Reduce the Rate of Cost for the Input Used to Produce the Output

Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.

F. Change source of supply to a less expensive supplier:

A change in the supplier relationship may enable the company to switch to a less expensive supplier. The supplier may be less expensive because it has lower costs or because it reduces the company’s logistic expenses.

Source from new suppliers in better locations for costs

No.	Industry SIC	Year	Notes
1	0	2007	Large companies are investing in clean technology to reduce their energy costs and fund new technologies. Honeywell international partnered with EniSpA to construct a plant in Italy to produce an equivalent to diesel fuel derived from vegetable oil.
2	1521	2004	Prefabricated building companies are revising their images with custom homes. Detailed drawings and numbered panels are provided for the workers who assemble the homes while all the sections complete with windows are fabricated in Estonia. The cost is 20% less than traditional construction methods and boasts higher quality and fewer defects.
3	2033	1996	Most food-processing companies use chemicals or steam to peel fruit because labor is so expensive. UniMark delivers a tastier, fresher product because it can afford to hand-peel the fruit using Mexican labor.
4	3609	2008	Littelfuse, maker of fuses for devices, is shutting down sites in the U.S. and Europe to move operations closer to its business customers in Asia. The migration to China and other Asian countries is aimed at slashing labor costs and to avoid shrinking margins in the U.S. Littelfuse says it's following its customers. 60% of sales are outside the U.S., up from 43% a decade ago.
5	4812	2005	While French telecom-equipment maker Alcatel SA and other Western telecom gear makers have focused on penetrating China, Chinese equipment companies have set their sights abroad. To better compete, Alcatel, for one, has focused on trimming costs by improving the design of its products, pressuring suppliers to reduce their prices and shifting its manufacturing to lower-cost areas. About 70% of Alcatel's manufacturing of equipment for high-speed internet connections now is all done in China or Mexico instead of Western Europe. And Alcatel is focusing on more sophisticated products, such as equipment that enables telecom operators to supply consumers with video, as well as voice and data, over their telephone lines.
6	7389	2006	More and more companies are moving customers service jobs out of high-overhead call centers and into what is possibly the lowest-overhead place in the U.S.: workers' homes. JetBlue Airways is perhaps the most famous practitioner; all of its 1,400 reservation agents work from home. But the agents are employees. Most of the new Homeshoring jobs are independent contractor positions offered by outsourcing companies. The agents are on the hook for their own health care, computer equipment, training – even background checks. Homeshoring is less likely to risk the accent fatigue, cultural disconnection, and customer rage that offshoring can inspire .
7	8742	2007	In 2001, Accenture committed to the aggressive expansion of its business processing unit. Accenture set up a portion of its consulting operations in India. Accenture can take advantage of low labor costs while leveraging the company's tech know-how and expertise in a way that Indian companies cannot.

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