Brainstorming Ideas: Reduce Unique Intermediate Cost Drivers in Process

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.

B. Redesign the process of producing the ICD or Output

Change the process used to produce the ICD or Output to eliminate activities.

1. Warnings and advice

2. Shift ICD to others outside the company with no payment for their assistance

3. Automate an ICD

4. Reduce movement of an Input

5. Reduce errors in process

6. REDUCE USE OF PURCHASES AND CAPITAL ICDs

1. Warnings and advice Advisories>>
2. Reduce Purchased ICDs (items purchased for end product Output)
   1. Measure needs more accurately Examples>>
   2. Use People or components requiring less Purchases
      1. Lower energy costs Examples>>
      2. Lower location costs Examples>>
      3. Less raw materials Examples>>
      4. Lower health care expenses Examples>>
      5. Lower transportation expenses Examples>>
      6. Lower software costs Examples>>
      7. Less advertising Examples>>
      8. Other Examples>>
   3. Reuse components Examples>>
   4. Set specific limits on expense Examples>>
3. Reduce Capital ICDs (units of investment used to produce end product Output)
   1. Warnings and advice Advisories>>
   2. Control access to assets Examples>>
   3. Use tracking devices on inventory Examples>>
   4. Match work center inventory to pace of requirements Examples>>
   5. Delay spending until firm customer commitment Examples>>
   6. Use kiosks and remote inventory Examples>>
   7. Pursue patent and trademark infringement Examples>>
   8. Liquidate assets falling in value Examples>>
   9. Adopt security measures Examples>>
   10. Use People or components requiring less Capital
       1. Use low cost locations Examples>>
       2. Use components with smaller form factor Examples>>
       3. Set equipment for multiple types of components Examples>>
       4. Change work hours to extend capital usage Examples>>
       5. Use capital with greater capacity Examples>>
       6. Other Examples>>
   11. Use existing networks or facilities Examples>>
   12. Use insurance programs Examples>>
   13. Other Examples>>

7. Standardize ICDs

8. Accept risk of lower profits

9. Other

<<Return to Reduce Unique ICDs in Process