IET, Inc.
3539 Glendale Ave
Toledo, Ohio 43614

Case Study 2-10820

Want a refund on your labor?

IET delivered a true labor cost for an entire product line for an automotive supplier after a change in process specifications required a change in process production. The labor variance measured against the original quote to the automotive supplier yielded a price increase that was equal to $2 million in additional revenue to their business in 2010.

The Customer

An automotive plastics molding and paint supplier.

The Challenge

This plastics molding and paint supplier was given more stringent quality specifications by their customer which forced them to introduce additional value added steps in their process to meet those specifications. IET was brought in to measure the required labor across the entire product line to see how much labor costs increased with the new processing steps.

The Solution

IET performed all the required time studies from molding through final inspection of the paint line. By defining value added activities and non-value added activities, IET was able to clearly delineate between what the customer would be willing to pay for and what they would expect to be leaned out of the process.

IET summarized the new time studies and compared them to the time studies performed at the quoting stage earlier in the life of the product to show how much additional labor was introduced into the process with the more stringent quality standards. Because of the completeness and accuracy of the time studies and report, the customer agreed to increase the part price to more aptly reflect the labor required for production. This increase in piece price netted IET’s customer approximately $2 million in revenue in 2010.

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