Brainstorming Ideas: Reduce Unique Intermediate Cost Drivers in Process

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.

1. Warnings and advice

2. Shift ICD to others outside the company with no payment for their assistance

3. Automate an ICD

4. Reduce movement of an Input

5. Reduce errors in process

6. Reduce use of Purchases and Capital ICDs

7. Standardize ICDs

8. ACCEPT RISK OF LOWER PROFITS

1. Warnings and advice Advisories>>
2. Accept the potential of lower revenue Examples>>
3. Accept the potential of higher costs
   1. Do less testing Examples>>
   2. Do less accounting Examples>>
   3. Do fewer quality checks Examples>>
   4. Produce more frequently Examples>>
   5. Substitute expensive Input for higher quality Output Examples>>

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