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.
4. Reduce movement of an Input (People, Purchases or Capital)
Reduce movement of both people and ICDs:
Place functions closer to supplies
|1||2300||2004||Luen Thai Holdings Ltd. is building a supply-chain city, which is being developed as a one-stop base of operations for clothing makers and customers such as Liz Claiborne Inc. that now work in far-flung offices and factories around the globe. Bringing together everyone from fashion designers to fabric suppliers and button-makers in one place presents an unusual opportunity in the industry. Instead of having 100 people spread all over the world doing the same job, the new supply-chain city will enable two companies to reduce staff to 60 people in China, concentrating all functions closer to the factory floor. By moving all but the most critical designers and trend spotters in Asia, the company can dispense with the tedious back and forth, slashing precious weeks off production times and getting up-to-minute fashions into stores sooner.|
|2||2452||2006||Demand for prefabricated houses is on the rise as traditional homes become more expensive to buy and build. Prefab homes are 10% to 25% cheaper than traditional homes, not including land. What's more, as interest rates rise, household budgets will get squeezed, and some owners will begin to trade down to cheaper manufactured homes. Clayton Homes, along with Champion and Fleetwood Enterprises, together control around 80% of the $7 billion market.|
|3||2819||2004||Players in the basic chemical industry distinguish themselves by processing raw materials into basic or specialty products for industrial use. The four main chemicals include: polyethylene, styrene, ethylene glycol and the chlor alkali group of chemicals. This industry accounts for about 7% of all energy consumption in the U.S., making it highly sensitive to energy prices. Companies are working to cut costs by locating plants near feedstock, like the Gulf Coast or in the Middle East.|
|4||2844||2004||Avon expanded its cosmetics business globally by rebuilding its manufacturing and transportation infrastructure from top to bottom. After creating a common database, the next critical step was to redesign the supply chain in a way that made sense operationally. Avon kept a manufacturing plant in Germany but consolidated other production at its plant in Poland. That expanded manufacturing capability in the heart of Avon's emerging markets. And it delivered major cost efficiencies, mainly because of the lower cost of labor. Avon also created a centralized inventory hub in Poland, near the production facility, to serve the company's European branches.|
|5||3334||2007||As prices for energy increase, aluminum companies are working to secure dedicated power sources, sometimes selling off divisions to free up cash. They are doing so by buying local power plants or shifting production from Europe and North America to remote parts of the world where energy is cheaper and in greater supply like Siberia and Iceland.|
|6||3663||2004||Over the past decade, Pioneer Corp. has shifted 62% of its production overseas, mainly to China, reining in costs. It will consolidate manufacturing in Shanghai over the next six months and source key parts locally instead of shipping them from a plant further inland. The company is also cutting costs across the board by reducing the number of parts it uses, and it's continuing to look for cost savings through technical innovation.|
|7||8062||2007||As the financial and human costs of medical errors become apparent, some hospitals are working to improve their system and reduce costs. Analysts at Cincinnati Children's found that prescriptions traveled 2,100 feet before they were ready for delivery. The pharmacy was redesigned to reduce the distance pharmacists must travel. The turnaround time for non-urgent bedside medicines was reduced from 23 hours to 5 hours and the number of medicines that had to be discarded because patients had already been discharged was reduced by half.|
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