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.
B. Shift demand to use unproductive resources.
The company may shift demand from one location, or time period, to another in order to take advantage of idle capacity.
Location: centralize activities
Place multiple functions in fewer locations:
Institute "work from home" programs
| No. | Industry SIC | Year | Notes |
| 1 | 3571 | 2005 | With the growth of globalization, independent contractors, extreme commutes, expensive gas, and the broad-band connected micropolis, companies are finding it fruitful to untether their workers from the office. At Sun Microsystems Inc., nearly 50% of employees can work from home, cafes, drop-in centers, a company office, or some combination thereof – saving the company $300 million in real estate costs. Companies are finding that allowing workers more flexibility to work from remote places increases productivity. Sun says its virtual workers are 15% more productive than their office-tethered brothers. Employee flexibility is seen as a crucial management strategy that can improve worker performance and company financials. |
| 2 | 3576 | 2006 | The rise of mobile workers has companies rethinking how to utilize their office space. By dumping square footage, negotiating flexible leases, reconfiguring shadow spaces, creating movable, everything-on-wheels offices, and designing "getting away without going away" offices, companies can better leverage their talent and inspire innovation. Cisco Systems Inc. cut rent and workplace service costs by 37% and saw productivity benefits of $2.4 billion in 2005 from just such an overhaul. Work Design Collaborative estimates that companies can get as much as 30% to 40% cost savings. |
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