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.
C. Eliminate customer activities with low value to the customer
Reduce ICDs by eliminating activities for which customers either will not pay or will not pay enough to cover their costs.
|1||1623||2007||Even a few outstanding bills can have a dramatic influence on a small company's bottom line. As they do not have the resources to hire full-time collections agents, some are turning to alternative resources. When Slack & Co. contracting found that many of its customers had a long history of paying late or only partially after claiming that the company did only part of the work, it cut off these rogue customers and declined to do business with companies put on an industry blacklist. The CEO estimates that the company saves $25,000 each year because of reduced borrowing and employees no longer have to chase down delinquent clients.|
|2||2086||2000||The new CEO of Cott corrected its problems by shedding unprofitable small customers and divesting everything but soft drinks.|
|3||3571||1997||Operating w/ little or no inventory, many small shops offer individual buyers cutting-edge microprocessors, or some other component long before brand-name makers. For example, IBM initially uses its allotments of new chips for corporate demand.|
|4||4812||2006||As cellular service providers roll out Internet-accessible services and devices, consumers are finding that their access may be limited. Both Sprint and Cingular have begun to charge according to the amount of data transfer, rather than a fixed fee.|
|5||5411||2001||Webvan, an online grocery delivery service, is trying to cut costs by closing activity in Atlanta, layoff 885 employees. The Atlanta business had cost $40 million to build but it didn't perform well.|
|6||6324||2004||Aetna Inc. is taking steps to cut down the costs of healthcare by turning to medical experts. In the past, Aetna has raised some premiums as much as 50% in some cases, raised co-payments, and as a result, trimmed millions of people from its coverage rolls. Patient advocates have said that Aetna's turnaround has involved shedding some of its sickest, and thus most expensive, subscribers.|
|7||8721||1994||Ernst & Young an example of an accounting firm trying to cut costs by reducing staff. Small customers complaining that they are not receiving good service and are moving to smaller competitors. Big firms focusing on big customers.|
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