Operational Efficiency - Vinsys IT Services (I) Pvt. Ltd
Operational Efficiency
Operational efficiency is primarily a metric that measures the efficiency of profit earned as a function of operating costs.
Operational Efficiency
Operational efficiency is primarily a metric that measures the efficiency of profit earned as a function of operating costs.
As a businessman you should list your company’s processes and follow them to discover whether they’re being performed in the correct manner (generating profit, offering quality and avoiding waste, for example). If you are able to identify failures in your processes, try to study alternatives to improve them.
Operational efficiency consists of knowing your own company. You should also pay attention to all of your business’s results and not just the final results. Don’t confuse efficiency with cutting costs, because it has other objectives besides savings, such as improving your company’s productivity. This is why associating it with layoffs is a mistake.
How to achieve this efficiency?
Productivity vs. Efficiency
Productivity serves as a measurement of output, normally expressed as some units per amount of time (for example, 100 units per hour). Efficiency in production most often relates to the costs per unit of production rather than just the number of units produced. Productivity versus efficiency can also involve analysis of economies of scale. Entities seek to optimize production levels in order to achieve efficient economies of scale, which then helps to lower per-unit costs and increase per-unit returns.