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.
Time: shift demand for ICDs to reduce peaks
|1||2611||1996||Weherhaeuser plans to close several plants for maintenance during this quarter, something it often does when prices fall.|
|2||3200||2006||In industries from airlines to glass-making, companies are curbing usage, revamping machinery, and shifting production schedules to offset energy costs. Summitville Tiles Inc. in Ohio turned off ones of its four kilns last winter and laid off 30 of its 250 employees to minimize use of natural gas during the cold winter months when prices peak. The company built stockpiles of ceramic tiles during the warmer months last year in anticipation of the move and is now shifted back into full production once again.|
|3||4512||2004||A discount of $5 is awarded for booking tickets online, as a move to promote online ticket reservation. As a result 63% of the tickets were booked online in 2002, which is also JetBlue's cheapest form of distribution.|
|4||5211||2001||Home Depot introduced a new service program: employees restock at night instead of driving forklifts through aisles while shoppers are around. It is safer and employees now spend 70% of their time with customers and 30% to restock instead of the reverse.|
|5||6021||2002||Wells Fargo is now charging customers $1-$2 a month if they talk to agents too many times instead of using the automated option. "You can't always afford to provide customers with convenience and their preference." Now, when customers hit "zero" to speak to a rep, they will be directed to the main menu or even disconnected.|
|6||7832||1994||Regal cinemas generate EOS by "multiplexing"–bunching several screens under one roof. EOS on number of employees needed to run concessions, projectors, etc. Regal cinemas holds down staffing by staggering its starting times so that as few as ten employees can handle the facility.|
|7||8062||2007||As the financial and human costs of medical errors become apparent, some hospitals are working to improve their system and reduce costs. Cincinnati Children's changed the way surgeries were scheduled. Previously urgent cases like a broken bone were squeezed in beside surgeries that had been scheduled for months. Surgeons padded the time of their operating slots to compensate for the inevitable delays. To reform the system, two operating rooms were set aside for urgent cases, an additional room was assigned to cases that needed to be done within a week.|
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