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 Capital ICDs:
Match work center inventory to pace of requirements
|1||3711||2004||In the past two years Lexus has persuaded its 207 U.S. dealers to spend $750 million of their own money upgrading their stores. They built clean service bays and thousands of square feet of showroom space appointed with espresso machines and grand pianos. In 2003 Lexus sold 260,000 vehicles in the U.S. which is 19,000 ahead of the number two BMW. Lexus has perfected a model that revolves around a simple proposition: Pamper your dealers and they will pamper your customers. Lexus manipulates its business to accommodate dealers. Lexus keeps the number of dealerships at a minimum so dealers sell more vehicles per store than any other brand but Toyota. Lexus has never reduced a dealer margin on a slow-selling vehicle by lowering the listed price or raising the price dealers pay. The company varies production to keep inventories low which reduces the pressure on dealers to lower their prices. Every quarter Lexus and its dealers have a meeting where they talk about what is selling, in which colors and with what options.|
|2||3714||2004||Autoliv reprocessed its factory to fend off stiff competition in airbags. In 1998, it embarked on its education in the Toyota production system with plenty of room for improvement. Its factory in Ohio, for example, had its inventory operation in a giant warehouse serviced by automated guided vehicles (AGVs), but the operation was inflexible and unwieldy. Then it replaced the AGVs with forklifts, but it was never sure how much inventory was needed at the assembly floor. Autoliv replaced the massive crates with small plastic boxes called totes and started using golf-cart-sized tugs. That meant more operators would make more trips, carrying 55 totes in a 45-minute period, and stay in closer sync with production.|
|3||5331||2003||Dollar General regularly and ruthlessly reviewed every stock keeping unit. On average, it replaced 150 to 200 items yearly. The company used sophisticated information technology at all its stores to accelerate the checkout progress and to manage inventory scrupulously. And it continually tweaked its operations. For instance, the former CEO, doubled the amount of space in the company's distribution centers, thereby reducing the number of runs the retailer's drivers would have to make, and called for a redesign of Dollar General's stores. They now boast better merchandise- display systems, wider aisles, and a brighter; cleaner look.|
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