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 multiple functions in fewer locations:
Centralize businesses and functions
|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||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. This spring, instead of designing the company's new handbag and jewelry line the old way – with the designers in New York and production people in Asia – Luen Thai is bringing everyone to the factory. The process, which usually took over a month, was completed in 10 days. The ability to make those kinds of changes quickly and at the last minute will allow clothing labels to tackle one of their biggest weaknesses: getting new styles into stores faster. Even the quickest clothing companies have a concept-to-shipment cycle that is more than 90 days.|
|3||2671||1996||International Paper is consolidating its imaging-products business in the US and Europe, because it's been performing well below expectations.|
|4||3600||1986||N.V. Philips had autonomous subsidiaries spread across Europe, North and South America and Asia. Five years ago the company began consolidating. It shut 40 plants and began making more decisions at its headquarters.|
|5||5699||2005||Limited develops its own design skills. It hired more product designers and reorganized so that brands could be handled centrally. Limited started to develop products more quickly. The company also reorganized into three business groups: beauty and personal care, lingerie, and apparel.|
|6||5961||1996||Spiegel was plagued by transitional expenses last year related to its move into a new distribution center in 1994. But the company is finally settling in a new one-floor facility. Previously, it used 13 different facilities.|
|7||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.|
|8||7841||1997||Blockbuster moved its headquarters in an effort to centralize distribution and automate much of its operations.|
|9||8742||1991||Consulting management at KPMG Peat Marwick was reorganized to a national system from regional management in 1990. Peat has reduced the # of its consulting partners to 230 from 330 a year ago.|
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