Candid conversations between VCPN’s Ed De Gennaro and leading optical executives about their product strategies.

Don Oakley joined Vision Services Plan (VSP) in September 2006 as Vice President of Supply Chain with more than 30 years of experience in international marketing and operations. In his current role as President of VSP Optics Group, Don is responsible for VSP and joint-venture labs as well as the Ophthalmic Supply Chain and Services Division, which includes design of strategic business systems to manage VSP’s supplier network, product flow, and logistics. Here, he talks about how VSP serves today’s eyecare professionals (ECPs) with new technologies and optical products.

Ed De Gennaro: How is the company continuing to fulfill its original mission?

Don Oakley: Our mission is helping millions of people see better and achieve their potential, and we think that happens best in a private practice environment. That part has not changed at all, but how we bring patient flow and facilitate products and services to ECPs has changed because our industry has changed. We have four lines of business now instead of the one original vision care business, and I think they represent major elements of supply chain fulfillment.

EDG: How has VSP evolved over the years?

DO: VSP started with a single lab in Sacramento, CA, in the ‘70s and the second one was added in 2003 in Columbus, OH. There wasn’t enough positional strength to support the network that had evolved as VSP Vision Care. We now have seven wholly-owned labs, and if you get inside one of them, you’ll see that they’re state-of-the-art technology centers. We’re really committed to digital processing because it gives a great amount of flexibility from a supply chain perspective, and it accommodates a patient’s Rx to create beautiful eyewear with techniques only available through digital technology. Many of our finishing departments have automated inspection systems connected to robotic edging systems.

EDG: Do you intend to expand your lab network?

DO: I said in the middle of 2008 that we were going to grow about two to four labs in the foreseeable future and that has proven to be correct. We think a unique combination of VSP technology centers and partner laboratories that we call our contract laboratory network combine wonderfully to provide both the high-quality products and regional services our doctors demand. We will grow to a limited extent, but we also see a major role for the independent labs in our business. We have sufficient resources between ourselves and our contract laboratory network to fulfill what VSP envisions for the future. I believe that at a low point in 2006, we had 55 million covered lives and it’s probably bordering 58 million now, and that growth was absorbed by our labs and our contract laboratory network.

EDG: What new lab programs are you planning?

DO: Right now, it’s all about UNITY® Performance Optics and the capability in place at our seven wholly-owned labs and our Dallas technology center. UNITY is a private digital lens brand that VSP has put into both the private and the insurance marketplace. Since it is our private lens brand and we’re able to hold both the click fee and cost structures down, the savings we accrue are shared with the practice. If a doctor dispenses a UNITY lens with an AR (anti-reflective) treatment on it, that practice can receive up to $25 in savings. It’s a way to help practices become more profitable while getting into the digital space. We also offer VSP Reveal® Freeform lenses which are co-branded with Carl Zeiss Vision and provide great value to practices.

EDG: What else might be coming down the pipeline?

DO: We are currently looking at and piloting in-practice technology, including aberrometry, physical measurements, and the use of iPad or mobile technology. Think of it as a high-tech eye experience…a high-tech refraction followed by a high-tech dispensary experience where the same technology flows through the practice. The intent is to have the patient say, “Wow, I’ve had a great clinical and dispensary experience, and when the eyewear arrives, I know I’ll see better because they’re going to be made just for me, and they’ll fit perfectly.”

EDG: Do you see e-commerce as a threat or an opportunity?

DO: Both. A threat unaddressed is a threat; a threat addressed is an opportunity. We’ve come into that space with a platform called “Eyeconic” that has a lot of capabilities and we’re manifesting that capability as eStores for independent ECPs. Right now, VSP doctors with an eWebExtra Web site from Eyefinity can open their own eStores, free of charge. The eStore is an online extension of the private practice’s brick-and-mortar dispensary, and allows their patients to shop online whenever they want for contact lenses, prescription eyewear, and sunwear that can be delivered right to the patient’s front door. This way, the practice has access to more products than are available in that practice’s office and the doctor can control the entire operation.


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