5 Ways To Improve Operational Efficiency And Productivity
- 16 Sep 2021
Operational efficiency refers to the completion of tasks using minimal resources. Often, it’s determined by evaluating the ratio of inputs that a business uses vis-a-vis the outputs it generates. On the other hand, productivity refers to a company’s ability to achieve more with average resources.
Often, operational efficiency and productivity determine the overall performance of business systems, including supply chain systems like inventory management and front-office processes like customer service and marketing. Companies that manage to improve their operational efficiency can increase productivity and reduce costs.
To maintain operational efficiency, organisations must monitor their processes continuously to identify outdated or ineffective functions. They also need to allocate the resources that are required to optimize productivity and realize the desired outcomes.
If you’re running a business and are looking to improve operational efficiency and productivity, here are five things you need to do to achieve this:
1. Use Integrated Solutions
Integrated solutions are the modern way of improving operational efficiency in business processes. Integrating internal systems allows for automatic sharing of data and operation functions from different processes, which optimize workflows. To integrate your systems seamlessly, invest in a good internet connection. If your business is located in a rural area, talk to suppliers of rural broadband to find a solution that works well.
Integration also eliminates manual consolidation processes that consume time, effort, and labour. This enables businesses to save resources and lower the risk of human error. Since they replace physical documentation of the business process, integrated solutions can go a long way in ensuring that companies reduce paper usage and wastage while enhancing communication among teams by sharing data virtually.
Businesses that adopt advanced integration solutions can improve operational productivity and efficiency by accessing real-time data, boosting customer service, increasing transparency in internal processes, and utilizing analytical reports.
2. Prioritize Employee Needs
As you work on the monetary and quantity aspects of your business, pay attention to your employees. Remember, the only way to make your company successful is by building great teams and nurturing strong relationships.
To do this, prioritize the needs of your employees by incentivizing them, increasing employee satisfaction and retention, and providing training opportunities. To maintain employee focus on operational efficiency and productivity, consider establishing key performance indicators (KPIs). Make it a habit to recognize and reward top performers.
Most importantly, ensure that your employees get training on business processes. Consider training them on your company’s standard operating procedures and providing them with methodology reports for quick referencing.
3. Pay Close Attention To Order Fulfilment
As your business grows, order volumes will increase significantly. This means that you need to invest in the right tools to support your order fulfilment operations and meet the ever-changing customer demands. You can create a conducive environment for efficiency and productivity in this aspect of your business by implementing replenishment software and ensuring that your systems are routinely maintained.
4. Invest In Customer Service
If your business is service-oriented, you need to enhance customer service to improve operational efficiency and productivity. A great way to boost your customer service function is to invest in backend operations. These include vendor compliance and relationships, as well as enterprises that fulfil customer orders more efficiently and resolve customer issues in a timely and effective manner. Overall, completing supply chain phases without discrepancies goes a long way in improving customer satisfaction.
5. Identify Bottlenecks And Eliminate Them
To boost efficiency and productivity, businesses should identify bottlenecks that delay internal operations and eliminate them immediately. They can easily do this by integrating reporting and analysis tools in every component of their operations.
A great example of a tool that helps in eliminating bottlenecks is the Pareto charts. With this tool, a business can collaborate details from bar and line graphs to generate occurrence frequencies and percentage makeups in production processes. In addition, Pareto charts show the functions that contribute most to the successful completion of operations and which ones hamper the outcomes. This enables businesses to focus on implementing effective alterations.
Businesses are always seeking to maximize profits while minimizing costs. Improving operational efficiency and productivity is one of the most effective ways to achieve these results.
To improve efficiency, businesses must be ready to focus on hidden processes to identify aspects that work well and those that don’t. With this information, the management can make the necessary changes to improve efficiency and productivity. If you’re looking to improve operational efficiency in your business, apply any of the strategies discussed above and you’d see better results in your operations.