Reduce the Rate of Cost for the Input Used to Produce the Output

Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.

F. Change source of supply to a less expensive supplier:

A change in the supplier relationship may enable the company to switch to a less expensive supplier. The supplier may be less expensive because it has lower costs or because it reduces the company’s logistic expenses.

Source from new suppliers inbetter locations for costs: Near low-cost labor:
Rural U.S.

No.	Industry SIC	Year	Notes
1	2300	1992	Due to improved communications and technology, companies are able to save by relocating to nonurban fringes. Patagonia put its customer service staff in Montana.
2	3823	1994	When faced with increased competition, Emerson shut down 30+ high-cost plants, shifting production to low-cost regions of the U.S. or out of the country.
3	7389	2006	More and more companies are moving customers service jobs out of high-overhead call centers and into what is possibly the lowest-overhead place in the U.S.: workers' homes. The biggest group of home agents are educated, stay-at-home moms who were preciously workforce MIAs because they lived in rural areas, couldn't afford child care, or were unable to contort their lives into mandatory face-time schedules. Virtual call-center providers like Alpine Access, LiveOps, and Willow are hiring other members of the hidden labor force: itinerant military spouses, seasoned retirees living half the year down South, computer-savvy, disabled veterans – even corporate wives looking to go back to work. More than 75% of home agents have some college, vs. 20% in call centers. Home-based agents are also far more experienced and radically more loyal.
4	7389	2006	More and more companies are moving customers service jobs out of high-overhead call centers and into what is possibly the lowest-overhead place in the U.S.: workers' homes. JetBlue Airways is perhaps the most famous practitioner; all of its 1,400 reservation agents work from home. But the agents are employees. Most of the new Homeshoring jobs are independent contractor positions offered by outsourcing companies. The agents are on the hook for their own health care, computer equipment, training – even background checks. Homeshoring is less likely to risk the accent fatigue, cultural disconnection, and customer rage that offshoring can inspire.

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