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Operational Efficiency

Definition

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

How to improve resources and reduce costs?

One of the main problems faced by companies is high production costs and administrative expenses. These high costs are generated mainly by not being able to identify those resources that could improve the production chain or by not having procedures or controls to obtain better prices for outsourced services without neglecting the value of the services acquired.
Companies request expensive consultancies a lot of times that are not taken advantage of in a timely manner because they do not have the necessary resources in their production processes or because the professionals do not have the capacity to carry out these improvements.

So how can companies identify those inefficient processes or controls in the production chain?

  • The first is to identify the competition and ask yourself 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 collaborators achieving the objectives. If such a professional is not available, a consultant with proven experience should be sought.
  • To 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.
  • Likewise, to know the steps taken with your customers and verify if the collection chain is adequate with the scheduled payments to your suppliers.
  • To determine strategies to identify improvement opportunities for better decision-making. One of those strategies is the Technology that allows reducing costs, time and has the same or better results.
The professional will be able to identify those processes or controls that do not generate value within the organization and finally leave documented through memorandums and/or flowcharts the new processes due to these considerations and others resulting from obtaining knowledge of the processes and controls along with the management support.

Is it enough to identify and improve those resources that enable the productive chain to be increased?

Nowadays, companies must have good Human Talent management since they will be the ones in charge of executing the processes and/or controls. The productive efficiency of the workers will be essential and meaningful to achieve the performance expected by the Company, being the reason to have policies related to training, personnel training, recruitment, internal promotion, among others.
At Vargas Alencastre, García y Asociados, we have highly qualified professionals to help companies improve the performance of their operational processes.

We recommend our partner firm VAG Globals if you have any questions about

OPERATIONAL EFFICIENCY

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