What does efficiency mean?

In business and manufacturing, efficiency is the measurement of how much waste is involved with producing a specific product or service. The more efficient something is, the less waste there is. While in most cases it is impossible to be 100% efficient, that should always be the goal. Companies that can work to constantly improve efficiency will go a long way toward improving profitability, improving service, and becoming successful.

Types of Waste

When measuring efficiency in any situation it is important to know what types of waste can be present. Waste can come in many different forms, and whenever any type of waste can be eliminated it will mean that a process is more efficient.

The following are some of the different types of waste that can cause a reduction of efficiency in any company or process:

  • Wasted Energy
  • Scrap Materials
  • Wasted Motion
  • Wasted Products
  • Excessive Inventory
  • Wasted Time
  • Storage or Warehousing of Products

There are many other types of waste as well. When running a business, eliminating any type of waste from a process can lead to long term benefits that will help to build success. Since most actions in a business are repeated regularly over time, one efficiency improvement will be multiplied many times in the coming years.

Efficiency Improvement Strategies

Companies that are attempting to improve efficiency will typically use proven strategies to identify and reduce waste. The following are various different types of efficiency improvement strategies. Some of these are focused specifically on eliminating waste, and others are proven systems that may have waste reduction as a secondary benefit to the overall strategy improvement:

  • Lean Manufacturing
  • 5S
  • Six Sigma
  • Visual Communication

There are many other types of efficiency improvement strategies that can be used. Formalizing the efficiency improvement can help to guide a company, a department, or even an individual toward specific goals. Improved efficiency is always a good thing and can help everyone involved.


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