ProVision’s plans to establish a central distribution service have been met with enthusiasm by optometrist members and many of its suppliers.
The distribution service will be run out of Sunshades Australia’s wholesale facility.
Steven Johnston, CEO at ProVision, said the new distribution facility will manage distribution of over 1,000 of the group’s best selling frames and be coupled with a single portal for online ordering. He said ProVision members will continue to have access to all existing ProVision suppliers and all of their products.
“Members will be able to order all of their frames through this online portal but only orders for the 1,000 or so best selling frames will be managed and distributed from Sunshade’s facility,” he said. “All of their other frames will continue to be despatched from the originating supplier.”
Members will be able to order all of their frames through this online portal but only orders for the 1,000 or so best selling frames…
When an optometrist places an order, the database will determine whether the order is to be despatched from Sunshades or direct from the originating supplier and direct the order accordingly. Orders directed to Sunshades will be sent to the optometrist or their preferred supplier laboratory of choice for lens fitting. Optometrists will continue to be invoiced by the originating wholesaler.
12 Months in the Planning
According to Mr. Johnston, the original idea for a centralised distribution model “germinated” in January last year when the group identified that the current supply chain wasn’t efficient.
“We have many, many customers dealing with many, many suppliers – there’s no economies of scale, no aggregation of demand for independents… and meanwhile big companies are leveraging on their size and scale.
“When we initially suggested a centralised distribution centre system as a viable solution, member optoms asked why we needed it – now they are asking how they can be involved.”
“Hopefully this (new distribution system) will work really well for our ProVision members and once it’s rolled out, we will make it available to other independents in Australia as well.
Protecting Intellectual Property
Ten of ProVision’s 19 frame suppliers have signed up to the new distribution arrangement, which Mr. Johnston says has been designed to protect the intellectual property and customer information for each supplier.
“We’ve tried to put in place systems to protect suppliers’ intellectual property – for example, all frames will arrive at the warehouse boxed and the only visible information will be a barcode – you won’t even be able to see the frame colour. This means Sunshades staff will be working with minimum data to pick pack and despatch products.” Additionally, he said, every supplier will have a specific online entry portal to ProVision’s database, so no competitive data will be accessible by either Sunshades or other suppliers.
He said the new distribution model will deliver benefits for ProVision suppliers too. “Our centralised distribution service will help suppliers leverage off one single delivery system and keep our suppliers’ best sellers on the shelves in practices.”
Mr. Johnston said an independent consultant was engaged to help ProVision determine the best distribution model going forward. That consultant recommended ProVision “partner with a business that understands the product we are working with”. He said having looked at the options, the consultant recommended Sunshades because of its superior warehousing set up, systems and cost structure.
