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.
8. Accept risk of lower profits
Accept the potential of higher costs:
Do fewer quality checks
|1||1311||1990||Oryx will save $70 million in operating costs by eliminating rules, procedures, reviews, reports, and approvals that had little to do with finding more hydrocarbons.|
|2||3861||1987||Kodak is eliminating product inspectors and making each worker responsible for quality before passing the work on to the next stage. Since its inception in 1983, this approach has reduced products defects by 300% and production costs by 70%.|
|3||5511||2007||Eliminating negotiations over car prices can save money. Car dealers do not have to advertise the sale of the week, they can also cut back on well-paid managers who must approve deals. Salespeople in haggle-free dealerships are paid an hourly wage plus bonuses for volume sales. This translates in higher wages than those of commissioned sales people.|
|4||6300||2004||One of Progressive's big successes was the pioneering move away from underwriting to pricing. Underwriting means risk acceptance or rejection at a given price. On the other hand, pricing means that there are no bad risks, only bad rates. This was a radical idea in the early 1990's but has since been copied.|
|5||6311||1991||A major insurance company increased productivity of claims-settlement dept from an average of 15 min/claim to 3 min by eliminating detailed checking on all but very large claims. Instead of verifying 30 items as before, adjusters check just 4.|
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