Increase Operational Efficiency
All organizations can benefit from being more efficient. The primary objective of increasing operating efficiency is to reduce costs and maximize resources. Efficient operations are cost-effective, reducing waste while maintaining quality and service and yet recognizing the need for flexibility to account for and respond to unexpected demands. They are more productive and can free up time, staff, and money to use elsewhere. They allow organizations to deliver more timely solutions to their internal and external customers.
Sometimes it is necessary to radically change how something is done. But generally, the first step an organization should take is to focus on optimizing operational efficiency by introducing incremental changes: doing the same thing, but better. Improving the efficiency of business processes is an iterative procedure, not “one and done” but continual.
Finding opportunities for changes to improve efficiency can be done formally or heuristically, with a focus on evaluating existing methods and processes and looking for sub-optimal activities. It requires identifying what is really important to and are the critical drivers of the organization. This analysis can be done for any operation performed at any level in an organization. The goal is to determine whether a process or system can be improved by fine tuning performance, implementing innovations, cutting costs and/or eliminating tasks that do not add value. Achieving the goal enables the operating unit or process to increase productivity and to add perceived and actual value to the entire organization and its clients.
While operational efficiency is measurable, measuring efficiency is a means to an end. It is not an end in itself. The end is decisions that convert into action to improve operations, with those fact-based decisions grounded in accurate and reliable data that measurement provides. Measuring operational efficiency requires an understanding of how well the organization is turning resources into revenue, or inputs into outputs. It requires collection, analysis and application of the right data focused on the right things, on asking key questions to determine what and how well and how efficiently the organization is achieving its goals.
It does not require collecting every piece of data, just the right data focused on the right things. As Einstein said, “Not everything that counts can be counted, and not everything that can be counted counts!” Learning the difference can make all the difference when it comes to increasing operational efficiency.