Premium eyewear group Luxottica’s fleet management strategy, with its year-on-year decreasing cost of ownership, CO2 capping and progressive projects such as flexible car voucher schemes, puts many in the shade when it comes to corporate social responsibility. Fleet procurement manager Laura Gobbis talks with Michael Wood about the move to mobility management and how outsourcing has allowed strategic fleet projects to flourish.
Michael Wood: Can you give us a brief overview of Luxottica and your role within the organisation?
Laura Gobbis: Luxottica Group is a leader in premium, luxury and sports eyewear with more than 7,000 optical and sun retail stores in North America, Asia-Pacific, China, South Africa, Latin America and Europe, and a strong, well-balanced brand portfolio.
Proprietary brands include Ray-Ban, the world's most famous sun eyewear brand, Oakley, Vogue Eyewear, Persol, Oliver Peoples, Alain Mikli and Arnette, while licensed brands include Giorgio Armani, Bulgari, Burberry, Chanel, Coach, Dolce&Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Starck Eyes, Tiffany and Versace.
In addition to a global wholesale network involving 130 different countries, the group manages leading retail chains in major markets, including LensCrafters, Pearle Vision and ILORI in North America, OPSM and Laubman & Pank in Asia-Pacific, LensCrafters in China, GMO in Latin America and Sunglass Hut worldwide.
The group's products are designed and manufactured at its six manufacturing plants in Italy, three wholly owned plants in China, one plant in Brazil and one plant in the US devoted to the production of sports eyewear. In 2013, Luxottica Group posted net sales of more than €7.3 billion.
Global fleet procurement and management function is part of the corporate indirect procurement organisation that influences and drives fleet strategy for the whole Luxottica country network. Personally, I'm in charge of fleet procurement with global responsibility, except the US and Australia.
Tell us about the green fleet policy of Luxottica and what led to the company winning the International Fleet Green Award at Fleet Europe last year.
Corporate social responsibility (CSR) is one of the key pillars of the fleet strategy that Luxottica sustains together with Arval, our leasing partner. It consists of identifying our mobility needs, setting clear objectives and building our CSR-oriented approach. This effort ends up in very strong project activity every year, of which the most important are Green & Safe, Super Green and Lux Zero Waste.
Green & Safe includes the continuous work of identifying the most efficient cars based on our needs and expectations, it also includes our driver care programmes, such as car pooling, as well as developing IT solutions - video conferencing, for example.
The Super Green project covers mobility initiatives such as the introduction of electric cars in Luxottica's fleet or offering our employees the possibility to lease a small car for the city, with vouchers to be used for a bigger car when needed (for holidays for example).
The ability for a powerful, global execution of all the projects mentioned lies in Luxottica's 100% corporate car policy roll-out in all European countries. Furthermore, these initiatives contributed to the decrease of our CO2 emissions by 20% over the past four years.
The next challenge we see for the future is to capitalise on our experience and ensure we move a step further in exploring alternative mobility solutions, through a dedicated project.
What sort of vehicles do you have in your fleet? Are they as luxurious as your brand?
Luxottica has made the choice to work with a limited number of car manufacturers. The four selected offer a range of models wide enough to cover all our needs when building our car list while still concentrating our volumes with these preferred suppliers.
We regularly update our car list, which is harmonised across all European countries. The vast majority of models we include can be considered premium. This choice is mainly driven by having a TCO approach rather than a list price approach.
Could you outline some of your outsourced relationships (fleet management, leasing, telematics and OEM companies) and how you manage expectations?
The success of the implementation of a fleet strategy at international level is partially related to the empowerment of its suppliers at international level. Therefore, choosing the right partners with a strong qualification process up front was a key prerequisite in our fleet management project kick-off phase.
Based on our requirements, we selected market-leading international players - one operation leasing company, four car manufacturers and one short-term rental company. This gave us the opportunity to deploy our strategy in all Luxottica countries in a rather short period of time while ensuring a good service level and a controlled budget through a series of KPIs and reports.
The level of outsourcing has constantly increased over the years, with the ultimate step of implementing full outsourcing being taken in the last year. It consists of outsourcing all the operational and tactical tasks we used to do internally to Arval, our leasing partner, allowing us to concentrate on the strategic fleet projects. With regards to telematics, we believe such solutions should be part of wider, driver-related programmes that we're currently evaluating.
Working on a solid collaboration base up to a full partnership, as we currently have in place, gives Luxottica the chance to continuously optimise total cost of fleet, quality of service and leverage on the top level of market innovation.
What success have you had in reducing TCO and improving Luxottica's green footprint?
Luxottica needs to work strongly on TCO, as the size of fleet is drastically increasing year on year, going up 50% over four years. The car policy and a strong procurement focus on manufacturers' deals are the key drivers of TCO monitoring and control.
Luxottica's car policy is built around our TCO objectives and CO2 emissions capping. We're proud to consolidate our decreasing cost per vehicle - down 2% on average base year on year - together with an increase of capital fleet value, up 1.5%.
I'm pretty sure that, in the future, we will look at a new concept of TCO, the TCM (total cost of mobility), in order to build a complete workplace solution considering all methods of mobility, boosting smarter means of movement.
The evolution of fleet to mobility management has been a big topic for FDE in recent times. What are some of your mobility policies?
Driver mobility is one of the pillars of Luxottica's company car policy, and it is very important for us to keep focusing on best practices but also on innovating, and trying to anticipate the market and strategy deployment of all other companies.
Our main goal was the achievement of governance and equity in the management of the company cars through the Luxottica subsidiary in order to give our employees a unified car grid and level of service.
Our mobility initiatives include car sharing and car pooling projects, allowing our employees to commute from the Venezia Mestre train station or from our Milan HQ to our offices in Agordo but also offering possibilities of regrouping several employees on the same trip - with this all being done through a self-booking platform.
We have also worked on innovative ideas such as offering our employees the ability to order one city car and have a voucher for a bigger car for use at weekends.
How involved is the finance director in driving fleet policy and how do you collaborate with internal business partners?
Several key stakeholders are involved in driving Luxottica's fleet strategy. The participation and full endorsement of the chief financial officer is essential; the HR management approved the strategy arranged internally at procurement direction level. This cooperation facilitates the acceptance of the corporate topics and ensures that each project has the right 'sponsor' to be deployed within the group.
How do you see Luxottica's mobility strategy evolving?
Beyond consolidation of fleet and mobility current strategy, Luxottica's aim is fully focused on new project development. One of the main topics moving forward will be around driver safety and efficiency.
This will allow Luxottica to further improve safety, and leverage on innovative technology and features towards new optimisation opportunities.
In conclusion, I think it is no longer possible to dissociate car management from mobility management. The future will be a full package of mobility solutions rather than a company car. Luxottica will continue to work on mobility strategy, keeping environment, safety, cost and innovation as key topics to continue delivering great results in the category.