Operational Efficiency

Operational efficiency is about doing things right. In other words, it means ensuring that the work flows error-free, thus preventing delays and cost increases caused by delays and rework. Or, preventing below-specification products and services reaching the customer. Operational efficiency entails?the capability of an organization to deliver products or services to its customers in the most efficient manner possible, while still ensuring the high quality of its products, service and support. It's not about cost cutting — it is about?HOW?work is done.

Operational efficiency encompasses several strategies and techniques used to accomplish the basic goal of delivering quality goods to customers in the most cost-effective and timely manner. Resource utilization, production, distribution and inventory management are all common aspects of operational efficiency. The most critical factors vary by the nature of the business -- manufacturing, distribution or retail. Your small business must have exceptional efficiency to compete with larger companies with greater economies of scale and bargaining power with vendors.

Factors of operational efficiency

Operational efficiency is gained through a company by cost-effectively streamlining its base operations while eliminating redundant processes and waste. Generally, this is done by focusing on resource utilization, production, inventory management and distribution.

·???????? Resource utilization is focused around minimizing waste in production and operations areas.

·???????? Production focuses on making the production environment as organized as possible. This includes ensuring that employees and equipment are working as efficiently as they can to increase production.

·???????? Distribution focuses on ensuring efficient handling of the end product, including routing and delivery.

·???????? Inventory management includes producing and managing enough inventory to meet the demand, but with as little excess inventory as possible.

How to increase operational efficiency

Different strategies may be used to accomplish the goals of operational efficiency and can differ from company to company. When asked to improve operational efficiency, a company will usually change inputs and outputs, such as giving less input for the same output, providing more output for the same input, changing the amount of inputs or increasing both input and output.

Organizations should also focus on:

·???????? Monitoring performance by setting up dashboards or internal meetings.

·???????? Identifying and minimizing waste, such as ridding bottlenecks.

·???????? Creating benchmarks, which can give your organization an idea of where they stand versus the competition.

Here are five tips for increasing the efficiency of operations in your workplace.

1. Always keep the lines of communication and information open to employees. The left hand not knowing what the right is doing isn't a cliché. It’s one of the most famous complaints in business. Inability to communicate and miscommunication are the major reasons a business can seem slower than others. Secure and safe lines that allow employees to interact – whether technological or face-to-face – not only have to be available.
2. Keep Your Tech on Top Keeping technology up to date ensures the business stays competitive. This is an expenditure that should always be in the budget.
3. Training Whether it’s the IT guy (or equivalent), the receptionist at the front desk or the sales rep glad-handing clients, make sure they know the latest strategies?and tactics behind their profession. Find the most cost effective ways to keep the staff knowledgeable through in-house or off-site training.
4. Stop Killing the Trees Reports show one of the most wasteful business activities is printing. Any employee who’s ever stopped to pick up their printout will admit there can be mounds of paper that never gets picked up.
5. Enhance Employee Satisfaction There is no greater employee grievance than feeling underappreciated. No, the average business can’t go the distance, like?Face book, with halls where you can ride skateboards. But it is vital every business cultivate an environment that not only challenges employees but comforts them. Satisfied employees give 100 percent all the time.

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Operating more effectively and efficiency benefits management, employees and customers. It needs to be a priority for every business.

Thanks.