No Lab is an Island - Getting the Most from Your Lab Association


Feature in LabTalk April/May 2006

Lab Operations - April / May 2006
No Lab is an Island - Getting the Most from Your Lab Association
 
By Seth J. Bookey
 

With the threat of industry consolidation and corporate ownership, independent wholesale optical labs are facing more pressure than ever before. But, no lab is an island, and being a member of a lab association or buying group can often make all the difference when independents compete for their share of the market. Many labs benefit from belonging to more than one of these groups.

Corinne Hood, president of optical lab Katz & Klein, said that today, “There is an extreme disadvantage to not having involvement with others in your industry if you do not participate in one or both types of these groups.”
Katz & Klein has belonged to the California Optical Laboratories Association (COLA) since its inception, and Hood noted that COLA membership has allowed her lab to get insights into what’s happening in its region, and colleagues to call with questions or observations. She also said that, “We develop friendships and learn the most sitting around talking during the non-lecture times. Another aspect is that since COLA meets at a different time of the year than OLA, we frequently are privy to new items or policies earlier from our suppliers who also attend COLA. That information may be delayed if we wait for someone to call on us with information or wait until our annual meeting.”

Katz & Klein is also a member of Global Optics, a buying group that also has its own warehouse, which “affords us many shipping and supply advantages. Also, we are able to discover if our suppliers treat us all in the same fashion.” J&J Optical is a member of both COLA and of Lightbenders. J&J’s president, John Haigh, observed that as a member of Lightbenders, “we share much information–financial, technical, and marketing–as a group. I have far more ability to compete in my market because of Lightbenders. Just being able to discuss issues and problems openly among your peers is a great way to solve them. Together, independent lab groups can be a formidable force. I don't understand why any independent lab would not want to join and support organizations like COLA, and groups like Lightbenders.”

J&J Optical’s membership in COLA has also educated the lab about general issues, in addition to optical-specific aspects like lenses, equipment processes, and business planning. “Just to start, technical training, legal training in things like OSHA and HIPPA, access to expert optical legal council, employee and human resource training, and ANSI standards updates. I have saved money on workman’s compensation insurance through COLA,” Haigh observed. Southwest Lens of Dallas is a member of the Optical Services buying group as well as the Midwest Optical Laboratories Association (MOLA). Co-owner Tom Mitchell noted that Optical Services gives the lab “good bang for the buck,” since prices are negotiated. He also appreciates the group’s marketing programs and has increased business with OSI’s $2000 Minute program.

As a member of MOLA, Southwest Lens has a chance to engage in networking about the technical side of the business. “With MOLA, it’s a regional meeting. I can bring my lab manager along. Satisloh, consumables companies, and some lens companies, and software providers like Vision Star also attend it. We have a nice mix of people–about 50 exhibitors,” Mitchell said. MOLA also holds seminars. “This year, it’s about freeform technology.”

According to MOLA’s Carol Michael, the group is an outgrowth of an informal group of lab owners who came together to “talk shop away from the shop,” and is now a organization with an annual meeting in Blue Springs, Mo., which is mutually convenient to its members, and more cost-effective to lab members than going to New York, Las Vegas, or Chicago.

Alternate Routes
Lab association meetings help present unexpected business opportunities for labs as well. Keith Heckenkemper, president and owner of Rx Optical in Broken Arrow, Okla., said his lab became a Transitions Star Lab as a direct result of going to a one-on-one vendor 30-minute vendor meeting during an annual Optical Synergies conference.

“I am sometimes meeting someone from a vendor I don’t usually speak with. If there’s interest there are ways to follow that up. We do about five or six of these each day,” he said. “At my first Optical Synergies meeting, I met with a Transitions rep. In Oklahoma, we were passed over by Transitions. She talked about the Star Lab Program, and how through participating and reporting, we can get co-op funds and seminars set up. They reallocated my lab to someone who represented Texas. We became a platinum lab and now get somewhere between $6,000 to $10,000 a year to support the product via marketing material and representation. By going to that meeting, we had completely new exposure to vendors we hadn’t had before.” Rx Optical had been doing an eight-percent business in Transitions before that meeting; Heckenkemper said the lab is now doing 17 percent, three percent higher than the national average.

Rx Optical is also a member of MOLA, where “information sharing is based on relationships,” Heckenkemper noted. “While we are competitors, we can be friendly competitors.”

Solving Problems Online
Informal networking between meetings is also a big part of belonging to a lab association. Optical Services International provides information sharing via its online forum for its members. “If anyone has a question, they can e-mail it to OSI and it goes out to the entire group. Or if someone has a new source for supplies or lenses, messages are posted there,” said Caroline Decker, owner of Opti-Matrix in Huntsville, Ala. She sees OSI as more than just a buying group. “It’s a user’s group since we share information about equipment, personnel, and vendors.”

