IET, Inc.
3539 Glendale Ave
Toledo, Ohio 43614

Case Study 2-04407

Take the guesswork out of estimating

By creating a better way to develop and maintain standards, IET dramatically improved this company’s ability to prepare accurate cost estimates for customdesigned products and gave managers the data they needed to enhance direct labor productivity in daily operations by 30%.

The Customer

A diversified manufacturer of products that include retail store fixtures, displays and shelving as well as office furniture components.

The Challenge

Product life cycles are relatively brief in this industry so the product mix changes continually. The client had 400-plus finished goods SKU’s in its system with new products being added every day. Cost pressures were intense, too. The current production standards were unreliable and the plant found itself losing money on some jobs because the initial cost estimates did not reveal the true cost of manufacturing. They needed an easy-to-maintain system that guaranteed accuracy for new jobs and they needed to reduce labor costs to win more business.

The Solution

IET engineers dissected every operation in the manufacturing process. They established relationships between product features (e.g., physical dimensions; number of boards, cleats, drawers, assembly components, etc) and standard processing time using stop watch time study and statistical analysis tools.

These standard data relationships were codified in a menu-driven database model that employed the same product data found on a cutbill generated by product design. Now, plant estimators can easily create accurate labor cost estimates for anything the company produces and production managers can plan and measure labor productivity with confidence.

Using the improved standards, IET demonstrated that the company’s old standards had led to over-staffing in all production departments. IET provided a crewing plan that reduced direct labor by 30%. The database model, which delivered results with +/- 10% accuracy, allows product estimates to be completed within minutes.

© 2015 IET, Inc.   Measure · Simplify · Standardize · Realize