Reduce Unique ICDs by Redesigning the Product or the Process

The objective of this activity is to reduce the number of ICDs by reducing the occurrence of an ICD in producing a unit of Output, or by reducing the number of separate ICDs used in the Output. A unique ICD is one of the key activities in the work center's contribution to the final product (O). It is separate and distinct from any other activity in the work center. For example, the fastening of a part onto a subassembly and a quality control check of the subassembly would be unique ICDs.

A. Redesign the product

Reduce ICDs by redesigning the product or the components of the product. Any redesign of the product or its components implies that the resulting product, after the redesign, would be acceptable to customers.

2. Reduce Performance Standards

Overall product: Increase the resources the customer must use with the product: Time:
Reduce the Convenience of Service

No.	Industry SIC	Year	Notes
1	4512	1991	Southwest offers snacks but no meals; boarding passes are reusable cards; no assigned seating; no centralized reservation system; baggage not transferred to other carriers; flexible work rules; leanly staffed.
2	4813	1993	AT&T recently said it will save about $200 million a year by eliminating 3,000 to 4,000 operator jobs, closing roughly 1/3 of its operator centers and relying instead on voice-recognition technology.
3	5411	2004	Germany's discount retailing giant, Aldi, keeps its expenses low in a market with high labor costs by keeping services to a minimum. Aldi's strategy starts with hiring few store staff – typically four or five per outlet, compared with 15 for a normal supermarket. It also doesn't hire specialty clerks, such as butchers or bakers. By hiring fewer workers, Aldi can pay good wages and still save on labor costs. Aldi's labor costs are 6% of revenue, compared with 12%-16% at a typical supermarket. It can get away with hiring fewer workers because of its small store sizes. Aldi's stores are usually 750 square meters large, compared with about 1,000 square meters at a normal supermarket. As a consequence of such few workers, there are only a couple of check-out lines open, and are usually a dozen shoppers deep, while two other employees are busy stacking new boxes.
4	5411	2004	Dollar stores are gaining in popularity as a growing legion of shoppers find Wal-Mart too pricey or too hard to get to. Whereas Wal-Mart can only open their huge stores on the outskirts of towns, discounter chains can put up their stores right in the downtown neighborhoods where people live. Parking is easier, product prices are sometimes lower than Wal-Mart's, and shopping can be faster. Wal-Mart competes on price and assortment while dollar stores compete on price and convenience. Dollar stores can beat Wal-Mart's prices for a number of reasons. First of all, they offer even less frills, thus having very low overhead costs. They also open stores in second-tier strip malls and pick-up cut-rate leases when other retailers go out of business. To save money, the discount stores basically don't do any marketing and employ only about four people per store. All the discount chains rely on closeout and overstocked merchandise for a portion of sales. Dollar General and Family Dollar generally sell items that are $10 or less. Dollar Tree Stores Inc. prices all their goods at $1, while Dollar General prices most goods in round numbers under $10.
5	5731	2006	SimplyCheap.com is an online business selling discounted electronics that started on eBay. SimplyCheap's secret weapon is keeping costs down. Rather than taking the cost of a warehouse and paying for inventory, it has items shipped directly from several warehouses. In addition, a 1-800 customer service number can be found only by taking a virtual tour of SimplyCheap's Web site. It's otherwise unlisted because it doesn't want to have a call center. Too many customers call 1-800 numbers, spend a lot of time asking questions, and then buy elsewhere. At SimplyCheap, customer questions are answered online through its site.
6	6021	2004	ING Direct thrives as it offers its customers no-frills, low-cost products. Its most popular product is the FDIC insured "Orange" savings account, which pays 2% interest, quadruple the average rate for statement savings account. To attract customers, ING Direct uses Internet ads and targeted snail mailings. One mailing with an offer of $25 to people who open a savings account is especially persuasive. ING Direct also has some ads and three ING Direct cafes to boost awareness, but 75% of its interactions occur over the internet or by telephone. By telephone, ING Direct's representatives keep calls short and cross-selling to a minimum. With its non-coddling approach, it only costs $90 to land a new customer, compared with as much as $350 at a typical bank. ING Direct also saves money by attracting most of the web-savvy depositors, who spend an average of just 16 minutes per month on the site, compared with 60 minutes for Bank of America users.
7	6300	2005	It is difficult for a carrier to meet the needs for a large national broker in the same way as it does for an independent small agency. For large agencies, carriers offer dedicated service teams, on site representatives and guaranteed service levels. For mid-size agencies, the carriers provide local underwriting support and personal attention. Smaller agencies may draw on centralized call centers and high quality self-service technology tools. The carriers are thus providing different levels of service to the agencies depending on their size, profitability and growth.
8	6531	2006	In the fight between traditional real-estate brokers and their discount rivals, some consumers are getting caught in the crossfire. One fight likely to stir up more disputes involves the discount firms that offer rebates to buyers. The practice got a boost this year with the launch of two ambitious companies, BuySide Realty Inc. and Redfin Corp., which are promoting this concept heavily as they try to build national brands. Both encourage buyers to do part of the work in finding home; they don't offer the free car rides from house to house provided by most traditional agents.

<<Return to Reduce Unique ICDs in Process