In the ophthalmic industry, known for its decentralized manufacturing and distribution structure, it takes something special to get noticed. Creating quality products is important, but creating innovative solutions becomes paramount. Walman Optical was founded in 1915 by a jeweler named J.A.L. Walman. Throughout the company’s 86-year history, the jewelers’ tradition of attention to quality and details has been a continuing factor in the company’s success.
So, too, has the company’s clear eye on fashion. Glasses have evolved from “Men don’t make passes at women who wear glasses” to become true fashion statements — even to the point where many people wear frames with no prescription at all. Contact lenses have become commonplace in a variety of styles (including bifocals) and colors. New technologies have brought scratch-resistant coatings for plastic lenses, eyeglasses that darken to sunglasses’ colors when exposed to light, and anti-reflective coatings that allow for improved vision while almost making the lenses disappear.
Walman’s Minneapolis headquarters houses three separate business units in addition to administration, personnel and finance: Ophthalmic lens processing, contact lens processing and distribution, and frame distribution are all located at the headquarters. Within five miles of the headquarters are three other company units — the Instrument Division, Ultra Optics Company and the Housing Systems Division.
Walman also has 22 separate locations that process ophthalmic lenses and seven contact lens distribution and processing centers, situated within a rectangle stretching from Seattle to Las Vegas to Montgomery, Ala., and up to Baltimore.
The Three O’s
As the industry has evolved, so, too, has the marketplace in which Walman’s products are sold. The target customer is a member of what the company calls the Three O’s: opticians, who dispense eyewear; optometrists, whose expertise is in the eye and refraction; and ophthalmologists, who specialize in eye pathology and surgery.
According to Marty Bassett, the company’s president, Walman’s sales are currently at about $136 million annually, compared to $52 million just six years ago. The best part of that growth is that all the employees get to share in the success, as Walman is a 100 percent employee-owned company (ESOP). How did the company achieve such growth in such a highly fragmented market? “Helping our customers be successful is how we go to market,” Bassett says.
Walman stands behind its products and delivers quality. “We have unlimited no-fault warranties on products, we do in-office education on both product and business strategies, and we have experts on staff who can answer just about any questions our customers might have,” Bassett says.
Plus, the lenses the company produces are the top of the line. “I use the analogy that in the department store business, we’d be a Nordstrom’s,” Bassett adds. “We make quality products, deliver quality service, support it with unbeatable warranties and rely on a knowledgeable staff.”
Prescription for Quality
Walman is a job shop, crafting every prescription to the specific needs of the individual. According to Bassett, the process starts with a lens, 68 to 76 millimeters in diameter and looking something like a hockey puck. This lens has a known front curve; computer technicians then calculate the back curve needed to arrive at the power for the prescription.
“The first step in the process is to generate a curve,” says Bassett. “In the olden days, we used diamond-plated wheels to mill the curve. Today, we work with the same high-speed, three-axis CNC (computer numerically controlled) mills typically used in the metalworking industry, but modified for processing lenses. We have 21 processing centers with about 30 mills in total, with each mill representing an investment between $35,000 and $80,000.”
Once the curve of the lens has been generated, the lens goes through two to three steps of smoothing and polishing. “At that point, we basically have a hockey puck with prescription power,” Bassett says. Next comes finishing the lens. This includes shaping the lens to fit a frame; adding a color or tint, or an anti-reflective or scratch-resistant coating; polishing the edges; or a variety of other finishing processes. Every lens, ophthalmic or contact, is then inspected to ensure compliance to the original prescription. Finally, Walman inserts it into a frame and ships it out.
Contact lenses are also an integral part of the Walman equation. The company distributes soft lenses, but rigid-gas-permeable (RGP) lenses are manufactured on site. The contact lens market accounts for about 15 percent of the industry’s overall sales. While RGP contact lenses only make up about 15 percent of the total contact lens market, they represent almost 50 percent of Walman’s contact lens sales. Even with the advent of soft contacts, RGP contacts will continue to exist due to the fact that they contribute to better vision and improved eye health, compared with the soft lenses.
Making contact lenses is not so different from making eyeglass lenses. “The process is similar to the surfacing process for the ophthalmic lens, except we start with a ‘button’ that’s 12.5 millimeters in diameter rather than the ophthalmic lens the size of a puck,” Bassett notes.
Using a CNC diamond lathe, Walman’s technicians first cut the back curve on the button to fit the shape of the eye. They then cut the front curve, which becomes the power curve. This part of the process is opposite from the ophthalmic lens where the back curve is shaped as the power curve.
Vision for Opportunity
In addition to its core business, Walman is constantly updating itself to match the needs of the ever-changing ophthalmic industry.
Walman also functions as a distributor for ophthalmic instruments and frames. The Instrument Division can supply virtually everything needed to set up an office for dispensing or refracting — from the screwdriver to the mirrors to the furniture to the instrumentation. Walman is also one of the biggest distributors of frames in the country, with locations in Minneapolis and Baltimore. Another division, Ultra Optics Company, makes and distributes machinery and proprietary and patented chemistries that allow similar businesses to apply a scratch-resistant coating to the back side of a lens.
The Ultra Optics business grew out of a need that emerged as the industry began a rapid evolution some 30 years ago. Bassett says, “The ophthalmic industry has gone from almost 100 percent glass to about 94 percent plastic over the last 30 years. The original plastic used was called CR-39, a registered trademark of Pittsburgh Plate Glass, now PPG.” Since then, a variety of higher-index plastics have become available that allow for lighter and thinner lenses. “All of these plastics are much softer than CR-39 plastic, and come from the manufacturers with scratch-resistant coating. When we scrape off the backside to do our magic, we have to re-apply a scratch coat. And that’s the basis of the Ultra Optics business. Today, Ultra Optics enjoys about a 70 percent share of that market,” notes Bassett.
A Business in Focus
With its recent unprecedented growth, handling the complex distribution network is a challenge the company is meeting head on. “We look to integrate the supply chain from manufacturing through distribution,” Bassett says. “Just recently, we bought our first contact lens manufacturing business, so we’ve become both the manufacturer and the distributor. We have also just recently installed two anti-reflective coating units from Zeiss Optical, where we used to send the prescription to subcontractors. Now we can control the process from start to finish.
“We’re also finding new ways to market our product, including a new program for contact lenses where we become the ‘1-800-business’ in that we distribute the product as a 1-800-business would, only on behalf of our doctors rather than directly to consumers.” The way it works, Bassett explains, is that the doctor first establishes the products to offer and the prices to charge: “In a service we call Express Optical, we warehouse, ship and bill the patient on his behalf and then give him his margin. So we become the middleman on behalf of our customers, thus allowing them to compete more efficiently.”
Walman’s strategy continues to adapt to the ophthalmic industry’s needs, and that’s the measure of success for the Midwestern manufacturer. Meanwhile, staying close to its customers while supporting the local community and investing in new technologies continues to be Walman’s approach to continued success in the new millennium.