ABB Concise Optical Group

Vision for the future┬áAs Keith Regan learns, contact lens distributor ABB Concise is adding e-commerce and one-day delivery to its services to free doctors to spend more time with patients while staying profitable in a competitive marketplace. Through organic growth and acquisition, ABB Concise Optical Group has grown into the largest distributor of contact lenses and related products in the United States, with a distribution network that enables next-day delivery to thousands of independent eye care professionals. Though contact lenses fall into the necessity category for most people, the business has not been immune to the recent economic slowdowns. ÔÇ£What ends up happening is that people who might have been wearing lenses for two weeks might stretch it out to three or four, and that reduces the amount of times they go to doctors and order lenses,ÔÇØ says Brad Weinbrum, president of the Coral Springs, Florida, company. At the same time, competition is also increasing. Big-box stores such as Wal-Mart have entered the market, and many lens wearers now use the Internet to buy directly, often at a discount. Still, ABB managed to post strong growth in the first quarter of 2009, with sales rising 11 percent year-over-year, ahead of the industry trend, which Weinbrum attributes to the companyÔÇÖs efforts to constantly increase the value proposition they offer eye care professionals (ECPs). Many of the companyÔÇÖs ECP customers now use ABBÔÇÖs online ordering system, which allows doctors to set up their own e-commerce sites that are operated entirely by ABB. The YourLens.com system handles all sales and fulfillment, collects payments and can utilize a doctorÔÇÖs own promotional pricing schedule. Doctors receive a monthly check and customized Web activity report. ÔÇ£ItÔÇÖs a way to keep the doctor in the game. People have to go to their doctor to get a prescription for their lenses anyway, so they want to keep that relationship. Instead of taking that prescription and going to a third-party site, they can now order through their own doctorÔÇÖs Web site,ÔÇØ Weinbrum explains. In most cases, those orders can be processed at an ABB distribution center and shipped to the patientÔÇÖs or doctorÔÇÖs door in less than 48 hours. ÔÇ£At least a third of orders are placed before 9:00am or after 5:00pm or on the weekends, when private doctors are not open. This gives them a way to offer that convenience to their customers without having any administrative work or handling of inventory.ÔÇØ At the same time, ABB also works with doctors to reduce their transactional costs and paperwork demands, something it does in part by stocking more inventory than its competitors, reducing the need for doctors to turn to other vendors, which in turn can boost back-office costs. A typical ABB customer that processes 1,000 orders a year can save as much as $4,000 in administration costs alone, the company says. ÔÇ£We try to help them with things that are not their expertise. Taking care of patients and figuring out prescription needsÔÇöthatÔÇÖs what they do best, and thatÔÇÖs what they got into the business to do,ÔÇØ Weinbrum adds. ÔÇ£They can let us handle the rest and free up more time to see patients and grow their businesses.ÔÇØABB has also given doctors access to direct online ordering, with customers able to log into the ABB Web site and interact directly with inventory control systems. To be able to meet the demands of next-day deliveriesÔÇö80 percent of the US is serviceable by next-day delivery to doctorsÔÇÖ offices of many productsÔÇöABB has worked hard to refine its distribution network, investing heavily in automated technology such as warehouse management system software and warehouse carousel systems that boosted order-pulling rates from a range of 80ÔÇô100 per hour to 300ÔÇô400 per hour. ABB also drove additional efficiencies through order consolidation, a move that took on added urgency when fuel costs spiked in 2007 but remains important as the company seeks to keep its costs low so it can help its customers protect their own profit margins. ABB grew through acquisitions, and Weinbrum says more are likely. The company has refined the process of integration to the point where it is confident it can take on additional takeovers, with opportunities likely to arise as some businesses struggle to adapt to new economic realities. ÔÇ£The way we look at it is that whether itÔÇÖs a small or a large merger, you have to take the same steps. Whether itÔÇÖs a $5 million deal or a $500 million deal, the steps are the same. WeÔÇÖve learned from each time weÔÇÖve done one, and we always do a very thorough post-mortem to make sure that whatever we do wrong we do not do wrong again in the future.ÔÇØThe company has the capacity to grow more through acquisitions, with its technology investments helping to keep its workforce stable and employees ready to tackle new challenges. ÔÇ£All our distribution centers are ready and able to take on additional capacity if we get that opportunity,ÔÇØ Weinbrum says.The industry should get a boost from some upcoming product launches from manufacturers, with bifocal and multifocal lens technology improving, new lens materials and shapes offering more comfort for young and old patients alike, and even lenses that could contain pharmaceuticals for patients with more serious eye conditions. ÔÇ£New products are the lifeblood of our industry, and weÔÇÖve got some exciting things on the horizon that could help the entire sector and that weÔÇÖll be ready to make sure we benefit from tremendously.ÔÇØ  ÔÇô Editorial research by Jim Rose