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.

7. Standardize ICDs

Standardize components used in process:
Extend the use of existing components to avoid new design ICDs

No.	Industry SIC	Year	Notes
1	2833	2004	Santarus took Prilosec's basic formula and made one important change to the delivery system: It added an antacid to offset side effects such as diarrhea, nausea, flatulence and abdominal pain. Santarus used AstraZeneca's own safety data on the core drug to get Food and Drug Administration approval. Santarus got a running start and saved lots of money.
2	2840	1991	A European consumer goods manufacturer standardized the open end of all bottles, allowing it to use the same highly efficient bottling process with negligible costs for changeovers to different liquids.
3	2840	1993	Procter & Gamble is making the shampoos sold in Europe have the same packaging in every country, simplifying production.
4	3571	1987	HP's new products were designed around a handful of low-cost, interchangeable components, so labor will make up 3% of the total cost.
5	3571	1988	IBM has placed new emphasis on using common parts and processes–"stability of design." A design proven in one machine is then used in another. When the Selectric 2000 typewriter was upgraded, they used a large number of parts from the earlier design.
6	3577	1999	HP now uses the same print engine in its new PhotoSmart models and its top of the line general purpose model.
7	3711	2004	Originally, Ford tried to boost profits and slash costs by using the platforms in luxury cars that were used in Ford's lower-end models which damaged the exclusive images of the brands as customers were unwilling to pay more for a brand that shared a foundation with a more humble car. This policy has been replaced and Ford executives manage to cut costs by using standard Ford parts when possible, installing the same navigation and sound systems across the luxury brands and pooling individual resources for logistics, information technology, engine development and back-office expenses. Each undercarriage will be built exclusively for the brand but each will derive as many vehicles as possible from the platform.
8	3711	2004	As GM develops the next-generation Chevy Silverado and GMC Sierra pickups for 2008 it aims to reuse much of the existing platform. That should cut development costs in half, to nearly $3 billion. GM is putting its global resources behind its platforms, mining its European and Asian affiliates for vehicles, engines, and architectures that can deliver new cars to North America.
9	3711	2004	Consumers want the freshest models. Japanese have shortened vehicle life cycle to five years- in part by relying on platform-based development, which allows them to conserve both cash and engineering resources.
10	3711	2004	GM would save money by reusing the skeleton beneath the Solstice's sleek body for its upcoming Saturn coupe. Japanese rivals-especially Honda Motor Co.- have outpaced Detroit using this same strategy.
11	3711	2005	Hyundai, whose shabby cars made it the laughingstock just a few years ago, wants to move into the front ranks of carmakers. Hyundai expanded the quality department tenfold, to 1,000 people. It also encouraged employees to share their ideas for improvement, promising bonuses that averaged $150. At Hyundai's Asian factory, workers have dropped 25,000 ideas in to the suggestion box, of which 30% have been adopted. One worker won $500 after noticing that the Sonata and the XG 350 sedans had differently shaped covers over their spare tires. Sharing the cover saves the company $100,000 a year.
12	3711	2005	Ford Motor Co. plans to overhaul its global purchasing process to offer larger, long-term contracts to a smaller group of suppliers on future models, a switch that could save billions of dollars a year. In the initial phase, Ford will cut by more than half the number of suppliers from whom it buys 20 key parts such as seats, tires, and bumpers. Ultimately, Ford aims to shrink from about 2,500 suppliers world-wide to less than 1,000.
13	3711	2005	Ford Motor Corp. is redirecting their attention to a different style of customers by introducing their new Ford Fusion. The Fusion is a mid size sedan that will cost $18,000 or so. The new model represents the company's strategy to climb back into the passenger car segment of the market. If it does not work Ford Motors will be just like General Motors, hoping for a comeback on its big sport utilities, a market segment that at the moment is crumbling. Sales of the Expedition and Explorer are down 25%, one reason is the company's overall U.S. market share tumbled to 17.9%. Ford is estimated to have a gross profit averaging only $5,400 on a midsize passenger car which is $6,000 less than the comparable figure for a midsize SUV. The company will build 800,000 midsize cars and car based crossovers off of one common chassis, thus saving billions in engineering costs.
14	3861	1992	One of Xerox's product teams designed a product with universal power supplies and dual-language displays to eliminate the cost of reengineering for new markets at a later date.

<<Return to Reduce Unique ICDs in Process