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.
Assign mulitple tasks to employees
|1||2325||1998||When Levi's production switched to teams, average turnaround (time from order receipt to customer shipment) improved from 9 weeks to 7 weeks.|
|2||2522||1992||CEO shifted Kerm to a more flexible organization led by cross-functional teams – "an organism that is fast and adaptable."|
|3||3585||1994||Wabco UK switched to manufacturing cells that do everything from latching to assembly in quick sequence. Manufacturing a pump now takes just 6 minutes.|
|4||3621||1997||Simply put, Flex Flow eliminates the progressive assembly line. The manufacturing process is structured in such a way that each worker puts together a complete motor from a tray of parts that is in front of him.|
|5||3663||1989||Workers trained in several jobs helped Motorola solve critical quality problems with cell phones.|
|6||3711||1989||At General Motors' Detroit Gear & Axle plant, a team of 30 cross-trained workers building parts cut warranty costs related to the suspensions by 400% in just 2 years.|
|7||3711||1988||At Nissan's Midlands plant, a worker turns out 24 cars/year. At Dagenham plant, workers produce 6/year. Dagenham has 125 job classifications, each restricting workers to 1 small task; Nissan has 5 classifications.|
|8||3711||1989||Instead of using assembly lines, Volvo employs teams of 7-10 hourly workers. Teams work in one area and assemble four cars/shift. Since members are trained to handle all assembly jobs, they work an average of 3 hours before repeating the same task. Said to produce better quality than its 3 other Swedish plants.|
|9||3711||1989||General Motors improved speed & efficiency by loosening up long-ossified job categories.|
|10||3711||1989||By having workers handle all assembly jobs, Volvo avoids problems associated with repetitive assembly lines, including boredom, inattention, poor quality, high turnover, and high absenteeism. Morale is high, and absenteeism is only 8%.|
|11||3711||1988||Japanese-owned auto plants in the U.S., such as Honda in Marysville, OH and Toyota in Fremont, have higher productivity than GM, Ford, and Chrysler. Japanese plants have only 3-5 job classifications, while GM, Ford, & Chrysler each have about 60.|
|12||3711||1996||Jaguar replaced its old assembly line, reorganized workers into teams. Estimate they've taken 40% of the body shop hours out of their new car.|
|13||3711||1989||By having workers handle all assembly jobs, Volvo avoids problems associated with repetitive assembly lines, including boredom, inattention, poor quality, high turnover, and high absenteeism. Morale is high, and absenteeism is only 8%.|
|14||6021||1996||Bank of Granite has a lending officer who doubles as a security officer, and a compliance officer who runs the credit administration department in her spare time.|
|15||6021||1991||First Chicago retrained its letter-of-credit issuers to handle each step in the process. Instead of going through 9 employees, customers deal with just one employee. Credit letters now go out in less than a day (down from 4 days).|
|16||6159||1993||It used to take IBM Credit Corp six full days to approve a loan application, although the actual work consumed only 90 minutes. Documents used to move from one specialist to another. Now, a single person handles a request from beginning to end.|
|17||6411||1989||USAA made the most of its investment in office automation by consolidating departments and training salespeople to handle every step of processing a policy.|
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