Chapters
Annual Report 2020

2.4 Manufacturing and dedicated production lines

Our efficient and safe Product Value Chain delivers quality products to our customers with low lead times, thanks to our 17 manufacturing sites, which are made up of one Regional Fulfillment Hub (RFH) and 16 TechCenters.

These manufacturing centers are strategically located across the countries where we are present and produce a high-quality end product.

Our RFH network strategy centralizes our manufacturing activities and consolidates them across our global network. This contributes to streamlined operations, increased operational control, stronger support for online and offline sales, a reduced carbon footprint and more benefits.

Our strategy to further centralize our production volume in our RFHs ensures our long-term value creation objectives. We also support global social and environmental goals by working at production sites that are overseen for optimal worker safety and environmental benefits.

Our planned RFH network aims to:

  • Reduce our CO2 emissions per processed eyeglass frame
  • Increase water and energy efficiency with highly-sophisticated equipment
  • Increase manufacturing precision and reduced material scrap, which lowers waste volumes per frame
  • Increase activity control by experienced staff
  • Reduce occupied space significantly to save supply and management resources
  • Facilitate integrated e-fulfilment
  • Support our instore showroom model

Our manufacturing sites produce more than 72% of the total spectacles we sell. The volume we processed in 2020 decreased by nearly 15% to almost 11 million. This decrease was the result of the adverse revenue impacts of the global COVID-19 pandemic.

During the COVID-19 pandemic, manufacturing sites also served as central platforms to deliver protective wear to our stores.

Manufacturing sites support our omnichannel customer journey and operational efficiencies

In 2020, we strengthened our manufacturing site network to enable the highest service level and quality of store fulfilment and customer orders. Our network operates and maximizes efficiencies by streamlining the edging, mounting and finishing processes for the majority of spectacles purchased in GrandVision stores.

This manufacturing site network includes the Porto RFH, which is a blueprint for all other RFHs that we will transform in the upcoming years. We expect this standardized and centralized network structure to yield significant benefits. This includes improved customer experience, better lead times, product availability, and significant efficiency gains in operating costs and working capital.

The Porto RFH serves our retail brands in Italy, Denmark, Sweden, Portugal and Spain and further optimizes our operations in these countries. In 1Q 2021 it will expand its services, and we will also upgrade our manufacturing site in the U.K. to an RFH modeled after our Porto blueprint to accommodate GrandVision's ongoing omnichannel ambitions regarding subscriptions and e-commerce.

This upgraded network will become essential to supporting our instore showroom model that allows our stores to only carry try-on inventory of optical frames. Frames in our stores' displays are considered samples, and customers can select the styles they like in this convenient setting. Once a customer places an order, both the frame and lenses are sent from our central inventory in the manufacturing sites. When the last pair of frames of a certain model is sold in the store, we finish it using remote edging services.

By the end of 2020, we successfully implemented our showroom model in France, Finland, Denmark, Sweden, Germany and the U.K. In 2021, we will roll out this model to The Netherlands, Belgium, Norway, Italy and Portugal.

By strengthening our manufacturing site network and establishing our store showroom model, we improve our supply chain and logistics, increase product quality and consistency, reduce lead time and environmental impact, and increase lean operations. This concept allows our store employees to focus more on customer service rather than manually finishing prescription glasses and sunglasses.

Continuous manufacturing site improvements

We strive to continuously improve our legal compliance with local Environment, Health and Safety (EHS) regulations. That's why we partner with Ramboll, a leading engineering company, to support our manufacturing site compliance journey. We employ dedicated environment management system personnel to keep track of our progress, and educate our site employees on EHS topics. We will carry out external manufacturing site audits for EHS compliance and additional topics in 2021. We expect the outcome of these audits to help us improve our working environment and further reduce our CO2 impact.

We 'Reduce & Replace' plastic waste

Several of our retail brands implemented programs to minimize plastic packaging and ship reusable boxes between manufacturing sites and stores, which reduced their outbound CO2 footprint. For example, in 2020, our German retail brand Apollo saved 117 tons of CO2 by introducing additional initiatives to its 'Reduce & Replace' program by expanding its reach beyond logistics:

  • Eliminate plastic bags from all stores
  • Eliminate helium-filled promotional balloons
  • Deliver eyeglass lenses to stores in FSC-certified paper instead of plastic
  • Replace consignment lens plastic packaging to paper (about 70% implemented currently)

In 2021, the retail brand will further reduce suppliers' packaging waste and work to become carbon neutral.

