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.
Train employees in efficiency. The company may incur costs to train employees in the expectation that these expenses will result in even greater cost savings through better efficiency.
Encourage personal learning
|1||3312||2006||Nucor Corp., a major U.S. steel company, has forged a winning work force using motivation. It pushes down authority: To minimize layers of management, Nucor has pushed work that used to be done by supervisors, such as ordering parts, down to line workers, and pushed the duties of plant managers down to supervisors.|
|2||3571||2003||One way IBM's CEO has smashed "silos" has been by moving people around, forcing some to work in new areas.|
|3||3711||2000||Ford announced in 2000 that it would offer a desk top computer, printer and Internet access to its 350,000 employees for a $5 monthly fee in order to keeps its worldwide team at the leading edge of e-business technology and skills.|
|4||3714||1988||A new "pay for knowledge" compensation system at Eaton plant encourages workers to learn as many skills as possible. Plan wiped out 100 separate pay categories & gave mgmt greater flexibility in assigning work.|
|5||3715||1995||At Wabash, 2 25-cent-an-hour pay raises are awarded only after completion of 2 sets of courses, taken on the employees' own time. Supervisors are promoted from the factory floor but must pass a test and take special classes.|
|6||4512||2000||Delta is arranging to deliver all its employees a subsidized PC. They each will pay $12 a month for 36 months, or $432 for package that includes a brand name PC with an Intel microprocesser, software, and Internet Service.|
|7||4512||2004||AirTran is emerging as one of the fastest growing discounter airlines in the industry. The discount airline plans to spend this year expanding even further, while keeping low-fare pressure on the big carriers. One reason big carriers are having trouble keeping up with AirTran is because of its low labor costs, a result of its highly flexible labor force. AirTran hires workers that can move from counter to conveyor belt to the runway at the airport. Labor costs were only 25% of AirTran's revenues in the first quarter, the lowest figure in the industry and key to AirTran's success. In 2003, AirTran earned $100 million on revenues of nearly $1 billion and is expected to turn in strong profits again this year despite high fuel costs.|
|8||4911||1996||BG&E awarded grants totaling $183,500 to 6 Md. community colleges in an effort to help develop a highly skilled work force.|
|9||5399||1989||Normally, Lechmere hires entry-level part-timers. But with low unemployment, Lechmere instead offered workers raises based on the number of jobs they learn to perform.|
|10||5411||1990||Wegman's recruits young employees from disadvantaged communities, provides them with mentors, and offers them an opportunity for a full college scholarship.|
|11||7011||1987||Embassy Suites Hotels posts daily reports for workers to be motivated, and has a pay system based on skills.|
<<Return to Reduce Input Not Producing Output