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.
E. Reduce other underemployed input
These changes put idle, or wasted, Purchases and Capital to work. These examples complement the ideas above, which deal primarily with improving the efficiency of People.
|1||0||2007||Servers are more popular and more powerful but require more power to run and cool over their lifespan. As energy costs rise, vendors are introducing new technology to manage energy usage. Hewlett-Packard created sensors that can adjust air conditioning in data centers to focus on the spots that need it most. H-P claims that customers will reduce their usage by 25% to 40%.|
|2||2600||2006||In industries from airlines to glass-making, companies are curbing usage, revamping machinery, and shifting production schedules to offset energy costs. Stora Enso Oyj, the Finland-based paper maker, set up a fund separate from existing mill budgets for conservation measures in its North American operations. The initiative has spent about $5 million over the past four years, but the investment should pay off as energy prices rise. Among other things, some mills have installed variable-speed motors on their dryer fans. The old system had a single speed, the amount of air needed to dry paper varies depending on its type and thickness. Changing all the fans would be too expensive, but as fans come up for overhauls, they are being shifted to variable motors.|
|3||2800||2005||A company called American Promotions is offering thousands of boxes of used Kodak batteries for free after a mail-in rebate. The batteries have "minimal previous use" because they've been briefly tested before repackaging. The batteries are really from Kodak. The batteries are used in the tens of millions of Kodak disposable cameras sold each year at theme parks and other tourist attractions. The typical disposable camera is designed to be reused up to 10 times and it is estimated that most resold Kodak batteries still have about 80% of their charge remaining.|
|4||3011||2007||In an effort to reduce the costs of health care, many employers are requiring their employees to prove that they have eligible dependents. This process could save corporations millions and help keep premiums down for legitimate beneficiaries but may have a negative impact on employee morale. Audits have found that up to 15% of those claimed as dependents aren't actually entitled to coverage. Goodyear Tire & Rubber found that 13% of dependents were ineligible and it reduced its health costs by 6% in 2005.|
|5||3571||2007||As concerns over energy usage rise, Dell Computer offered personal-computer models designed to use less power. The machine will automatically power down components when it is not in use. Customers can save $63 per desktop.|
|6||4512||2004||It's the little things that add up to big savings, but can annoy customers as well as employees. In the summer of 2002, Continental Airlines stopped offering passengers a full can of soda and started serving drinks in cups instead. While it lightened the garbage bags because there was less leftover liquid, passengers weren't pleased, especially on longer trips. Continental Airlines made a compromise: It would give cans to those who asked.|
|7||5331||2005||Tuesday Morning signs flexible leases that allow easy outs, and targets out-of-the-way stores near upscale towns. By avoiding fancy shopping centers, Tuesday Morning can open a new store for $100,000, less than half of what specialty stores pay.|
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