ESSILOR brochure – February 2019

Supply chain transformation with clarity

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Delivering the gift of sight through a robust supply chain transformation WRIT TEN BY

L AUR A MULL AN PRODUCED BY

CHARLOT TE CL ARK E

w w w.e ssilor. com

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Tasked with taking care of one of our most vital senses, Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor, is ensuring the company’s supply chain is up to the challenge 04

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0% of the sensory informa-

Every day, Essilor manages more

tion that the brain receives

than 3,000 lens flows and over one

comes via sight, making

million product references, relying on

vision one of our most important

an expansive network of 34 produc-

senses. However, our eyes are complex

tion sites, 14 distribution centres and

organs and are rarely perfect: in fact,

481 prescription labs. This means that

nearly two out of three people suffers

efficient supply chain management

from vision problems. The invention of

is crucial. One professional at the

lenses has been an invaluable aid, and

helm of this robust supply chain is

with a streamlined, agile supply chain,

Vladimir Zhirnov, Global Sourcing

Essilor, is ensuring that customers

and Procurement Director of Supply

can get these vital solutions as quickly

Chain & Transport.

as possible.

With over a decade of experience

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working at Essilor, Zhirnov has been

supply chain function to align it with

there every step of the way as the firm

the firm’s global vision. As a result,

has expanded its footprint through

Essilor’s network footprint now able

organic growth and local acquisitions.

to support more than 2mn unique

By drawing upon his expertise at

stock keeping units (SKUs).

Essilor from a local, regional and eventually a global level, Zhirnov says

A ROBUST, DATA-DRIVEN SUPPLY CHAIN

it’s given him “an entire understanding

Digitalisation drives Essilor’s global

of how the company functions, what

supply chain which is dedicated to

the current trends are, as well as the

producing and delivering over 540mn

needs of different countries”.

lenses a year with a high degree of

During this period, Essilor had to restructure its procurement and

personalisation for individual wearers.

Over the past two decades, Essilor w w w.e ssilor. com

has developed a robust digital backbone linking its ecosystem of production sites, prescription labs and distribution centres with over 350,000 customers, to its lens design, ordering and fulfillment systems.

It’s a highly data-driven operation, requiring millions of rapid digital exchanges between customers and every part of the value chain from receiving prescriptions and fitting details to sending manufacturing instructions to a lab. To ensure optimal speed, performance and reliability, Essilor has migrated certain steps as cloud-based services, for 06

example, a powerful calculator capable of generating lens designs to the more advanced personalized measures linked to the Group’s latest Varilux® X series™ progressive lenses. Essilor is already exploring the future of data-driven manufacturing with the creation of a concept Lab 4.0 at its Dallas campus, as well as exploring how artificial intelligence, machine learning, and collaborative robots can improve planning, production, and customer service.

The secret behind Essilor’s explosive growth lies in its commitment to R&D, with more than €200mn dedicated each year to research and innovation. This allows the firm to offer exclusive products that distinguish it from its competitors, but with swathes of

“ Essentially, the supply will be doubled, the external logistics will be doubled and we’ll also have two different systems and organisations that needs to be combined” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor

customised products comes more logistical challenges. This is where Essilor’s worldclass supplier network lends a helping hand.

“We have more than 30,0000 suppliers, of which 1,000 are logistics and supply chain vendors,” explains Zhirnov. “We classify these suppliers into three grades whereby we have 14 strategic vendors, 500 preferred vendors and the rest classified as others.” With such a complex network of partners, supplier relationship management is critical and as such Essilor has developed a thorough relationship management program which ensures that its strategic vendors have a mutually beneficial partnership. “It helps us understand what the partnerships are going to achieve, what our plans are, and how we can support each other to complete these missions,” he says.

But why is supplier sustainability so important for Essilor? “We believe that if we work hand in hand with our suppliers, together we can increase the positive impact of our business in the communities where we work,” notes Zhirnov. “For the past two years in our Sourcing and Procurement team, we’ve set out to involve our network of suppliers in different ways. In addition to driving compliance with Essilor’s responsible business practices, we engage suppliers in three key areas: promoting visual health through awareness raising w w w.e ssilor. com

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and screening actions; responsible

and his team. To tackle this, Essilor has

sourcing from economically vulnerable

developed a shrewd strategy to drive

populations; and positive environmen-

down freight costs in the form of regional

tal initiatives through sharing best

docking hubs. In essence, this means

practices and implementing eco-re-

that all products heading to Asia, for

sponsible approaches.�

instance, have one point of arrival by air freight. They are then distributed by

A GLOBAL POWERHOUSE, WITH REGIONAL EXPERTISE

road and air within the continent with

As is the case for any procurement or

“The concept is that we are entering

supply chain professional, managing

one continent by air freight at one

costs is a key consideration for Zhirnov

point and then we are leveraging our

help from local or regional partners.

