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: Establish internal benchmarks of efficiency:
Supplier costs
| No. | Industry SIC | Year | Notes |
| 1 | 5200 | 2004 | Frustrated over their inability to measure the bang they get for their marketing bucks, advertisers are trying new methods of gauging advertising effectiveness. Home Depot is using a sophisticated computer modeling that matches media plans to sales. The data allow smarter, more localized spending decisions: Newspaper ads may drive paint sales in one region, for instance, while radio works better in another. |
<<Return to Reduce Input Not Producing Output