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||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.|
|2||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.|
|3||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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