Efficiency is the measurement of total productivity per time. Productivity is the total amount of desirable result achieved. A person, team or company is said to be efficient when it achieves set out goals within a set time frame.
Company X is supposed to produce and deliver a ton of powder to its client, Mr. Ben in twenty four hours.
If the team delivers a ton of powder to Mr. Ben, but it takes them more than twenty four hours—say, forty eight hours, the team isn’t efficient. This is because even though the team delivered the powder to Mr. Ben, they used an extra twenty four hours to do it.
If the team delivers a ton of powder within twenty four hours, yet the powder well ground, or lesser than the expected quality, the team is inefficient. This is because even though the team delivered within the expected time-frame, they didn’t deliver the expected quality of the product.
If, and only if the team tasked to do the job produces and delivers a ton of powder—at the expected quality, to Mr. Ben within twenty four hours, the team is efficient. This is because it achieved its goal within the set out time-frame.
HOW TO MEASURE AND INCREASE A TEAM’S EFFICIENCY
- RELATE YOUR PRODUCTION PROCESS TO THE BENCHMARK: a benchmark of any product or process is the highest world standard of that product or process. If your company produces salt; you must—every now and then, compare the process of production of your team to the process of production at world standard. Process of production includes technology, rate, speed, transportation, marketing, delivery.
- ENCOURAGE INNOVATION: Ideas and innovation can help reduce production time. A company that produces a particular product within a time frame might stumble upon an idea that will reduce the time to produce and deliver the product to clients. Ideas do not always have to be technological; for example, shifting production site to a location closer to the site of raw material will reduce transportation costs and hazard: that is, the raw materials can be easily sourced and it takes lesser time to get the raw materials to production time, since production site has been moved closer to the site of raw materials.
- STUDY YOUR COMPETITION’S PRODUCTION PROCESS: If your competition produces the same good as your company at a lesser production cost, you will be forced to decrease your own price too to match the competition’s lower price; however, when you reduce price without a reduction in production cost, your profit margin will reduce—and if the profit margin reduces drastically, you may record a loss. For example, Company X produces a ton of sugar at a total production cost of $5,000 and sells it at $6,256; at this value, it makes a profit of $1,256; Company Y produces the same ton of sugar at $6,000, yet it is forced to charge just $256—which is more than four times lower than Company X’s selling price, due to competitive price. To avoid probable closure due to reduced profit margin, Company Y must find a way to reduce its own cost of production.
- SET OUT GOALS: A goal driven team is more efficient than a team that isn’t driven. When President John F. Kennedy delivered a speech to both houses of congress. He stated that the United State should set a goal the “landing of a man on the moon and returning him safely by the end of the decade.” Nearly nine years after, NASA blasted off Apollo 11. The vision was simple and purposeful. NASA was driven to land a man on the moon within the decade—and they did.
- REWARD PERSONAL EFFICIENCY: When a team member’s productivity and efficiency is high, reward such team member. Rewards are means of appreciation and recommendation from an employer to an employee, to encourage an employee’s hard work and charge such employee to keep working hard for the company. Rewarding one employee on the basis of merit will also encourage other employees to work hard.
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