This excerpt taken from the LUX 6-K filed Jun 4, 2008.
Alongside Quality, Research & Development is another key activity for improving response to market demands, especially in the premium and luxury segments. Work proceeded on a number of projects in this area in 2007.
The development and renewal of the entire system of requirements forecasting, production planning and production progress monitoring brings about a substantial reduction in the time elapsing between arrival of an order and delivery of the product to the store.
To improve its response to an increasingly dynamic market that tends to shorten the average life cycle of models, the Group in 2007 focused on coordination between the engineering and product departments, the samples factory and the Italian and Chinese manufacturing facilities.
Thanks to these activities, the Group has improved its capacity to plan new collection launches. The product department has precise knowledge of the engineering departments capacity to make new models for a given season and can more effectively coordinate its selection and launching of new collections, also with external stylists and using either internal production or external sourcing.
In recent years, modelling has showed an increasing preference for plastic temples, even in metal models. As a result, plastic temples have gradually become more elaborate, with metal or micro-forged decorations, rhinestone and other increasingly diverse and sophisticated materials (mother-of-pearl, straw, leather, etc.). In some cases the temple is the richest and most expensive part of the model, becoming a sort of product within the product. This has led the Group to more and more external sourcing of temples, in terms of both manufacturing and ornamentation.
Research & development of both processes and materials continued throughout the year. A group of engineers was formed to work exclusively on research and a series of projects were launched in collaboration with major Italian universities.
On the process front, research focused mainly on the automation of certain key phases in production and on identifying machinery employing new technology capable of delivering improved quality, process consistency and reduction of material losses; for example, new molds for lens production at Lauriano, new pantographs for acetate production at Sedico, robot systems to apply rhinestones, new lasers for cut-outs and brushing, new digital prints for logo application, etc.
Materials research activities continued along the following lines:
· improvement of quality in general to reduce production waste;
· application of nano-technology in surface finishing processes for metals and polymers to solve problems such as the degradability (stratification) of injection molded plastic;
· use of nano-technology (MIM and micro-forging) in processes that enrich materials and improve mechanical and aesthetic product characteristics.