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Being effective v. being efficient

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  • #46265

    J. Riotte
    Participant

    As some one who is new to the Lean and SS, I have a question.  Do you believe a process should be more effective or be more efficient?  I understand that the best of worlds would be a balance between the two, but we all know that is not always possible.
    I believe that an effective process can lead to a more efficient process.  My reasoning is that effective process/procedures can lower defects and going over old ground again.
    Being effective produces a desired result, where being efficient may get me where I want to be, but cause problems by sacrificing speed over quality.
    Your thoughts?
     
    J

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    #152638

    JAO
    Participant

    “Efficiency is climbing the ladder as fast as you can. Effectiveness is making sure it’s leaning against the right wall.” Covey
    “Efficiency is doing things right (steps, tasks, etc). Effectiveness is doing the right thing (ethics, principles, etc).” Drucker
    It may be a very efficient process, but is it the right one?

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    #152670

    PV
    Participant

    Hi
    What is important to realize is that any business has internal customers (shareholders or business owners) and external customers (end customers) and both have their set of expectations. We have to cater to their needs simultaneously therefore be effective (accurate, meet target delivery time) and be efficient (optimum productivity, capacity utilization, less rework etc). It is not always true that if you are effective you will be efficient. You might be delivering credit cards to customers before agreed delivery time but using double the amount of resources. Read about Taguchi and the importance of having the process centered (efficient) and with less variation (effective) 

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    #152703

    J. Riotte
    Participant

    Good points.
    I especially like the ladder anaology. 
    It so often seems that we get so caught up in making the process work (efficient), that we forget the people factor, the ones who must live with and make the process work.
     
    J

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    #152891

    Ver
    Member

    Process is the conversion of input into output to attain a certain result.  The result is very important, it is either effective or efficient.  It can be both efficient and effective or just efficient or effective.  The difference is that effective process is for external customer satisfaction while efficient process is for the stockholder satisfaction which is profit.  Actually, there is another one – enjoyable process which is for the employees.
    I hope this will enlighten your inquiry
    VerCQI

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    #152894

    AB
    Participant

    HI,
    I feel the debate of effeciency or effectiveness is compeltely process driven..If the objective of the process is to produce the best output  then i would be concentrating only of the effectiveness of the process.Cost of reaching optimum effectiveness v/s possible losses incurred of producing an acceptable standard output also plays an imp role in deciding on which should recieve more focus. 
     

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    #152897

    Vidyadhar
    Member

    Hi,
    If we draw some analogies of effectiveness & efficiency to products and services, we could say effectiveness is the measure of how good a product or a service is and efficiency is the steps or tasks involved to create that kind of service. By keeping the aim of being effective at all times, you could use optimization techniques like linear programming to find out which efficiency metrics you need to work on….

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    #152902

    Vidyadhar
    Member

    That was a good one Joe… Makes a lot of sense…

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    #152900

    Joe D.
    Participant

    The very best definitions of these words I have seen are the ISO versions defined in the ISO-9000:2000 vocabulary. Effective: extent to which planned activities are realized, and planned results are achieved. Efficient: relationship between results achieved and resources used. Now both of these lend themselves to hard-as-nails quantitative analysis. A matrix or equation can be developed to set up an analysis of a project or to evaluate several projects. I don’t see it as an either-or (effective vs. effficient) situation. Both are needed to evaluate performance and outcomes. Hope this helps.

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    #152914

    JAO
    Participant

    So if your External customers, Stockholders, and Employees (Internal customers) were all on that recent airplane crash in Indonesia, which would be of greater importance, relative to that moment, Effectiveness or Efficiency?

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    #152916

    Deanb
    Participant

    In industry these terms are applied loosely and interchangeably with inputs, outputs, and productivity, making precise understandings of the terms troublesome sometimes. In my graduate econ work these terms were frequently equated with the algebraic equation for Productivity where Inputs (denominator) represented Efficiency and the Outputs (numerator) represented Effectiveness (or throughput), and Productivity represented the relationship betweent he two (I/O = P). Granted, this is only one possible representation of the terms.The econ method for optimizing P was to hold one of the terms constant (I or O) and focus on tweaking the other with respect to the factor held constant. After tweaking say I, then the same was done for O holding I constant. This becomes a cyclical and continuous approach for optimizing P. I have noticed in actual practice that sometimes simple processes can optimize I’s and O’s simultaneously, while complex processes can benefit from the econ approach described above. I am confident that when considering the terms algebraically, it should be obvious that the question “which term is better” is nonsequitur. Each are factors of Productivity which need to be managed with respect to eachother.I have also noticed in actual practice that it is important to understand these terms with respect to “whom” as each can have different stakeholders, drivers, and rewards, which may need to be reconciled when tweaking either. Good luck.

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    #152945

    Deanb
    Participant

    Being effective also involves meeting all stakeholder requirements, which may have a suboptimizing effect on efficiency, but support “sustainable productivity.”The proper bias towards effectiveness (or efficiency) naturally fluctuates and may be influenced by place and time. In sales and marketing the bias may lean towards effectiveness (not how many sales calls it took to get it), whereas in equipment maintenance the bias may tend toward efficiency (the less repair costs the better). The bias can depend on timing also. Most efficiency initiatives tend to eventually hit diminishing returns. This decline can be taken as a “signal” to shift focus (and bias) toward effectiveness issues to maximize the benefit to Productivity.

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    #152966

    G
    Participant

    “Efficiency is climbing the ladder as fast as you can. Effectiveness is making sure it’s leaning against the right wall.” Covey”Efficiency is doing things right (steps, tasks, etc). Effectiveness is doing the right thing (ethics, principles, etc).” Drucker
    I would redefine the Ladder analogy:
    “To have a balance of Efficiency v Effectiveness you need to climb the ladder fast and keep and eye on the wall making sure that its leaning rightly at every step you climb”
    G
     
     

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