Like most modern businesses that rely on overseas suppliers, the optical lens industry has been impacted by recent disruptions to the global supply chain. Evidence of product shortages are apparent at optical trade shows where spectacle lens manufacturers are willing to wait up to six months to take delivery of low-priced lenses made in Asia.
In recent months, the supply chain crisis spurred by the COVID-19 pandemic and an energy crisis in China has reduced production, leading to even longer wait times for optical lens products as ships sit in ports along the Chinese coast waiting to leave for the U.S. market. Meanwhile on the West Coast, ships that have made the journey across the Pacific Ocean are unable to unload goods due to a worker shortage.
ABB Optical Group
One company that began preparing for supply chain issues early was ABB Optical Group, one of the largest suppliers of spectacle and contact lenses in North America. Mike Rybacki, senior director of business operations at ABB, believes the optical lab industry needs to continue to be proactive to ensure they are ready for any changes in the supply chain.
“ABB Labs works diligently to plan for future growth and demand, annually and whenever significant changes occur that impact our purchasing habits. We forecast several months with our suppliers,” Rybacki said, noting in late 2019 ABB was ahead of the curve and planning for growth in 2020. “Right after the pandemic hit, our primary suppliers were already sending us our large stock orders. We set up direct import containers overseas for all core clear lens products to ensure stock levels would not fall.”
Rybacki said that communication with overseas vendors, paired with taking the time to properly forecast potential supply shortages, helped make sure ABB could continue to supply their North American customers.
Even with its forward-thinking approach, ABB still experienced challenges sourcing polycarbonate lenses, Rybacki said. However, he said ABB resolved the issue by utilizing an alternate supplier which allowed them to “stay in front” of potential supply shortages.
ABB purchases in bulk from both primary and secondary suppliers in the U.S. and offshore. Having regular contacts with these vendors allows ABB to pinpoint weaknesses in the supply chain and maneuver around them. “We have noticed the Far East as being one of the areas of greatest impact. It takes the longest to get products from that region,” he noted.
To ensure an adequate supply of products within its lab network, ABB has adjusted its internal distribution system. “Because of our volume, we were able to create a centralized facility within one of our laboratories,” explained Rybacki. “This central location manages a bulk ordering system that we established with our primary vendors. From there we were able to supply from this location to the other labs within our internal network.”
Rybacki believes labs need to take a more open approach to acquire products. He recommends that labs build a broader list of suppliers to reduce the chance of shortages during a supply chain interruption and protect productivity from potential interruptions due to parts shortages.
“Of course, for machines going down you can’t know what or when, but additionally with multiple labs we have multiple backup spare parts and can ship them from one lab to another to support this problem,” he said, highlighting the advantage of having multiple labs which can carry spare parts to cover any possible lead time.
“You need to be open to locating hungry alternative suppliers,” Rybacki said. “Of course, advanced planning and forecasting are the most critical, but being super proactive with supplier communications in all possible ways is also important, from the warehouse picking/shipping/inventory supervisors to the upper management. Having close ties and solid relationships at all levels is key.”
At Global Optics, which provides consolidated purchasing, logistical solutions, and supply chain distribution for independent optical labs across the U.S., president and general manager Jessica Mitchell believes the optical industry is beginning to emerge from the shortage crisis. “Overall, Global Optics has kept up with the demands of our customers. We have recognized some back-orders pains with specific vendors, but we are slowly coming out of that. Currently, our back-order situation is the lowest it has been in two months.”
Global Optics operates one of the biggest lens warehouses in the U.S. at its Green Bay, Wisconsin headquarters, and its customers rely on them to supply a large volume and selection of lens products. Mitchell said Global Optics has quickly had to increase stock orders to ensure they have an adequate supply for customers.
“The port problem in California seems to be our biggest barrier,” said Mitchell. “We have had vendors airship us inventory to hold us over until the container shipments can be delivered.
“Inventory shortages have significantly increased our back-orders,” she continued. “Global Optics Inc. typically operates with little to no back-orders and we have had a steady back-order issue since the pandemic began. We are increasing our orders with vendors so we have more stock on hand in case of a major shortage,” she said, adding they have also been placing more frequent orders to prevent back-order issues as the supply chain crisis continues.
According to Verified Market Research, the optical lens market was worth more than $15 million in 2020 and is projected to grow to more than $28 million by 2028. This is prompting optical labs to continue to find new vendors to meet demand. Though many labs already use multiple vendors, increasing diversification has been accelerated by the pandemic.
Walman Optical, one of the largest wholesale optical distributors in the U.S., has been working with its vendors to ensure that product demands are being met. Senior vice president and general manager Bryan Schueler said using a distribution company like Global Optics has allowed Walman, which distributes lenses, instruments, and eyewear, to overstock on products and create opportunities for substitutions. And using a U.S.-based distributor has also allowed the company to minimize wait times.
Schueler said that to ensure product delivery, Walman has pivoted not only on where it gets its lenses but also on choosing more diverse product options. “We have been using more open blanks,” he said, noting this has allowed Walman to provide appropriate products during extreme shortages. He added, however, this has been rare due to more frequent ordering directly from vendors to shorten delivery times. “We are taking a day or two off shipping with direct orders.”
Maximizing supplier options is a trend that other labs across the industry are also joining. Independent labs in particular are working to balance supply customers with lens products and maintain affordable prices in the wake of shortages.
Independent Optical Lab
The supply chain issues have already forced companies to switch to air freight to guarantee timely delivery. This increases product costs, something that independent labs are working to avoid passing on to customers. Instead, labs are focusing on improving logistics and predicting product needs so they can place larger orders and stockpile lenses in case of shortages.
“We can pivot back and forth between suppliers and not have an effect on customers and turnaround time,” said Independent Optical Lab co-founder and CEO Ben Collier. His North Carolina-based lab has been carefully monitoring its inventory to plan for possible supply shortages.
Collier said like many labs in North America, the biggest shortage has been PPG’s Trivex lenses and multifocals. With these lenses being difficult to substitute, his logistical team quickly identified alternative suppliers they could switch to when shortages made ordering difficult. He said Independent Optical Lab prefers to use U.S.-based vendors such as Younger Optics, Hoya, Vision Ease, and Global Optics, and that they have been able to use their diverse vendor options to keep products in stock.
Collier pointed out that the supply shortage has helped the company better predict the potential for future shortages and they now have stockpiles of certain lenses on hand at all times. He believes diversifying among multiple independent suppliers will keep labs “safer for longer.”
“We will probably always have a small stockpile of poly four-base lenses,” he said reflecting on the past year and a half. “I recommend other labs start looking for independent solutions and at multiple independent wholesalers.”