Reduce the Units of Input Not Producing Output
Reduce units of Input (I) available but not producing Intermediate Cost Drivers
(ICDs). This action makes Input levels more directly variable with the quantity of the ICD by reducing the amount of the available Input that is wasted or idle. For example, an employee (I) might produce one subassembly (ICD) per day. During that day, the employee spends a total of one hour waiting for parts for the subassembly. If the Company could eliminate that one lost hour of the employee's work day by providing parts in a more timely manner, the Company could reduce the number of employees (I) needed to produce the same subassembly (ICD) by 1/8th.
Shift demand to use unproductive resources.
The company may shift demand from one location, or time period, to another in order to take advantage of idle capacity.
Warnings and advice
|1||0||1996||One cause of congestion in product development is a fluctuation in workloads. In some months, many projects start, and in others few do. If average utilization rates are planned well, development times are reduced.|
|2||0||1986||The chief goal of computer-integrated manufacturing (CIM) is not to eliminate direct-labor costs, but to automate the flow of information through a factory. This eliminates not just direct labor but also the bulk of costs–usually about 45%–attributed to indirect labor, middle management, and other overhead.|
|3||0||1992||Multinational corporations are increasingly moving headquarters of business units abroad. In doing so, they risk a loss of control, but are able to operate near key customers and tough rivals in fast-changing markets far from home. AT&T moved its corded-telephone business to France. DuPont shifted its electronics operation to Tokyo, nearer its big base of Asian customers.|
|4||0||2003||Integration may no longer be crucial to a company's success. In fact, it might become a competitive disadvantage in terms of speed, flexibility, and price. Then the industry tends to dis-integrate as a consequence.|
|5||0||2008||Managers need to learn how to bond with remote employees by close contact and clear objectives. If managers can't hire team members personally, have the managers meet them on their turf in either an individual meeting or town hall-like meeting. The meetings are a good way to set the tone for open and frequent communication with remote employees. Use simple and clear language as much as possible when meeting employees, not overdoing it on the metaphors and analogies. Communicate each person's role and business objectives regularly, and establish agreed upon ways to resolve conflicts and solve problems early on.|
|6||0||2008||Some consultants are now urging companies to increase team sizes, so organizations can run with fewer bosses, in part by using technology to communicate and help monitor work. Improved communications techniques help managers leverage their knowledge, solve more problems, and supervise larger teams. Managers with wide spans of control tend to get paid more and are promoted to larger groups, which could lead ambitious managers to look for ways to widen their spans of control.|
|7||0||2008||Under-30 workers nowadays require a different style of management than before. Encourage them to balance their personal interests with their job responsibilities by providing flexible work hours and letting them work from home. Customizing aspects of their jobs gives them a chance to establish their personal identity at work.|
|8||2800||1993||Dow decentralized too much, letting its managers operate too independently from the rest of the corp. Now more centralized again. Also, now, if Dow can't use an invention, it licenses the technology to outsiders for a fee instead of sitting on it.|
|9||2890||1996||Hercules decentralized its R&D program, refocusing on the short-term needs of remaining businesses. It is now recentralizing R&D some, with the naming of a senior-level technology head.|
|10||3571||1991||NEC merged its U.S. laptop and desktop units into NEC Technologies (NECT). Merge has taken longer than expected, is not as beneficial as expected, and revenues are flat.|
|11||5900||1996||Whatever a retailer's logistical strategy, it needs to be integrated, with coordination across buyers, planners, distribution, and stores. One way is to move these employees to an all-inclusive profit and loss account.|
|12||6300||2004||Progressive is not a big fan of budgets because they do not want to push for growth and weaken pricing discipline. They use a 24 month rolling forecast whose primary purpose is capacity planning. They do not pay on the basis of the budget. The company's bias is to provide too much capacity rather than too little. If there are too many adjustors for growth than there is a little extra payroll to cover, but that is inconsequential compared to having a stream of claims coming in and not enough trained people to handle them.|
|13||8062||2001||In order to help hospitals run more efficiently, an operations manager needs to identify potential bottlenecks. They can alleviate them by balancing components of the process and shifting capacity to peak periods. Improving the process efficiency begins with looking at the main stages in a typical patient's visit. For each stage, the operations manager must analyze the demand for services and the hospital's ability to supply them; this must be measured against the number of patients per unit of time.|
<<Return to Reduce Input Not Producing Output