Reduce Unique ICDs by Redesigning the Product or the Process
The objective of this activity is to reduce the number of ICDs by reducing the occurrence of an ICD in producing a unit of Output, or by reducing the number of separate ICDs used in the Output. A unique ICD is one of the key activities in the work center's contribution to the final product (O). It is separate and distinct from any other activity in the work center. For example, the fastening of a part onto a subassembly and a quality control check of the subassembly would be unique ICDs.
B. Redesign the process of producing the ICD or Output
Change the process used to produce the ICD or Output to eliminate activities.
2. Shift ICD to others outside company with no payment for their assistance
|1||2844||1986||A few years ago, Walgreen Laboratories realized the cost of carrying and managing inventory accounted for about 25% of its total inventory costs. So it decided to reduce its inventory levels by a third. It gave suppliers the choice to participate in a modified JIT program or get out. And, it requires suppliers to be locked into firm delivery dates.|
|2||2844||2004||Avon expanded its cosmetics business globally by rebuilding its manufacturing and transportation infrastructure from top to bottom. Dealing with a smaller number of suppliers delivered other benefits as well. In the process of standardizing bottles, Avon asked the suppliers for help designing new ones in the most cost-effective way. In many cases, Avon had to adjust its own approach so that suppliers could manufacture its products more cost-effectively. For instance, the company agreed to change its order patterns to reduce the suppliers' manufacturing setup costs.|
|3||3711||1992||Next year, component maker Android Industries will begin moving machinery into a GM parts factory. They'll take charge of 20 workers at the plant to show them how to assemble doors. GM will continue to pay the workers, but Android will run that part of the factory.|
|4||5600||1993||Designs benefits from Levi's marketing muscle. Levi spent $80 million on advertising last year, while Designs shelled out less than $2 million.|
|5||5900||1995||Wal-Mart saved on costs by forcing suppliers to replenish inventory only as it was depleted.|
|6||5945||2004||Suppliers Mattel Inc., Hasbro Inc., Leap Frog Enterprises Inc., and Lego AG are releasing a set of holiday toys to be sold exclusively at Toys 'R' Us stores – and footing the bill to advertise them on television. Wal-Mart dislodged Toys 'R' Us from its perch atop the toy business in 1999, largely by underpricing the competition. Analysts estimate that Wal-Mart currently commands 25% of the toy market, compared with 17% for Toys 'R' Us, now in second place. Wal-Mart's exclusive toys this season include Mattel's Disney Princess ride-on vehicle and a West Coast Chopper remote-controlled toy, which the retailer commissioned directly from a manufacturer in Asia. Wal-Mart's "Shrek 2" DVD will have an exclusive feature, a five-song CD.|
|7||6159||2005||From 1999 to 2001, Acosta went through a series of five roll-up acquisitions, which resulted in multiple formats for revenue recognition. With help from GE's experts, revenue processing soon took 15% fewer man-hours, while sales data became more precise.|
|8||7372||2004||Consider the development of Linux, the other operating system. In 2001, the last time someone counted, Linux had more than 30 million lines of source code, representing something like 8,000 person-years of development time. Had this software been developed by well-compensated software engineers, the bill would have come to roughly $1 billion.|
|9||7372||2005||IBM is allowing open-source projects to use its intellectual property free of charge in an effort to fend off Microsoft Corp. and its Windows monopoly. IBM pledged to make 500 of its software patents, valued at about $10 million, freely available to open-source software projects such as the Linux operating system and the Apache Web page server software. In a strategy it calls “collaborative innovation,” it shares some of its intellectual property, hoping to bolster open-source alternatives to Windows, such as Linux. Such programs are shared by thousands of companies and tens of thousands of programmers. It helps IBM create a non-Microsoft ecosystem. By selling a server with Linux, IBM boosts chances of selling databases, application integration software, and services. Big Blue is also creating “innovation networks.”|
|10||7375||2005||Craigslist is a threat to newspaper classifieds as it becomes more and more popular. Craigslist is based solely on the idea of providing its customers the service they ask for, and not on the idea of becoming insanely wealthy. The company earned around $20 million in revenues in 2005. It makes money by charging employers in three cities a fee for listing jobs: $75 in San Francisco and $25 in New York and Los Angeles. Total annual expenses – salaries, rent, and about 100 server computers – don't run more than $5 million. All the listings are provided free by the users.|
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