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.
A. Assist Input in increasing ICDs.
Recognize efficiency. When people understand that the company is measuring efficiency, they pay more attention to what is measured.
Add evaluation of levels of efficiency:
Gather opinions of insiders on efficiency
|1||3663||1993||Motorola's Government Electronics group redesigned its supply management organization as a process with external customers at the end; team members are now evaluating peers.|
|2||3724||1992||Allied-Signal's CEO meets with employees regularly. He holds "skip-level" meetings, at which executives are barred and employees can ask any question anonymously, by writing them on unsigned file cards.|
|3||3728||1986||Woodward has its employees rate each other, including workers and supervisors. A Member Evaluation Committee produces a secret list that ranks each of Woodward's 2750 workers in terms of their contribution to the corporate community. Each employee's base salary, and therefore his bonus, depends directly on his position on the list.|
|4||3823||1994||Every 2 years, each of Emerson's employees fills out lengthy opinion surveys. If too many responses are negative, managers must come up with proposals for correction.|
|5||5944||1991||Bardy's Diamond Center increased productivity by creating a "buddy system," in which pairs of employees become accountable to each other for their performance.|
|6||6311||2003||The company did an in depth analysis of the operations of its New Business unit, which showed that there was considerable variation in the quality of existing services.|
|7||7375||2007||While technology has changed dramatically, management styles have not changed significantly during the last forty years. However, some companies are working to shake up the system. Many of Google's employees work in small teams. Larger projects are broken up into specific elements which employees then tackle. While Google encourages its employees to take initiative, their projects are subject to feedback from their peers, which helps weed out bad ideas and improve good ones. Teams which make dramatic contributions are rewarded with quarterly Founders Awards, which grant millions of dollars' worth of restricted stock.|
|8||8742||2000||Ideo is big on establishing group identity with its own office design, outside retreats and a bonus system based on the performance of the company, the studio and the individual. Two employees must pick two peers to help in his or her annual evaluation.|
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