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||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.|
|2||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.|
|3||4812||2007||In an unusual move to cut costs, Sprint terminated the contracts of 1,000 customers who had made excessive inquiries which burdened the cellular service provider's service department. Customers are exempt from early-termination fees.|
|4||4812||2006||As cellular service providers roll out Internet-accessible services and devices, consumers are finding that their access may be limited. Verizon Wireless explicitly bans activities that take up large amounts of data capacity, like Web-camera broadcasts and automatic data feeds and reserves the right to terminate the contracts of those who engage in these activities.|
|5||4813||2002||Sprint PCS said it shut off service to a "significantly higher number" of customers on its Clear Pay program, which sets a spending limit on those who failed to pay their bills. Although Sprint PCS initially saw a boost in subscribers from the promotion, it faced criticism from analysts about the lack of quality of its new customers.|
|6||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.|
|7||5731||2004||Best Buy is aiming to outsmart the bargain hunters and coddle the big spenders. To deter the customers who drove profits down, it began enforcing a restocking fee of 15% of the purchase price on returned merchandise. To discourage customers who return items with the intention of repurchasing them at an "open-box" discount, Best Buy is experimenting with reselling them over the internet, so the goods don't reappear in the store where they were originally purchased.|
|8||8744||2000||E-Stamp initially targeted small offices and home offices. But these customers purchase only about $10 of postage a month. Now E-Stamp is broadening its market to include small and midsize businesses.|
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