Efficiency is one of the most important concepts in different manufacturing industries why? In simple words, neglecting the importance of effective efficiency can gradually lead to the bankruptcy of a company. Although It is right that efficiency cannot be completely exact and there will always be some inevitable predicaments, This fact does not mean that measuring efficiency will not be helpful.

Nowadays business is becoming more competitive therefore companies need to make the most of their resources, which is one of the most important factors in regards to effective efficiency.

How to Measure Effective Efficiency 

As we already explained, efficiency cannot be measured exactly, as there are too many relative factors involved, so instead of spending lots of time and money on measuring efficiency let’s measure Work Efficiency. A simple formula to calculate it can be determined as follows:

efficiency = output / input 

or

Efficiency = Production / Total cost 

As this equation suggests, to increase the efficiency you have to increase your production or decrease your total costs or do both. 

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Again WHY on earth we should calculate efficiency?

One important thing you should consider is the way efficiency measurements may work. For example, imagine two different companies having the same equipment. There is a high chance that measured efficiency levels will be close, while in reality, they are not. This error shows how critical other environmental factors are. 

Effective efficiency has a direct relationship with the time you and your resources including your equipment spend on each task. If a workplace is disorganized, the efficiency level will decline. A factor that measures how “disorganized” a company is, may look tempting, and at the same time might not seem a favorite option for companies at first glance.