Operational Efficiency

Definition


Operational efficiency consists of identifying those resources available in the Company’s production process and improving them in order to increase the production chain without resorting to higher costs.

How to achieve resource improvement and cost reduction


One of the main problems that companies present is the high costs of production and administrative expenses. These high costs are mainly generated by not being able to identify those resources that could improve the productive chain or by not having procedures or controls to obtain better prices for outsourced services without neglecting the value of the acquired services.

Many times companies ask for expensive consulting services that are not used in a timely manner because they do not have the necessary resources in their productive processes or because the professionals do not have the capacity to carry out these improvements.

Then, how can companies identify those processes or controls that are not efficient in the production chain?

  • First, they must identify their competitors and ask themselves what makes them so successful.
  • Identify within the organization qualified personnel with experience in operational efficiency and who have the attitude and empathy to help other employees in achieving the objectives. In case you do not have such a professional, you should look for a consultant with proven experience.
  • Know in detail the productive or operative cycle of the company, from the request of a need to the reception of the good or service.
  • Similarly, know the negotiations with their customers and verify if the collection chain is adequate in relation to scheduled payments are their suppliers.
  • Determine strategies in order to identify opportunities for improvement for better decision making. One of those strategies is Technology that allows you to reduce costs, time and have the same or better result.

With these considerations and others that result from obtaining knowledge of the processes and controls, the professional will be able, with support from Management, to identify those processes or controls that do not generate value within the Organization and finally leave documented through memos and/or flowcharts the new processes.

Is it enough to identify and improve those resources that allow to increase the productive chain?


Nowadays, companies must have a good management of the Human Talent, because they will be in charge of executing the processes and/or controls. The productive efficiency of the workers will be essential and of value to reach the performances expected by the Company. That is why there must be policies related to training, staff training, recruitment, internal promotion, among others.

In Vargas Alencastre, García and Associates we have highly trained professionals to help companies improve the performance of their operational processes.

We recommend VAG Latam to our allied firm if you have any questions about

Operational Efficiency

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