This case study is an example of the product improvement and cost savings a safety glasses provider(referenced as “Service Provider” for the purposes of this case study) generated for a large automotive supplier (referenced as “Company A” for the purposes of this case study).
This case study outlines the following information:
- Company A Details
- Prior Eyewear Program Details
- Service Provider
- Billing Procedure
- Cost Savings
Company A Details
- Company A is an automotive supplier headquartered in Michigan, USA.
- At the time of this case study, Company A had:
- 8,761 employees that needed safety eyewear at work.
- 40 plant
- 40 different eyewear programs developed by each individual plant manager and safety director.
- A cost of $1.3 million per year for employee safety eyewear.
Details of Company A Prior Program
- Company A made each individual plant manager and safety director develop their own safety program. As a result, all 40 plants had their own eyewear program, creating 40 different price lists, programs and providers.
- This fragmented program caused issues for Company A due to:
- Lack of standardization within the safety prescription eyewear program, leading to unequal program benefits from plant to plant.
- Confusion for workers who transferred from one plant to another, because each program was different and allocated glasses at different times.
- Inability to control costs because each plant had a different provider for safety prescription eyewear. Therefore, they lost their bulk buying ability.
- Duplication of work and inefficiencies because each plant manager and safety director had to allocate the providers, programs and price lists.
- Loss of time for safety directors or plant nurses to manually check eligibility for new glasses for every worker, as well as manually process each invoice.
Prior Safety Eyewear Program Details
Because each of the 40 plants had their own safety eyewear programs, there were great differences from plant to plant in terms of what was provided to employees, including the following:
- Some plants gave employees permanently attached sideshields, while others provided clip-on sideshields.
- Each plant provided a different set of frames for employees to choose from. (Example: Plant X provided 3 frames. Plant Y provided 10 frames. Plant Z provided 43 frames.)
- The frequency for worker eligibility to obtain new safety eyewear varied from plant to plant.
Prescription Safety Eyeglass Program Solution: Standardization
When Service Provider implemented a safety eyewear program for Company A, they unified the program across all 40 plants, providing:
- A standardized price for the entire eyeglass package and program.
- A standardized high-quality prescription frame selection of 60 frames.
- Standardized eligibility requirements for the frequency in which employees can get new prescription safety glasses.
- Approved providers in close proximity to each plant. (Employees could get their eye exam at the doctor of their choice and get the script/order fulfilled at one of the approved providers. These providers were each given the 60 safety frames available in the program for employees to review and try-on.)
To easily manage employee eligibility for new safety glasses, Service Provider initiated their proprietary Eyeglass Eligibility System. Here’s how it worked:
- Service Provider provided a letter with instructions for Company A to distribute to employees that included: details on how to determine eligibility, frame selection options and pricing, how to get a prescription, and how to place an order.
- Employees determined their eligibility for a new pair of safety glasses by phone or by visiting a specific page on the Service Provider’s website.
- Via Phone: Employees called the phone number provided and follow the prompts. They received either their eligibility status or a date when they were eligible for new glasses.
- Via the Website: Employees went to a company-specific web address, entered their employee ID number and then received either their eligibility status or a date when they are eligible for new glasses.
To reduce the administrative time for staff and the safety director at each plant, a standardized billing procedure was created with the following process:
- Each plant had a safety eyeglass credit card that was used for eyeglasses only.
- At the end of the month, Service Provider would send a statement of all the purchases to Company A, along with an invoice for each person so each plant safety director could match it to the statement.
- Once the plant safety director looked at the invoices and statement, he/she could approve the credit card to be processed.
How did Service Provider’s plan help Company A?
- The Standardized Plan helped keep a seamless and consistent offering for employees (no matter how much they moved from plant to plant).
- Standardization saved each plant a lot of costs by eliminating the time burden on the plant safety directors and plant nurses for determining eligibility for every employee.
- The new Billing Process also saved Company A from the costs associated with their previous billing process. The credit card and monthly statements from Service Provider eliminated the time spent by staff inputting and processing each invoice, as well as the approval processes for every frame by administrators. Company A also had a complete record of their safety eyeglasses for each month and year.
Service Provider Program Solution: Savings
Cost Savings Per Pair of Glasses
- The average cost per pair of glasses before Service Provider: $148.39
- The average cost per pair of glasses with Service Provider: $81.18
- The average savings per pair of glasses: $67.21
Cost Savings Per Year
- Estimated annual usage: 8,761 pairs
- Yearly costs before Service Provider: $1.3 million
- Yearly costs with Service Provider: $711,131
- Annual savings: $589,000