Another online benefit for members of Global Optics is real-time inventory checking. Geff Heidbrink, owner of Harbor Optical in Traverse City, Mich., said that his customers use a core of 10 to 20 progressive lenses, but when an unusual one is needed, he can check for it online to see if it’s in the warehouse. “We don't have backorders,” he added. “Anything we need we will have by nine a.m. the next day.”

“The warehouse is why we switched to Global Optics. It's a very strong network now also. We help each other out in our businesses. I didn't realize that until I was part of it for a while,” Heidbrink said. Harbor Optical has also benefited from Global Optics’ marketing programs, like the new JumpStart series of DVDs and Your Eyes training. The latter, he noted, “has been a tremendous success. “The offices that do it have found tremendous product growth. Our job average because of the program has grown dramatically.”

Global Optics also gives its members opportunities for online discussion. Dan Torgersen, vice president of information services and special projects for Walman Optical, said that one member of the group just got in-house coating capabilities and wanted to know where to buy envelopes. “E-mail goes out announcing new questions on the forum. There is good member exchange discussing difficulties or problems.”

In addition to the mutual benefits of lower pricing and inventory control via its warehouse, Global Optics also gives it members the benefit of contained shipping costs. Torgersen observed that before joining Global Optics, “Walman had 20 branches at the time and we would get lenses from six vendors, paying inbound freight. With Global, we got one box with lenses from all the different vendors. It’s made our branches more efficient since we get one box with predictable delivery. Fewer purchase orders have improved our efficiency. It has made my accounting people happy, too. Now there is one Global invoice and one check to go out.”

Success through Training
Getting training for a lab’s sales staff is also another benefit of belonging to a lab association. Dana Weeks, president of Optical Services International (OSI) , noted that her group’s main objective “has been education and information. There are 60 million prescriptions leaving the independent ECP. Our goal is to help develop the ECP and keep those prescriptions.” Weeks added, “We’re in constant communication at every level. We keep a library of information from one lab to another. Lab policies can be compared and drawn upon. Our goal is to help members grow their business and differentiate their lab from the corporate owned labs.”

OSI’s $2000 Minute program, which debuted in 2004, helps labs train optical dispensaries “from the receptionist on up.” OSI also publishes the loose leaf Ophthalmic Dispensing Guide, with updated information on new products and materials. “A lot of our labs use it at the accounts’ office,” Weeks said. “They do training for new dispensers in house at the lab and use this as a textbook. It covers absolutely everything from PDs and adjustments to materials, designs and coatings to how to write an Rx.”
In addition to an annual meeting, each year after Vision Expo West, the group has meetings for sales managers and production personnel, as well as a third meeting, which is a sales meeting or a hand-on production meeting at a lab.

Finding success by offering training to ECPs is also a goal at Lightbenders, which recently introduced “Strata,” a DVD product that labs can use to train clients. Vicki Kathe, executive director for Lightbenders said, “It’s a scary time for independents since the pool is shrinking. For labs that are remaining independent, groups like ours gives them a peer support group. Our labs really benefit from that.”

Dan O’Brien, president of Precision Optical in East Hartford, Conn., has been using the tool with his client. Using Strata, “we help to get our ECPs to get the most out of their practices with this tool,” he said. Consequently, the lab gets more business from those practices as well.

Lightbenders also helps labs by looking at their numbers, comparing a lab’s production output to the number of staff. Kathe said, “Members say our advantage is the information we share at meetings and in between by e-mail and conference calls. When new products come out, we share information. They’re not trying to figure it out on their own. We also help labs grow their business. Some members have grown by watching what the larger labs do. With customer service training, and information on cross training and hiring, we bring them up to the next level. We also help ease growing pains when labs move to the next level. Lightbenders also helps its members by creating pricelists for them, and by creating newsletters for lab members.”

Adding Value
Other associations help members with specialized products. In addition to keeping its membership fees low, Optical Synergies has brought its members two value-added products in recent years. TravelFlow helps wholesale labs collect bills on time, and part of the payment goes into a travel fund that is held in escrow for the member. TransFirst, added last year, gives lab members substantially reduced Visa and Mastercard rates. Another benefit for members of Optical Synergies is a direct link to Quantum Learning, discounted continuing education for ABO credit on the group’s Web site. According to Bruce Brady, president of Optical Synergies, the site, which launched last year, has had “quite a few hits.” Lab members can share log ins with their ECP accounts. “Anyone can take the courses,” Brady said, adding that doing the courses online costs about half of what it might have if the individuals sought out CE on their own.
 
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Posted: Sat - April 1, 2006 at 09:31 PM        

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