How to Compare Operational Efficiency

Operational efficiency is the act of delivering the best product and/or service possible while keeping costs down. It is interesting to note, however, that renowned businessman Henry Ford also cites that operational efficiency means paying the highest wages possible. When it comes to comparing operational efficiency, wages are an important part of the equation. Let’s explore why, then look at other ways to compare efficiencies to ensure your company is running as lean and as effective as possible. Why Compare Wages? Wages and salaries are among the top expenses for most companies, so outsourcing, cutting benefits, and paying minimum wage is often thought to be an ideal way to save money and increase profits. This, however, is not true. The success of any corporation, non-profit, small business, or organization relies very heavily on the people making the products and delivering the services. If those people are underpaid, underappreciated, and unhappy and unhealthy, productivity suffers – and productivity is what drives your business. Compare the wages you pay your team with your successful competitors. Are you in line with their salaries and the benefits and incentives you offer? If not, you can expect your most valuable talent to leave your team and go where they are more valued. And as you know, the costs of finding, hiring, training, and onboarding new talent is a big investment of time and money. Compare Morale Change is never easy. As your company undergoes its operational efficiency process, your staff may feel uneasy about being replaced by automated systems and learning new procedures. Part of the process is open and honest communication with the staff about what to expect. Before you roll out your new operational efficiency plan, survey the staff to learn how they feel about the company and its current operations. Ask them how they feel things can be optimized. They are the ones that best know the ins and outs of the daily operations, and they will have valuable insights into improvements that should be made in their departments. After year one of leaner operations, survey the team again. Compare the two surveys and learn if the changes are working across your brand. After year two, the “settling in” period with the new procedures is long past. Do another survey and compare all three to learn if the operational efficiencies have improved employee morale. Compare Productivity Of course, the main reason to implement operational efficiency procedures is to improve productivity – and ultimately improve profits. Discuss the best ways to achieve operational efficiency with your team and with an outside consultant, who will have an unbiased view of where changes should be made. A big part of the discussion will be about how to measure the results of the changes. Are you looking for lower overhead costs? To have happier staff? More production of your products? An increased service area? Only when you can specifically target your end goal can you decide how best to track your results for annual comparisons.rnInvest in Your FuturernAs the owner or CEO of the company, you have a vested interest in achieving peak operational efficiency. However, you are also quite close to the situation and may be overlooking important aspects that need to change. Bring in a fresh perspective and new, modern operational efficiency techniques by partnering with The Burnie Group. Highly recognized as a top-tier business consulting firm for a variety of industries, The Bernie Group has the methods your company needs to become as efficient as possible, and the tools required to track and compare how well those efficiencies are working year over year. Contact The Burnie Group today to learn more about this and other ways your company can go to the next level.