Disruption and innovation. They are two of the most commonly used words to describe business today, and they often go hand in hand. Established businesses worry that their tried-and-true business models will be the next to be disrupted by a start-up, just as Borders was done in by Amazon and the entertainment industry has been upended by the digitization of music, movies and television. At the same time, every business is wondering if some new technology might be the magic bullet that allows it to innovate and gain a competitive advantage. After all, it’s better to be the disrupter than to be disrupted.
At first glance, optometry wouldn’t appear to be an industry ripe for disruption. But, that was before new competitors like Warby Parker burst onto the scene with new business models to sell eyewear on the Web. One of the companies monitoring these new competitors is VSP Optics Group, the optics lab arm of VSP Global. With $263 million in revenue in 2014, it is one of the largest manufacturers of lenses for glasses, serving some 30,000 independent optometrists around the country. As VSP took note of a changing market, it began to ask how it could speed up the delivery of a new pair of glasses to its customers, says Joe Maris, the senior vice president of lab operations for VSP Optics Group.
The answer was a $37 million investment in an 80,000-square-foot, state-of-the art production lab in Folsom, Calif., that doubles the footprint of the original location and is designed to improve the speed to market. The lab has 401 employees and processes nearly 6,000 pairs of eyewear each day with plans to expand to 8,000 pairs of eyewear daily in the coming years. According to Maris, it features cutting-edge technology, including the largest of its kind in the world lens grinding and polishing machine.
Yet, the unlikely centerpiece of the facility is a mini-load automated storage and retrieval system (AS/RS), robotic pick station, and sophisticated warehouse execution software (WES) that synchronizes the delivery of lenses and frames to the robots. Developed by a system integrator (Wynright), the solution employs in a lab setting a postponement and work-in-process strategy more commonly found in industrial manufacturing environments.
The mini-load acts as buffer storage for work in process—lenses ready to be fitted to frames or frames waiting for the right lenses to come out of the grinding and polishing stations. The mini-load features three aisles and 1,050 storage locations and tracks almost 30,000 frames and lenses. When all of the components for an order are present and ready for finishing, plastic totes are automatically conveyed from the mini-load to a robotic piece picking station where two robotic arms pick and place the right frames and lenses for a customer order onto a plastic tray that is then sent to a finishing station. It is a complex process that requires precise timing, but the software behind the solution makes it all appear deceptively simple.
The technology allows VSP to start work on a pair of glasses as much as 24 hours earlier than in the past, shaving at least one day, or 33%, off of the delivery time to the customer. What’s more, it has reduced the number of associates required for that process from 10 to three per shift. “That’s a real competitive advantage in the marketplace,” says Maris.
Looking for innovation
An optics lab may seem like an unlikely setting for a next generation automated materials handling solution, but Maris says it was born out of necessity. With $263 million in 2014 revenue, VSP Optics Group is a leader in its field. Today, it operates 15 optical labs around the country, producing nearly 17,000 pairs of eyewear each day. Long the flagship operation, the Folsom facility accounts for 35% of total volume across the network.
For years, the company had a tried-and-true process. Once a customer picked a pair of frames, the optometrist sent an electronic order to VSP and then shipped the frames. Even if the frames were shipped overnight, it was the next day at the earliest before they arrived at the lab and VSP started working on the order. For most customers, that was acceptable. But in recent years, eyewear startups have begun to threaten that traditional model. “Our optometrists are facing mounting pressure from retail chains and online competitors entering the industry,” Maris says. “They are pushing for faster delivery.”
About 2.5 years ago, VSP realized that it was running out of space in its flagship lab. Operations had spread from the original building into two others in the area and in the not too distant future, even that would not be enough. “We wanted to put three buildings under one roof and optimize the workflow in one space,” Maris says. At the same time, VSP also wanted to make a substantial improvement on the delivery time to its customers. “We looked to our supply chain to come up with a new process that would allow us to stay ahead of that curve and level the playing field for our optometrists,” Maris says.
Every process was put up on the white board. The goal was to use the 24 hours between receiving an electronic order and the frames to start the process. The question was: “Even if we could start earlier, how were we going to store the lenses in a way that we could match up the right order with the frame we just received?” according to Maris.
As a first step, VSP created a manual process to store and match up lenses and frames. That solution was both confusing and labor intensive, requiring an army of 10 people per shift, or 30 people per day across a three-shift operation, to keep up with the volume of orders. “We wondered if there was an automated system that could meet our requirements and deliver a payback,” Maris says.
After reading an article about a system being used to automatically store and retrieve orders for a prescription medicine provider, Maris and his team reached out to the provider of that solution, as well as others in the pharmaceutical field, to see if they had an answer. When VSP described what it wanted to do, none of those providers could meet their requirements. One, however, suggested Wynright.
The right prescription
According to Maris, the design of the new solution began with a presentation to the supplier of the business case that was driving the need for a new way to go to market and a walk through of the manual system then in place. Could that be replicated with an efficient automated system? What’s more, could it be fast-tracked so that it would be up and running before the end of 2014, while VSP was also learning to operate its new one-of-a-kind grinding and polishing system?
In many respects, the concept of storing and retrieving totes and delivering them to a robotic pick station was old hat. Yet, it still took nine months from that initial conversation to design, implement and tweak the system. Since automation works best in predictable environments, variability was designed out of the solution by creating standard totes with 20 storage slots each and a standard-sized envelope that could accommodate lenses and frames stored vertically in the tote. Vertical storage made it easier for the robots to pick the envelopes. With 1,300 totes, the system could handle 26,000 frames and lenses at a time.
The real challenge was the software. It not only needed to keep track of up to 26,000 pieces so that it could marry up the components of individual orders, it also had to optimize the way lenses and frames were stored in the totes and synchronize delivery of the right lenses and frames to the robotic piece-picking station.
“The software is constantly re-aggregating the totes,” says Maris. “It knows when a tote is reaching its min/max level, depletes it and then fills it back up. If we couldn’t optimize the storage, we’d need a much bigger system and that would’ve increased the cost of the project.”
The new system has delivered on all of those goals. For starters, it requires three people, down from 10. Their primary role is to scan lenses and frames into totes and make sure that the envelopes are positioned vertically for the robot. Once the totes are inducted into the AS/RS, the software takes over. It chooses a storage location, and, when the time is right, synchronizes the delivery of lenses and frames to the robotic pick station. “Our conveyors have stops on them to position totes and ensure that the frames and lenses arrive at the same time,” Maris says. It also monitors the storage capacity in each tote to make best use of the available space in the system.
Most importantly, it is enabling a process that has reduced the delivery time of a finished pair of glasses from 3 to 3.5 days to 2 to 2.5 days. “Speed is the measure of our success,” says Maris. “Our optometrists have the same competitive omni-channel pressures as other retailers.”
After all, in an industry on the verge of change, it’s better to be a disrupter than to be disrupted.
System integration, conveyor and warehouse execution software: Wynright
Automated storage and retrieval: Daifuku
Robotic automation: Fanuc America,