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.

A. Assist Input in increasing ICDs.

Recognize efficiency. When people understand that the company is measuring efficiency, they pay more attention to what is measured.

Add evaluation of levels of efficiency: Compare efficiency to outside benchmarks:
Supplier costs

No.	Industry SIC	Year	Notes
1	0	2005	As the costs of health care keep rising, companies are looking at pay-for-performance programs for better quality doctors. The programs are being driven by national health insurers, the government and networks of the nation's biggest employers. Once this coalition has developed new ways to measure the quality of care, the best doctors will be paid several thousand dollars a year in cash bonuses for quality care. The nation's largest employer-sponsored pay for performance plan is Bridges of Excellence. Its analyses show that physicians recognized by the National Committee for Quality Assurance (NCQA) provide diabetes care for 15% to 20% less than doctors not recognized by the NCQA. General Electric finds that the average diabetic GE worker spends $1,800 a year on health care costs vs. $1,500 for patients who see NCQA-recognized doctors. The difference comes from fewer hospitalizations.
2	2000	2007	Despite extensive technology to track consumer behavior, advertisers remain unsure which forms of media effectively convey their message. Two new technologies from Project Apollo are working to change that. The cell phone sized Portable People Meter pings whenever the person carrying it is exposed to properly encoded radio or TV advertising wherever they are. Users of Homescan scan their product purchases into a database. When these technologies are combined, advertisers can track exposure to product advertising and their purchase. When ad campaigns become more efficient, it saves advertisers money.
3	2700	1992	The Yellow Pages Publishers Association established a benchmarking consortium, managed by an outsider to protect proprietary information. So publishers can receive better information on relative efficiency of activities, and they share the cost of analysis.
4	2800	2004	Frustrated over their inability to measure the bang they get for their marketing bucks, advertisers are trying new methods of gauging advertising effectiveness. Proctor & Gamble is an early subscriber to Apollo, a joint Arbitron/VNU project that will track the media habits of 70,000 people. Apollo should yield ad effectiveness using that data plus home scanning of groceries, Internet usage, and frequent surveys.
5	3700	2005	To further offset the higher costs of health care besides higher co-payments and deductibles, companies are testing new ways to find more savings. A group of big employers and insurers found the Leapfrog Group back in 2000. The idea: to identify hospitals that meet criteria such as moving toward computerized systems for ordering drugs, which reduce the risk of dangerous medication errors. Fewer medical errors would mean lower costs. Health plans and insurers now post that information on Web sites in an effort to show employees which hospitals have the highest quality. And under a 2002 contract with machinists and engineers, Boeing Co. agreed to pay the entire cost of a hospital stay after the deductible instead of the normal 95% if the workers use hospitals that use Leapfrog standards.
6	3700	2005	To further offset the higher costs of health care besides higher co-payments and deductibles, companies are testing new ways to find more savings. Two years ago, a number of large employers, including General Electric, United Parcel Service, and Ford, linked up under a program dubbed Bridges to Excellence to identify the most efficient physicians to treat costly conditions like diabetes or heart disease. If doctors meet the program's requirements, the participating companies will pay a $100 annual bonus per employee and encourage workers to use those physicians. Early results for the program are promising. A study found that the average annual cost to treat a person with diabetes was about 15% lower for doctors who participated in the program vs. those who did not. One reason: fewer hospitalizations. Bridges to Excellence is now being expanded to include back disorders and cancer.
7	4512	2005	Six major U.S. airlines have signed on to use an airline reservation system that could save them tens of millions of dollars a year on costly ticket-distribution fees. G2 SwitchWorks Corp. simply connects buyers and sellers of plane tickets and says it can do so for about one-fourth of the cost that the older companies charge, or about $3 or less per-booking instead of the average $12.50.

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