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.
Property, plant and equipment
|1||0||2007||As IT costs rise and companies require more power, companies are "virtualizing" servers to get more work out of a smaller number of machines. Virtualization allows one computer to host multiple applications without crashing the machine. Before as little as 5% of computing power would be used, with virtualization 60 to 80% will be.|
|2||3711||1996||Chrysler now purchases hard tools about 50-60 weeks before volume production, as opposed to 75-100 weeks before, as it did when product development was slower. So it saves up to 12 months of investment in hard tools.|
|3||3711||2004||By doing away with side-gripping pallets, the body line allows about 600 welding robots to fit in just half the floor space required for the old line. That's how Toyota fit two body shops into the area formerly occupied just for one- at half the cost. The flailing arms of the robots move through their work routines in a mechanical ballet that allows just a whisper of clearance between neighboring machines. To ensure that the robots don't tangle with one another, Toyota used 3-D stimulation software to refine the global body line's choreography. Seeing machines collide virtually on a computer screen is far preferable than having them crash physically.|
|4||4213||2001||Even in a downturn, Knight pulls in some of the highest profit margins in the industry. Its secret? Keep the rigs moving. It doesn't let a tractor sit under a trailer to be loaded or unloaded for any period of time.|
|5||4512||-2004||In late 2002 Delta announced a new profit improvement initative which included trying to cut losses in its Dallas hub by expanding the use of small regional jets, improving turn around times for aircraft and installing more automated kiosks for check-in at airports. The company tried to pare costs further by switching nonunion workers to a cheaper pension plan and by freezing employee pay. The company then finally made efforts to begin talks with the pilots' union.|
|6||4512||1996||USAir Group squeezed out more flights per plane by turning them around faster at the gate.|
|7||4512||2005||To avoid losing revenue for not having sold any seats at all, airlines sell their empty seats to bargain Web sites who then sell them to consumers. Consumers can save several hundred dollars off published rates. The web sites use dynamic pricing models, which adjust fares on specific flights as the seats start to sell. Discount web sites include priceline.com, CheapTickets.com, and HotWire.com. The cheaper tickets usually come with an over-night stay requirement.|
|8||4512||2005||Gol Intelligent Airlines, from its launch in 2001, has become Brazil's third-largest airline and the most profitable in the world. Gol has an operating margin of 37% on $912 million in revenue, compared with a 20% margin from Southwest Airlines. Before Gol launched, it sent management to visit Southwest Airlines, Ireland's Ryan Air, and JetBlue to get a close up look. Now like Southwest, Gol flies only one type of plane, Boeing 737s. It uses planes as much as 14 hours a day, compared with 8 hours at Southwest. Gol uses the same ticket-price software as RyanAir, and gives free snacks and rows that are spaced 32 inches apart like JetBlue. Gol sells 27% of its tickets directly to consumers online, without travel agents; compared at 59% in Southwest.|
|9||4512||2006||Hoping for faster turnaround times, United Airlines is introducing automated dual boarding bridges which are supposed to make getting luggage on and off its planes much faster. The dual end or Y-shaped bridge connects to both doors of a narrow-body plane, arching over the wing to the back door, to allow for simultaneous loading or unloading. They automatically connect to aircraft using sensors that detect the plane's position, thus doing away with the need for workers to connect them by hand. United says the bridges will help it reduce the time it takes to unload and then reboard a plane by 10 minutes, allowing it to fly its planes longer each day.|
|10||4800||2007||Several new technologies can allow in-the-field service providers to increase productivity. Real-time routing software lets dispatchers act quickly to improve performance. UPS employs a system that minimizes left turns, reducing fuel costs and time.|
|11||7011||1991||Despite poor snowfall, ski industry is making money with expensive snowmaking and snow grooming. They maximize a minimum amount of snow by moving it around.|
|12||7514||2005||In an effort to reduce the number of no-shows and the resulting financial loss, car-rental firms are introducing various techniques to ensure that customers claim their cars. Alamo Rent-a-Car offers a prepayment program which offers online customers who pay at the time of reservation a 10% discount. Those who cancel within 24-hours or fail to show up will pay a $25 penalty while those who cancel before that period will pay $10.|
|13||8999||2004||Loss-recovery services such as StuffBak sell bright tags and labels for $2 each. They are marked with an owner code, a toll-free number, and the phrase 'return for reward.' After placing the stickers on your device, you register on StuffBak's web site. If someone finds your device and calls StuffBak, you'll pay $14.95 plus shipping charges to get it back. It's a good idea to offer your own cash reward. Rivals Boomerang and Trackitback sell similar services.|
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