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.

C. Eliminate customer activities with low value to the customer

Reduce ICDs by eliminating activities for which customers either will not pay or will not pay enough to cover their costs.

3. Businesses

Declining profitability

No.	Industry SIC	Year	Notes
1	2030	1996	Stokely USA (a big name in veggies) will sell its three frozen-processing plants and exit that side of the business, among low industry profits.
2	2621	2006	In an effort to improve inventory management, Weyerhaeuser Co. is looking to sell its fine paper business, which accounts for about $2.4 billion, or one-tenth, of total revenue. The business is helping drag down the company because of soft demand and tough competition.
3	2671	1997	Kimberly-Clark said it would move to become a pure consumer-products business, exiting from the cyclical pulp business by selling three mills.
4	2834	2004	For many midsize drug makers, surviving has meant scaling down their grandeur ambitions of the past. Ten years ago, Schering was a classic German conglomerate, making fertilizers as well as pills. But in recent years it has sold a number of businesses, laid off thousands of employees, and narrowed its drug development to four therapeutic areas.
5	2840	1992	P&G announced plans to sell its wood pulp business, which it uses as a source of paper for its paper towels, diapers, and other consumer products. The wood pulp industry has been depressed recently, and P&G wants to focus on its consumer products.
6	3400	2004	In today's cut-throat world, companies are fighting to say ahead by cutting costs. A more systematic approach to shedding costs is getting rid of operations or businesses that aren't big money-makers and focusing on the ones that can bring in the most profits as you come out of the downturn. Raven Industries Inc. started shedding industries, including some it had been acquiring during the 1990s. It got out of low-margin businesses like pickup truck supplies and focused on more profitable products such as high-tech farm equipment.
7	3711	2005	Ford Motor Co. plans to overhaul its global purchasing process to offer larger, long-term contracts to a smaller group of suppliers on future models, a switch that could save billions of dollars a year. As part of its makeover, Ford has announced plans to cut 2,700 salaried workers this year in North America, sold rental-car division Hertz, and unveiled plans to ramp up production of hybrid-engine vehicles.
8	4212	2004	After 15 years of trying to build a global land-air shipping empire, CNF Inc. has bailed out of the airfreight business, selling the subsidiary to UPS for $150 million. The venture failed because of the lack of ties between trucking and air freight.
9	5045	1996	Merisel just agreed to sell its big European and Latin American operations to CHS Electronics (about 25% of ops).
10	5331	1986	Kroger will sell most of its SupeRx drugstore division in a leveraged buyout with the rest of the chain sold separately as real estate.
11	6311	1996	Prudential has shed a large reinsurance business, has agreed to sell its mortgage origination and service lines, and is trying to slice $800 million from its expense base. Prudential's strategy is to shed businesses with volatile earnings to focus on core operations.
12	6411	1996	The old Travelers insurance operation, acquired by Primerica, has been stripped of its health-insurance unit & had $400 million taken out of expense base. Employment at original Travelers ops – 37k in 1987 – now stands at 15k.
13	7372	1993	Lotus' chairman considered selling spreadsheet business so that Lotus could concentrate on building its growing network software business.
14	8731	1996	Corning Inc. is looking to unload its faltering laboratory services division.

<<Return to Reduce Unique ICDs in Process