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.
6. Reduce use of Purchases and Capital ICDs
Reduce Purchased ICDs: Use Prople or components requiring less Purchases:
Lower transportation expenses
|1||2844||2004||Avon expanded its cosmetics business globally by rebuilding its manufacturing and transportation infrastructure from top to bottom. Avon's new end-to-end view also changed how the company works with suppliers. The company used to seek out the least expensive material and buy in large volumes to keep costs low, but that didn't necessarily mean the lowest price equaled the lowest total cost. Today, Avon buys most of its inventory from suppliers close to its factories in Poland and Germany. Although the company may pay a slightly higher price on a per-unit basis, managing fewer relationships with more flexible, responsive suppliers resulted in a lower cost.|
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