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.

B. 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

Place single function in fewer locations:
Customer ordering and service

No. Industry SIC Year Notes
1 2711 1996 Centralized customer service centers may be the next trend for newspaper groups as they try to cut costs and gain efficiencies by consolidating back-office and administrative operations.
2 3531 2007 Companies often reduce labor costs by sending customers with questions and complaints to their website. However, search tools are often unsophisticated and inadequate. Some companies are investing in new technology which will improve search tools, provide discussion forums and connect with a live agent should they have additional questions. CNH Global, a maker of construction and agricultural equipment, adopted a system from Consona Corp which can help dealers find answers based on the product they are using.
3 4213 1998 Yellow very recently opened a centralized customer service center in South Dakota.
4 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.
5 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.

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