Reduce the Units of Input Not Producing Output
Reduce units of Input (I) available but not producing Intermediate Cost Drivers
(ICDs). This action makes Input levels more directly variable with the quantity of the ICD by reducing the amount of the available Input that is wasted or idle. For example, an employee (I) might produce one subassembly (ICD) per day. During that day, the employee spends a total of one hour waiting for parts for the subassembly. If the Company could eliminate that one lost hour of the employee's work day by providing parts in a more timely manner, the Company could reduce the number of employees (I) needed to produce the same subassembly (ICD) by 1/8th.
A. Assist Input in increasing ICDs.
Train employees in efficiency. The company may incur costs to train employees in the expectation that these expenses will result in even greater cost savings through better efficiency.
Provide paid training:
On business economics
| No. | Industry SIC | Year | Notes |
| 1 | 1382 | 2004 | Since BJ is focused on pressure pumping, it has led the industry for the last 10 years in technical development. The company benefits from good management as well. BJ's team was one of the first in the oil field services sector to emphasize return on capital. It also has worked to educate field managers to take only contracts that meet the right returns. As a result BJ is one of the few companies that reports business it has turned down. In the third quarter, it turned down about $13 million worth of business. |
| 2 | 4213 | 1998 | In the third quarter of 1997, the Company initiated an ongoing training program for all of its employees with the aim of improving productivity and reducing turnover. American Freightways estimates total costs of a penny per share per month for training. |
| 3 | 6300 | 1992 | Allstate has employed a training system by Lev Landa that employs a step-by-step diagram of a decision-making process for employees to learn. In Allstate's data-entry operation, productivity and quality jumped 75% and 90%, respectively. |
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