Re-Engineering for a Competitive Edge
Interstate Lab Group
Ontario, Ohio and Indianapolis, Ind.
The Interstate Lab Group re-engineered one of its two locations—in Indianapolis—over the past year, transitioning the facility from conventional to digital processing, with two surfacing lines and automated edgers from Satisloh and Santinelli as well as a fully automated hardcoater. According to co-owner John Art, all of the new equipment is connected via a system of conveyors, which is also new, and a new Crizal AR coating facility has been integrated as well.
“It was probably the biggest challenge of my career,” Art said. “It was like rebuilding an airplane while you’re still flying, because it’s not as if customers stopped sending orders in. They still wanted quality eyewear on a timely basis.”
In all, the project cost Interstate more than $5 million, and it meant that both of its locations—the other is in Ontario, Ohio—are fully digital, fully automated and offer in-house Crizal AR coating (Interstate is an Essilor Partner Lab). The Ohio location also added a third fully digital production line as part of the work, and a 4Racer TBA edger from MEI Systems helped bolster the finishing department. Many of the functions of final inspection and quality control at both facilities are automated, using the Control Unit from Automation & Robotics.
Together, the two facilities process more than 3,000 jobs per day.
“We really did a full reconfiguration of the lab in both locations,” Art explained. “The goal was to improve workflow, and I think we’ve done that.”
Still, the long-time lab owner said the decision to upgrade both labs was driven by a number of factors, including staying ahead of regional competition and the need to replace aging equipment that was becoming too costly to maintain. Ultimately, though, Art noted that the changes will provide the biggest return by allowing the company to reduce “staff headcount by attrition.”
He explained, “We’re not cutting staff, but we are re-assigning employees who perform tasks that have now been automated, like layout and blocking, to non-automated jobs. And we’re eliminating positions as people leave. Being able to do more with less people is a significant factor. The biggest factor with automation in my opinion, is that it improves the speed of the operation. People can be erratic. Automated systems run the same every day, and that allows us to adjust personnel accordingly. The technology allows us to balance our most important resource, which is still our people, with the market demand for speed.”
Another advantage of the automated systems, Art said, is the data they can collect. Although his labs run on systems from a number of vendors, all of the production lines and sections are integrated into the company’s lab management software (from DVI). State-of-the-art software collects data on production and quality that allows the lab to “tweak” as needed throughout the day, correcting for any workflow disruptions and Rx accuracy problems that arise.
“Newer equipment captures so much data, and if you’re not using that data beyond that one job you’re missing the boat,” Art said. “You can and should use it to refine the process down the line.”
That said, Art would like to think all of these changes haven’t changed the quality of eyewear his labs produce—because it was high to begin with. “We did a good job the old way and we’ll do a good job the new way,” he said. “Customers expect you to keep up with the times when it comes to making glasses but, at the end of the day, they want a quality job in a timely fashion. They don’t care how you deliver it.”
Banking on Talent and Technology
Independent Optical Lab
As the pace of consolidation in the wholesale lab sector has slowed, a new crop of independents labs have emerged to fill the void left by wholesalers that have been acquired by suppliers. Sensing an opportunity to serve independent eyecare professionals who would prefer to support other independents, these startups are aiming to offer high quality products at competitive prices—not an easy balance to achieve.
One of the newest entries into the market is Independent Optical Lab (IOL) in Greensboro, N.C. In fact, the lab hasn’t yet opened for business, although a soft launch is planned for this fall.
Financial backing for the new venture is being provided by a team headed by Tom Sloan, a veteran wholesale lab owner and executive whose family started Southern Optical and operated it for many years.
Asked what the three most important investments he has made in IOL, lab founder Ben Collier said replied, “Talent, technology and time.”
“As a new lab, investing heavily into talent was a non-negotiable for us,” said Collier. “As more and more large corporations pull resources from the front lines of their labs, in the form of understaffing and lower wages, we wanted to buck that trend.
“Our investment in talent at IOL will take the form of above-market pay for experienced lab technicians and managers, a minimum of a local living wage for entry level talent, and highly competitive benefits.
“IOL will invest further into talent by staffing critical lab processes, such as quality control, to a higher degree than a comparable automated lab might,” said Collier.
Regarding technology, Collier was quick to point to that freeform process and lab automation have brought new and impressive levels of production to the industry. He stressed that he and the management team at IOL want to ensure that their investment in technology is both up to date and forward-looking.
