Brainstorming Ideas: Reduce the Units of Input Not Producing ICDs or 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.
E. Reduce other underemployed Input
These changes put idle, or wasted, Purchases and Capital to work. These examples complement the ideas above, which deal primarily with improving the efficiency of People.
- PURCHASES
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