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||2040||1996||P&G plans to cut down coupons, especially free-standing coupons in Sunday newspapers.|
|2||4812||1998||As PageNet has raised prices it has found that it has lost some volume, but the customers who left were not profitable. So the bottom line improvement and at the same time it freed up space on the network for more profitable service.|
|3||4812||1998||PageNet no longer supplies pagers at a loss to customers. It is raising prices for airtime on its network and letting unprofitable contracts expire.|
|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||5699||1998||During the new CEO's first year at Burberry, the company made several bold moves, including closing two costly raincoat factories in Britain, sharply curtailing distribution to a lower priced Gap Inc. like line, and cutting all sales to a gray market in Asia-markets.|
|6||5731||2004||Best Buy is aiming to outsmart the bargain hunters and coddle the big spenders. Most chains use their marketing budgets chiefly to maximize customer traffic, in the belief that more visitors will lift revenue and profit. Shunning customers – unprofitable or not – is rare and risky. Best Buy is trying a new tack with a business school theory that advocates rating customers according to profitability, then dumping the up to 20% that are unprofitable. It's applied this strategy in about 100 of its 670 stores, examining sales records and demographic data. To lure the high spenders, Best Buy is stocking more merchandise and providing more appealing service. To deter the undesirables, it is cutting back on promotions and sales tactics that tend to draw them, and culling them from marketing lists.|
|7||8082||1997||Management stated that earnings were being negatively impacted by the Company's continuing efforts to eliminate noncore businesses and to exit managed care contracts not meeting acceptable profitability thresholds.|
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