Responsible resource use in our manufacturing sites

We track the environmental impact of our manufacturing processes and the materials we use — including those for eyeglass frames, lenses and packaging, as well as water usage, waste streams, gas and electricity.

We are aware of the environmental impact of the materials we use to make our eyeglasses. This includes acetate (a plastic blend of cotton), metals, plastic for lenses, and plastic and cardboard packaging. In 2021 we will complete a Life Cycle Assessment on the end-to-end Product Value Chain and impact of three of our products, including raw materials, packaging and lenses.

Through this study, we will gain a more granular and concrete overview of our carbon footprint and develop a plan to tackle its reduction. We aim do this more efficiently by concentrating on the largest areas of improvement across our value chain.

Furthermore, our manufacturing sites are also improving:

  • Energy efficiency
  • Efficient heating and cooling systems
  • Electricity use reduction
  • Water efficiency
  • Waste reduction

We now also monitor CSR KPIs in manufacturing sites on a monthly basis, thanks to the development of centralized reporting dashboards.

Manufacturing site water efficiency

In 2020, our water efficiency in manufacturing sites decreased compared to 2019. These sites remained open and fully functional throughout 2020 despite the reduced volumes of spectacles processed during the year due to COVID-19. This resulted in an atypical water efficiency ratio compared to the trend we have seen during previous years.

However, we still have the ambition to continue improving our environmental performance and reducing our environmental impact. Our current 2025 reduction goal of 1.87 liters per spectacle processed remains unchanged.

Recycled waste streams in manufacturing sites (tons)

2020

2019

2018

Plastic packaging

216

156

111

Paper and cardboard

299

368

216

Production waste

483

491

516

Total

998

1,015

843

Manufacturing site waste management

We strive to continuously improve our process efficiency while producing as little waste as possible. In general, our manufacturing site waste management systems are more efficient and sustainable than those of our local stores due to streamlined processes and procedures. We track waste streams in our manufacturing sites, including plastic packaging waste, paper and cardboard, residual waste from cutting and edging lenses and unused products.

Some of the good sustainable practices across our manufacturing site network include:

  • Transporting products from production facilities to stores in reusable boxes
  • Using edging machines to cut lenses without using water
  • Converting heat from compressors into warehouse heating during winter
  • Equipping machines that use water from water recycling systems
  • Partnering with a recycling company to create construction materials from lens cutting waste

The overall amount of recycled waste in 2020 was about the same compared to 2019, despite the fact that we produced a reduced volume of spectacles in our manufacturing sites. We did see an increase in our plastic waste related to our enhanced hygiene, health and safety protocols related to the COVID-19 pandemic. The table above shows the split per waste stream for recycling in tons.

What to do with discarded demo lenses?

When they are shipped from manufacturers to manufacturing sites and stores, all eyeglasses use demo lenses made of plastics like acrylic to maintain their shape. However, demo lenses are not used after they are removed from frames and are discarded.

This is a dilemma for GrandVision, as we want to continue reducing waste and our environmental footprint. How can we safely receive and ship our products but reduce the weight of each shipment? And how can we replace and recycle these demo lenses?

Our Finnish team has already piloted a collaboration with a local provider to turn their demo lens waste into mugs. And now, our Demand Team is looking into more environmentally responsible alternatives to reduce the amount of demo lens waste produced each year. Two potential options being considered are to recycle or reuse the demo lenses for other purposes. In 2021, the team will investigate these options.

Total environmental pressure for GrandVision manufacturing site portfolio

2015

2016

2017

2018

2019

2020

Total energy consumption (GJ)

41,169

43,728

42,393

45,151

49,731

50,928

Total CO2 emissions (Ktons)

3.49

2.98

2.97

3.13

3.41

2.88

Total water consumption (1,000m2)

20.0

23.2

22.8

22.9

23.3

24.36

Off-cuts offered for recycling (tons)

438

596

534

843

1,015

1,174

Total environmental pressure in manufacturing sites per spectacle

2015

2016

2017

2018

2019

2020

2025 target

Energy efficiency (MJ per eyeglass processed)

4.6

4.2

4.0

3.9

3.9

4.7

-

CO2 efficiency (grams of CO2 per eyeglass processed)

391

284

282

266

267

265

205

Water efficiency (liters of water per eyeglass processed)

2.24

2.21

2.16

1.98

1.82

2.24

1.87

The above tables illustrate the environmental performance of our manufacturing site portfolio, as well as per spectacle processed. About 98% of all manufacturing site processes are included in the environmental tracker that we measure. Please note, we recalculated the 2018 data with updated conversion factors.