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.


No. Industry SIC Year Notes
1 3600 2007 In an effort to save power and cut costs, Hitachi turns off the power at its office building during lunch and after-hours. The firm has also undertaken other environmental initiatives, including the installation of state-of-the-art chillers which allow them to better monitor temperature and reduce waste. Together, these measures have reduced energy use by 6.2%. Executives explain that as the costs of electronics are pushed lower and lower, they must find a way to trim costs. Many firms based in Asia have experienced significant price increases for electricity.
2 7375 2006 Data centers are looking for alternative sources of power in an effort to save money on energy costs. Affordable Internet Services Online Inc. runs on solar power. Its facility is made of steel and has more than 100 solar panels. The facility also has solar sky tubes that bring in natural light and a special air conditioning unit brings in cool air, all reducing the need for electricity. Its servers run low-powered microprocessors produced by AMD, which emit less heat and require less power than conventional chips. The data centers cost 60% more to build, but the savings are accumulated over the years. Affordable Internet Services says it saves $3,000 a month in electricity costs.

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