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E X E C U T I V E P R OF IL E

Vladimir Zhirnov Vladimir Zhirnov, who began his career as a part-time sales rep while in college, serves currently as Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor International. Based from Singapore, he helps to deliver value across the organization with global footprint in over 100 countries, 600 entities, and 33 manufacturing plants including wholly owned businesses, joint ventures and partnerships.

Previously in his career, he helped to lead the transportation/ freight strategy for Europe.

partners to distribute our products throughout the country,” Zhirnov says.

“If you have 30 plants and you are sending products to smaller markets, Malaysia for example, it’s quite costly to continuously feed into the country directly from across the global plants. Therefore, we send upstream shipments to our regional docking hubs and distribute products from there.”

“ We have more than 30,000 suppliers, of which 1,000 are logistics and supply chain vendors” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor

Similarly, Essilor distributes all its Middle Eastern products from Dubai 09

w w w.e ssilor. com

DSV France : Service Marketing & Communication – communication@fr.dsv.com – Décembre 2018

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We move it.

Impossible n’est pas DSV

DSV – Global Transport and Logisitics We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation. Our reach is global, yet our presence is local and close to our customers. 45,000 employees in more than 80 countries work passionately to deliver great customer experiences and high quality services.

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and all its European products from

Group’s capital is held by employees

Paris. Employing over 67,000 people

who are also involved in the com-

and developing its production and lo-

pany governance. “This decentralised

gistics footprint globally, this extensive

decision-making offers us transparen-

presence is a key accomplishment for

cy and the responsiveness to different

the firm. “We’re really helping to con-

regions,” he explains.

tribute to skills development in different countries,” Zhirnov says. Today, Essilor

CONCENTRATING ITS EFFORTS

has a global footprint spanning around

As well as selling a variety of lenses,

100 countries and as it continues to

Essilor has also claimed a portion of

grow this logistical challenge will only

the consumables market – providing

get greater. A key factor for Zhirnov is

vital tools and items needed to solder

ensuring regional needs are being met

parts and edge lenses, for example –

and this is in part achieved by giving

but this hasn’t come without its

employees a voice – 65% of employees

challenges. In the US market, for

are shareholders and around 4% of the

example, there were several players

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within the group competing for a slice of the pie which threatened Essilor’s margins. By working closely with a third-party logistics (3PL) network design consultant, however, the firm has found data analytics to be a useful tool to tackle this hurdle. “We analysed all the inbound data, the sourcing data, and the customer-based data

“ We’re really helping to contribute to skills development in different countries” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor

to identify our core areas in the US,” reflects Zhirnov. By redesigning its w w w.e ssilor. com

“ We ensure that the materials we are buying are not manufactured through child labour and don’t come from regions where minerals are extracted in an improper way” 12

— Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor

consumables network, Essilor recon-

company’s merger with Italian eyewear

figured its distribution centre locations

company Luxottica, which owns brands

in the US and focused its efforts on

including Ray-Ban, Oakley and Sunglass

areas where it was needed most. This

Hut. This will not only propel Essilor’s

helped to drive labour, capex rationali-

and Luxottica reach farther into the

sation, reduce freight costs and more.

various markets, but it will also undoubt-

“It offered us better costs, lower

edly impact the firm’s sourcing logistics

investments and at the same, it ensured

and supply chain. Although this deal is

we designated channel champions so

still in its early stages, there’s a lot to

to avoid competing against each other.”

consider. “Essentially, the supply will be doubled and we’ll also have two

A HISTORIC MERGER

different systems and organisations

Another project which Zhirnov has a

that needs to be combined”, Zhirnov

keen eye on revolves around the

observes. So whilst this transition is

factured through child labour and don’t come from regions where minerals are extracted in an improper way,” Zhirnov adds.

On top of this, the firm has also set itself another impressive task: to eradicate poor vision by 2050. “It’s the most honourable part of why we go to work every day,” asserts Zhirnov, pointing out how 2.5bn people still lack vision correction today. Through forging partnerships with NGOs, national governments and the private sector as well as facilitating the development of local social entrepreneurs networks, Essilor hopes to understand local in its early stages, Zhirnov is confident

needs and barriers so that it can create

that the integration will be seamless.

vision care infrastructure that is both

Knitted into the fabric of Essilor’s core

purposeful and sustainable. In the

mission is its sustainable approach,

coming years, Essilor may grow its

and this hasn’t gone amiss when it

supply chain and procurement function

comes to the company’s supply chain

further, but it seems the top item on

and logistics management. As part of

Zhirnov’s agenda can be best summa-

its 2020 sustainability strategy, 100%

rised by the firm’s mission: “improving

of Essilor’s strategic suppliers will re-

lives by improving sight”.

ceive an external CSR audit and 100% of its preferred supplies will acknowledge Essilor’s Supplier Charter.

“As part of this, we ensure that the materials we are buying are not manuw w w.e ssilor. com

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Essilor Group

147 rue de Paris, 94220, Charenton-le-Pont, France.

T +31 20 240 1680 | info@essilor.com www.essilor.com