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.
Time: shift demand for ICDs to reduce peaks:
Delay non-critical work until slower times
| No. | Industry SIC | Year | Notes |
| 1 | 3200 | 2006 | In industries from airlines to glass-making, companies are curbing usage, revamping machinery, and shifting production schedules to offset energy costs. Summitville Tiles Inc. in Ohio turned off ones of its four kilns last winter and laid off 30 of its 250 employees to minimize use of natural gas during the cold winter months when prices peak. The company built stockpiles of ceramic tiles during the warmer months last year in anticipation of the move and is now shifted back into full production once again. |
| 2 | 5044 | 2006 | Matsushita Electric Industrial Co. is taking efficiency to new heights to counter low-cost rivals. The company found that a bottle neck on the assembly line meant that robots sat idle for longer than they were working. So it broke the line into stations, or "cells," that allowed them to double up on slower robots to make things flow more smoothly. To help run so many machines going at once, Matsushita installed new software. |
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