green Chemistry Initiative – will be identifying classes of consumer products and directing manufacturers of those products to look to reformulate them using green chemistry. The Vision Council will be monitoring the roll-out of this law and others to see how it will impact the optical industry.

ON-SHORING OR RE-SHORING IN THE U.S. GAINING   MOMENTUM: SMART MANUFACTURING ENTERING OPTICAL INDUSTRY

There are advantages to products being “Made in America.” With the advent of one-on-one customized lenses, mass production advantages and cheap labor are equalized in favor of mass customization and flexibility, which can be obtained locally. With heavy investments in automation, new production and automation techniques are reducing the amount of labor needed to produce almost all products. Smart manufacturing is becoming the key to competing with off-shore production. While turn-around time for actually manufacturing the product may be close or the same, shipping and logistics can bring the advantage back to the U.S. for U.S. customers.

What this Means for Labs

Labs that embrace automation and smart manufacturing will have no problems keeping up with the “Jones” when it comes to the quality, and cost of lens production. When it comes to delivery time, it will be up to the individual lab to keep the advantages gained and deliver the product in record time.

New retail models such as online eyewear are changing customer expectations as to what is considered acceptable delivery time. Speed is the new normal as local express labs and automated speed labs are reducing finished eyewear delivery times to 24 hours or less.

WHAT’S IN STORE TOMORROW?

Equipment manufacturers are responding to the above trends in a number of ways, including offering new automated equipment, alternatives to alloy blocking, smarter equipment with built-in efficiencies for increase throughput and faster turnaround times.

According to Clarke, “The future (for optical labs) is all about making better lenses, faster, at a lower cost!”



CURRENT ISSUE


Lab Talk-February/March 2018