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.
Location: centralize activities
|1||2300||2004||Luen Thai Holdings Ltd. is building a supply-chain city, which is being developed as a one-stop base of operations for clothing makers and customers such as Liz Claiborne Inc. that now work in far-flung offices and factories around the globe. The real gains would come by reorganizing their entire production process so as to be able to cut down on turnaround times for new clothes and coordinate logistics.|
|2||3571||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. Sun Microsystems, however, still prefers to work with teams of 10 people or fewer. Sun has been putting more energy into redesigning work environments so that teams can expand or contract more easily as projects evolve. Some initiatives include better support for engineers who sometimes work from home and flexible seating so that growing teams can fit in new members without losing proximity.|
|3||4955||1996||LES is putting much emphasis on communications seeking a new Chief Information Officer and special techno to bring it closer to its customers. This includes consolidating 35 call centers into 3 or 4 sites and a new ATT communications system.|
|4||5812||2007||Wendy's consolidated ordering at 16 stores, installing a call center designed to handle drive-through orders for all of its stores. As a result, orders were more accurate and order takers had the time to up-sell customers on additional items. While the program is expensive, the company is marketing the service to other restaurants which distributes the cost.|
|5||6021||2004||ING Direct avoids account-seekers who want to deposit more than 100,000 as those customers tend to want coddling. Instead, it focuses on internet based banking, offering accounts with few frills but higher interests. Most interaction occurs over the phone or Internet. New customers cost the bank just $90 while traditional banks spend as much as $350. However, as the economy improves, more customers will demand investment and checking services which ING will need to meet in order to retain customers.|
|6||7389||2006||More and more companies are moving customers service jobs out of high-overhead call centers and into what is possibly the lowest-overhead place in the U.S.: workers' homes. Homeshoring also provides a flexible just-in-time workforce. Shifts can last as little as 15 minutes. Agents are paid only for the time spent on the phone. Technology lets companies monitor worker performance with extreme precision. While a state-side call center worker typically costs $31 an hour, including overhead and training, home agents cost only $21. Willow says the company's home agents make sales that are up to 25% higher than in call centers; their customer satisfaction rates are often 40% better.|
|7||8299||2005||Despite ongoing investigations of ITT Educational Services, the for-profit educator has remained on track. In 2004, student enrollment rose 14% from a year earlier. The company has diversified its product line, with a series bachelor degrees programs. With the difficult tech market, the company has branched out beyond tech jobs, such as associate and bachelor degrees in criminal justice and business. A new 2+1 hybrid program allows students to go to class two days on site and one day online, increasing capacity utilization at ITT's facilities.|
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