Pearle Vision

The company

Pearle Vision distributes eyeglasses through a string of several hundred retail stores in the US. They carry two fundamentally different products: Frames are a fashion item and, like all fashion items, of rapidly changing and unpredictable popularity. Lenses, however, are a commodity item and demand is easily predictable from medical statistics.

All glasses sold in the US are distributed from a single DC in Dallas, Texas. The company strategy is to keep each of about 15,000 skus available in every store. A customer can order glasses and pick them up within 24 hours, during which time the lens and the frame will be picked from this DC and sent overnight to the store, where the glasses are finished and held for customer pickup.

This DC occupies 100,000 square feet and holds 50,000 active skus, of which only about 8,000 are frames (2,000 styles, each in several different colors). The rest are lenses, which run from -12 to +12 diopters; and are available in either glass or plastic or polycarbonate; and with different tints, different coatings, and as bifocals or even trifocals. Counting all possible variations, each style lens comes in about 3,000 variations, each one a separate sku.

The DC polls orders from its stores every hour, which account for about 2,500 orders per day and about 35,000 units. The DC also handles about 3,000 returned units per day. The DC ships to every store 2—3 times each day. Replenishment orders are sent on 2-day delivery and special orders go overnight via FedEx.

The DC has 30 order-pickers and 8 restockers. They pick all replenishment orders first, for the 4pm ground shipment; then they pick the special orders for the 9:30am air shipment. Single-line orders are batched into groups of 99; orders with from 2 to 20 lines are batched into groups of 12; and orders with from 21 to 49 lines are batched into groups of 6.

There are twice as many picks from lenses as from frames—for the obvious reason that each glasses frame holds two lenses.

Since 1995 Pearle Vision has been owned by the Italian company Luxottica Group, which has taken the chain upscale to avoid competition from Asian manufacturers with lower labor costs. Over 80 percent of its production is in Italy. Interestingly, the main competitor of Luxottica is another Italian company, the Safilo Group, which owns LensCrafters and the Solstice Sunglass Stores. Both Luxottica and the Safilo Group are located in the same small alpine region of northeastern Italy, which has historically been home to craftmen specializing since the Middle Ages in the manufacture of eye glasses.

According to an article in the New York Times, both companies have “transformed eyeglasses from a commodity healthcare product into a costly fashion accessory”. Both have licensed the names of famous international design houses, such as Versace, Prada, Donna Karan, Armani, Dior, Gucci, and they introduce thousands of new designs each year.

The distribution center

The basic sku is a lens. These all look the same but vary by optical properties.	Dense, uniform storage of similar products makes it easier to pick the wrong item. This could be especially dangerous for medical items. Pearle protects against this by guiding picking by a handheld RF device.	Slower-moving product is pulled from a row of static shelving between rows of flow rack, from which the faster-moving product is pulled.
Product is very uniform: Eyeglass frames and lenses. This makes storage easy to configure.	Order-picking cart. Orders are picked into plastic bags that have been bar-coded. The RF device is in the blue bin on the right.	Arriving product is put in bulk storage, where it is managed by the vendor.
A cart of product to be put away	Slow-moving skus are stored in very high shelving.	Contact lenses, which are high-value and small, are picked from vertical carousels.
Because this DC ships medical products, they keep a paper record of all shipments.