Efficiency versus Effectiveness
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The document discusses the differences between efficiency and effectiveness. Efficiency refers to doing things right and focuses on process and output to input ratio. Effectiveness refers to doing the right thing and focuses on meeting desired outcomes. The document uses the example of cellular manufacturing in a nut production industry to demonstrate how efficiency leads to effective results. Elements like material handling, inventory, quality, people, and customer benefits are discussed in terms of how efficient processes result in more effective outcomes. The conclusion states that efficiency is a productivity metric while effectiveness is a quality metric.
Efficiency versus Effectiveness
- 1. ASSIGNMENT NO. 1 TITLE: EFFICIENCY VS. EFFECTIVENESS NAME: PURVA VERMA Batch: 2013 SUBMITTED TO: Dr. Rao
- 2. cbsolution.net We can see from this diagram that utilisation of resources through an efficient process produces the desired output to signify its effectiveness. EFFICIENCY EFFECTIVENESS Doing things right Doing the right thing Process focused End focused Restricted to the present needs Involves thinking long term Output to input ratio and focuses on getting Constantly measures if the actual output the maximum output with minimum meets the desired output. resources For example, the HR process of a company may be efficient i.e. the HR department is able to hire employees quickly, decrease cycle time for approvals etc. But it may be ineffective because in the hurry to hire people quickly, they often miss out on the perfect person for that job. Efficiency says”Hire now” while effectiveness says” Hire the right person”. We can distinguish between efficiency and effectiveness further with the help of the following industrial example: INDUSTY: Manufacturing CONCEPT: Cellular manufacturing
- 3. Cellular manufacturing is a manufacturing process that produces families of parts within a single line or cell of machines operated by machinists who work only within the line or cell. A cell is a small scale, clearly-defined production unit within a larger factory. This unit has complete responsibility for producing a family of like parts or a product. All necessary machines and manpower are contained within this cell, thus giving it a degree of operational autonomy. A nut is a type of hardware fastener with a threaded hole. Nuts are almost always used opposite a mating bolt to fasten a stack of parts together. These are used as an integral part of almost all the light and heavy machineries we see. Cellular manufacturing is the technique which has made the production process of these units highly efficient and effective. We can see how each element of cellular manufacturing is highly efficient and leads to desired effective results. It demonstrates the cause and effect relationship between efficiency and effectiveness. MATERIAL HANDLING ELEMENT EFFICIENCY EFFECTIVENESS Inter department moves Few 50%-90% improvement Routings Simple Automation possible Route structure Fixed Simplified INVENTORY BENEFITS ELEMENT EFFICIENCY EFFECTIVENESS Lot sizes Small 50%-100% improvement Stocking policy Made to order Saves space Throughput time Weeks Hours QUALITY BENEFITS ELEMENT EFFICIENCY EFFEVTIVENESS Responsibility Focused in cell 70%-90% improvement Approach Self-enforced Happier teams Motivation Pride Peak performance Problem solving Team based Shared responsibility and permanent solutions PEOPLE BENEFITS ELEMENT EFFICIENCY EFFECTIVENESS Communication Quick and positive Quality and coordination Teamwork Enhanced Effective teams Motivation Strong and positive Self-motivated employees
- 4. Supervision Easy and localised Fewer supervisors CUSTOMER BENEFITS ELEMENT EFFICIENCY EFFECTIVENESS Delivery Speed Fast 70%-90% improvement Delivery reliability Consistent and high Upto 90% improvement Quality Consistent and high Trust and integrity CONCLUSION: Efficiency is productivity metric and effectiveness is quality metric. Being efficient means to spend less time on something, spend less money on something or spend less effort (or number of workers) on something. Being effective means to do the job well. In other words, the output (finished product) is of high quality.