In 2004, UPS announced that its trucks will no longer make left turns. A year later, the company reported that it had saved tens of millions of dollars. By cutting “wasteful” steps in business operations, UPS was able to increase efficiency by an incredible amount.
A few years ago, UPS decided to use routes that avoided left turns as they were the ones most likely to be be stopped at a traffic light where fuel was wasted. As a result, UPS consumed fuel that was 190,000 liters less than the previous year. Their new strategy was a success in bringing significant savings to the company in fuel costs.
All of this was made possible by the efficient management of business operations that eliminated waste and reduced inefficiency. Identifying and removing steps or input that are “wasteful” to a business are key to making it efficient.
Reducing steps in operations
Operations are essentially the processing of input into output. An efficient organization is one which takes the least number of steps to produce output. They should aim to use minimal energy, money, and resources without compromising on quality. To increase efficiency in your business, eliminate steps that aren’t necessary or merge them into another step.
One way to cut steps is to streamline repetitive tasks that take a lot of time between steps in processing. Have them done in bulk, in advance or outsource them to save time, money and energy.
Productivity and operations
Numerically, productivity can be calculated by dividing total outputs produced by total inputs used. According to this equation, fewer inputs and higher outputs increases productivity which in turn increases efficiency.
Operations focus on the end customer
Operational efficiency is applicable to both services and goods. In either case, you must always focus on the end customer.
In the midst of managing operations – processing inputs and delivering outputs – it can be easy to lose sight of your main objective: customer satisfaction.
Always have the customer who will be using the product or service in mind whenever making changes to the business for efficiency. Ask yourself three questions at every decision:
What inputs can I remove that won’t affect the final product?
What steps can I eliminate that aren’t important to the end customer?
How can I make the output more efficient for the business and user?