“By investing heavily in the most advanced technology up-front we can immediately meet and exceed the demands of our accounts for high quality work, top service and fast production. Perhaps the best example of this is the question of whether a lab invests in manual freeform technology with a plan to upgrade when the incoming jobs can justify the expense, or instead invests in automation up-front and hopes they can pay for it with incoming work. For IOL, the larger risk was in having to upgrade to automation mid-stream and work with new lab processes amid current demand from accounts. We chose to invest heavily into the best equipment and automation at the start so we could provide our customers with top quality and service now and on an ongoing basis.
Collier chose the Schneider Modulo line to automate most key lab processes. “As a newer lab the automation that the Modulo line provides is critical to our growth plans and the Schneider Control Center will be installed in the early stages to allow for enhanced monitoring of our automated processes,” he explained. “As IOL grows and gains business the Schneider Control Center will play an important role in monitoring our machines to ensure we catch any process errors before they affect our growing customer base. In addition to the Modulo line and Schneider Control Center we have partnered with DVI to provide an LMS experience that will give us a winning combination of automation, control and monitoring software and lab management.”
Collier admitted that the process of getting a new lab off the ground has taken longer than he originally planned. However, he sees an upside to this, since it has allowed IOL to position itself for long-term success.
“When there is plenty of time to think, there is plenty of time to plan ahead, ask questions of other lab managers and owners, and gain perspectives outside of one’s own experience. Having had the time now to plan a new lab with the future in mind has positioned IOL to produce top quality work right away and handle sustained growth for years to come.”
Good Data Equals Good Results
P.O.G. Optical Group, Inc.
Creston, Iowa; Franklin Park, Ill.
and San Angelo, Texas
Precision Optical Group, or P.O.G. Labs for short, is a full-service lab headquartered in Creston, Iowa. The company also operates a branch in San Angelo, Texas and has a partnership with Opticote in Franklin Park, Ill.
Founded by high school friends Mike Tamerius and Matt Somers in 1992, it has grown into one of the largest independent lab companies in the U.S.
The cost of running a lab has steadily increased over the past 27 years, said Tamerius, who is now P.O.G.’s sole owner and CEO.
“Everything has increased, from property taxes on up. On the supply side, the raw materials and consumables, and the raw material cost with the onset of freeform lenses, has decreased. But the cost of tools for generators, polishing pads, even lens polish, has continued to increase in cost. We’ve tried to offset those increases by getting better at the process, finding ways to produce more lenses.”
To accomplish that, P.O.G. has invested heavily in surfacing, finishing and information systems. “Our primary goal is to invest in technology that will provide efficiencies in the production process and allow more throughput,” said Tamerius, who is now the company’s sole owner. “There are times we make a decision based purely on the economic advantages of a particular automation, but many times there is an ROI of additional throughput that is more important to us.”
Tamerius stressed the importance of investing in information systems that can process data quickly, accurately and reliably. “I want an order to go from the ECP to my surface room within a matter of minutes. Creating that link is critically important, and most of the LMS systems are way behind in this area, so we are working with third party vendors to make this happen.” He added that P.O.G. is spending 30 percent more each year on information technology, and has contracted with multiple internet providers to insure continuous service in the event of an outage. “If one provider in the local area has problems with their service, it rolls over to the next one,” Tamerius explained.
Yet even the best hardware and software doesn’t guarantee that Rx jobs will be processed correctly. “With today’s automated systems, it’s important for customers to input data accurately when they place an order,” said Tamerius. “Customers have got to put in accurate data if they want us to make a good product. With the old school lab of 20 years ago, customers assumed that some technician along the line with calipers was making decisions about how thick or thin to make a lens. That’s really not the way anymore. The data you put in is the result you get out. So not only do we have to train the customers and help them with optics, but we almost have to train them to be a data entry clerk. We’ve spent a lot of time, effort and money to trying to simplify that process for the customer.”
Attracting and retaining employees is another priority that requires a considerable expenditure of both time and energy. “The workforce demand has increased to a ridiculous level, particularly the amount of time we spend dealing with employees and their issues and try to adapt our business to them. Trying to incentivize workers and grow them with the business while keeping an eye on the cost per unit is critical.
“Having the greatest workforce in the industry doesn’t always allow you to stay competitive in the market place,” he noted. “I think you have to be realistic with what we have for a current workforce and build your business around what you have to work with.”
Like most lab owners, Tamerius has automated many aspects of lens production. Yet he was quick to point out that automation brings with it a new set of workforce issues. “Automation requires more technical maintenance, production supervision and information systems administration. Automation doesn’t mean you are going to cut your labor costs. In fact, the average wage is likely to go up, but the number of employees will likely be lower.”