ANNUAL REPORT 2004 - Luxottica Group

VERTICAL INTEGRATION
Over the decades Luxottica Group has vertically
integrated every phase of the production process, as it
saw as at the only way to reach the level of efficiency
suitable for the type of products and services wanted
to offer.
Control of the various phases of production allows the
Group to closely monitor the quality of the products
and processes, introducing innovations, maximizing
synergies and new operating methods.
Supervision of these phases makes it possible to
control and minimize production time and costs, in
order to create the best possible product without
compromising quality in the process.
The accomplishment of these goals is made possible
through the perfecting of every single process,
rigorous quality inspections, and above all, ensuring
that each and every department understands and
fulfills its role in achieving the final results.
This ongoing quest in research and development
provides the plants with the latest equipment and the
best manufacturing methods.
In addition to having state-of-the-art manufacturing
plants, the Group utilizes a centralized system for
monitoring inventory and orders. Each day, the analysis
of this information allows projection of demand, making
it possible to plan production and other necessary
tasks in advance. This is no small advantage for a
group of this size, where the perfect coordination of
supply and demand reduces potential problems in
inventory and in the supply of raw materials.
Bringing together the speed and efficiency of the
manufacturing plants with the precise monitoring of
the market, places Luxottica Group in the best
possible position to efficiently meet customer
requests, adapting to changes in trends in the market
and fashion, both in terms of type and quantity of
MANUFACTURING
product. Such flexibility is a powerful competitive
advantage in such a multifaceted market, where the
ability to address the latest fashion trends is
fundamental.
Over the years, Luxottica Group has brought both retail
and wholesale distribution into its vertically integrated
system. This has allowed the Group to become global
leader in eyewear and to be one of the manufacturers
of premium prescription and sun frames with most
efficient cost control and highest profitability.
QUALITY: A KEY ASSET
Product quality has always been Luxottica Group’s
main focus and has led to the integration of every
phase of production. Quality is, in fact, the critical
factor in the premium segment for both optometrists
as well as the final consumer.
Quality and process control teams regularly inspect
semi finished products during the various phases of
production: verifying the feasibility of a prototype in the
project design phase, controlling standards across the
spectrum of products during the production phase,
and subsequently checking for resistance to wear and
tear, and optical properties according to various uses.
The manufacturing processes of primary suppliers are
furthermore controlled and certified, including the
materials utilized.
Thanks to the ongoing inspection of the precision and
expertise with which the various phases of production
are carried out, the quality of Luxottica Group’s final
product is always of the highest level. This
fundamental strength of the Group’s products, is
confirmed both by the relationship of trust it enjoys
with independent opticians, as well as the low rate of
returns.
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