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:
|1||3571||1992||IBM created a centrally run entity called Employment Solutions that recruits and screens prospective employees for all of IBM's independent divisions. As a result, IBM slashed about 400 "duplicate" jobs just from the consolidation.|
|2||3711||2004||General Motors is ending the autonomy its branches in other countries have had for over 80 years. By tapping engineers in far-flung units who previously would have worked only on local models, GM is hoping to speed up development of U.S. models without spending more. GM is now using engineering centers in India, South Korea, and China to get work done at a lower cost while American and European engineers sleep.|
|3||4213||1998||In the Transit Group roll-up approach, operations and customer service are handled at the local level while finance, vehicle purchasing, insurance and other growth functions are handled centrally.|
|4||5141||1997||The payables operation is also centralized, allowing the company to maximize working capital management and payment terms.|
|5||8062||2006||Remote patient monitoring lets fewer specialists provide more attentive care. The eICU technology, sold by Baltimore's Visicu Inc., lets hospitals leverage the scarce resources of specially trained intensive care doctors and nurses. A single physicians and nurse can support bedside caregivers for more than 100 patients at once. According the Leapfrog Group, 54,000 people a year could be saved if every U.S. ICU case were co-managed by a specialist.|
|6||8062||2006||Remote patient monitoring lets fewer specialists provide more attentive care. Electronic ICU (eICU) – a technology that combines software, video feeds, and real-time patient information to let intensive-care specialists at Sentara Norfolk General Hospital cover 11 ICUs at six hospitals, spread 60 miles apart, around the clock. For Sentara, even having a stand-alone eICU system made a huge impact. In two ICUs, deaths fell 27% the first Sentara had the system up. The costs per ICU case also fell, by nearly $3,000, or 25%. The system cut almost a day off the average ICU stay, from 4.4 days to 3.6. And the system generates data Sentara uses to refine doctors' protocols for treating common applications. The real gem of the system, however, is that the eICU allows change in hospital management. It adds two more layers of patient management, but each patient gets twice the attentive care.|
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