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:
Use only one type of component to avoid learning ICDs

No.	Industry SIC	Year	Notes
1	2452	2005	Pulte Homes Inc. is insulating itself from downturns. Other big homebuilders are trying some of the same tactics as Pulte. For instance, KB Home is standardizing components such as window frames, and working to create a steady flow of construction, using some of the same lean-manufacturing techniques. Toll Brothers Inc. and Centex Corp. are manufacturing some housing components off-site to boost efficiency.
2	2452	2005	A new generation of sleek prefabricated houses are suggesting a cost-efficient alternative for design, yet budget, conscious buyer. San Francisco Dwell magazine launched a new line of prefab houses, called Dwell Homes. Whereas regular Bay Area houses can cost as much as $650 per square foot, Dwell Homes average $175-$250 per square foot – about $530,000 for a two-level, 2,500 square foot abode. Buyers of Dwell Homes have three floor plans to choose from, created by architects.
3	2840	1993	Procter & Gamble, after reviewing their factories, concluded that 65 computer systems around the world could be consolidated into 3, reducing the need for programmers and other support personnel.
4	2844	2004	Avon expanded its cosmetics business globally by rebuilding its manufacturing and transportation infrastructure from top to bottom. Avon is working to standardize its containers to cut costs and increase efficiency. Once convinced that every product should have a distinct bottle and shape, the company now realizes that cap, color, and labeling can be sources of differentiation too. Manufacturing can be more flexible because changeover time if often zero. Suppliers can now run Avon's containers down more efficient high-speed lines. And product costs are lower.
5	2844	2004	Avon expanded its cosmetics business globally by rebuilding its manufacturing and transportation infrastructure from top to bottom. Once Avon was able to see the supply chain as a whole, other benefits came. Avon had once considered the idea of labeling bottles itself instead of relying on supplier. Now Avon could see that it would only have to buy one plain bottle for shampoo or lotion instead of five or six language variations. Plants could make one long production run without repeatedly switching bottle stock. And customer service would improve because branches could be more responsive to changes in demand. Now, when inventory runs out in a given market, the warehouse can respond quickly by labeling products in the right language and loading up a truck.
6	3541	1991	A Japanese machine tool builder standardized the form elements (e.g., hole diameter) that designers can use for new parts. Therefore, despite different parts, the manufacturing process relies on the same machines, tools, and jigs. This eliminates set up, thus reducing product introduction time.
7	3571	2003	A "product simplification task force" in IBM pushes divisions to use standardized parts even if that means redesign. Eliminating customized parts saves $50 per unit on these servers, which cost from $2100 to $2300; IBM sells 22,500 of these machines in a year. It used to give away a $2000 toolbox with low-end mainframes, but IBM has put an end to this. In PCs, IBM replaced its 4-color packaging box with a 2-color blue and black box that costs a nickel less, saving $350,000 a year.
8	3599	2004	A new industry trade group, the Semiconductor Test Consortium, is coming with standards for chip test gear. The big makers of chip test gear, aside from number one Advantest America, have not joined the group and oppose its plans, since standards would allow chipmakers to buy fewer testing machines. But the standards would cut down on the cost of making test machines as well, since test gear makers design their products from scratch with unique software.
9	3600	2006	Matsushita Electric Industrial Co. is taking efficiency to new heights to counter low-cost rivals. One cost saving change it made was designing a circuit-board that would only need slight changes for each of the phone, fax, and printer models in all its factories around the world. Despite the faster pace, defects are at an all time low: under 1% in every factory.
10	3711	1920	Henry Leland revolutionized manufacturing in the car industry by making interchangeable parts. Henry Ford later capitalized on that idea in his process of assembly manufacturing.
11	3711	1986	Chrysler eliminated 701 kinds of parts. Chrysler saves $5 per car ($1,250K annually) on reduced inventory carrying costs, and $4 per car (1 million annually) in parts shipping costs.
12	3711	2004	General Motors is ending the autonomy its branches in other countries have had for over 80 years. It's insisting that its world-wide units share basic parts and work together to design vehicles that can be sold, with modest variations, anywhere in the globe. One example: GM wants to reduce the types of radios it uses in its cars from 270 to 50, saving 40% in radio costs.
13	3711	2006	General Motors. Corp is looking to cut $2 billion from GM's purchasing bill every year indefinitely and ax many of its 3,200 suppliers. In general, GM makes too much of everything, which it's trying to change. GM once had 20 fuel pumps, but now it has 6 and is trying to cut down to 5. As for engines, it makes 12, and is planning to save millions by cutting back to 2 V6s. GM will also save $100 million over the next few years by moving to a simpler design of door hinges.
14	4512	2004	American Airlines has made changes to its strategy in an attempt to turn a profit in a difficult, overcrowded market. Traditionally, airlines needed to be big to do well, those who flew the most flights drew lucrative business travelers. Now, low-price airlines pay lower wages and benefits and cut services and pass these discounts onto travelers. Now, all American planes are the same, making scheduling more efficient and planes cheaper to maintain. Employees and aircraft are also working harder. However, with fewer planes sitting idle, replacing planes to prevent delays becomes more difficult.
15	4512	2004	Southwest uses only the Boeing 737. Unlike most traditional airlines, Southwest has bought new and used planes, which they service through their (primarily) in-house maintenance facility.
16	4512	2005	Gol Intelligent Airlines, from its launch in 2001, has become Brazil's third-largest airline and the most profitable in the world. Gol has an operating margin of 37% on $912 million in revenue, compared with a 20% margin from Southwest Airlines. Before Gol launched, it sent management to visit Southwest Airlines, Ireland's Ryan Air, and JetBlue to get a close up look. Now like Southwest, Gol flies only one type of plane, Boeing 737s. It uses planes as much as 14 hours a day, compared with 8 hours at Southwest. Gol uses the same ticket-price software as RyanAir, and gives free snacks and rows that are spaced 32 inches apart like JetBlue. Gol sells 27% of its tickets directly to consumers online, without travel agents; compared at 59% in Southwest.
17	5141	1997	Over time, JP will combine all operating units on the same computer system, which will allow the company to consolidate back-office functions.
18	8062	2006	To reduce errors, hospitals are prescribing innovative designs. The new St. Joseph's Hospital facility will have standardized rooms, so that in an emergency, doctors and nurses would know exactly where to find things. The standardized, pre-fabrication approach enabled the hospital to get discounts from vendors, and whittled down the budget, allowing the hospital to build a postpartum recovery room, a new diagnostic area, and an education center.

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