efficiency-productivity-and-sustainability

Efficiency, effectiveness, productivity and sustainability

• Efficiency means producing goods or services with the minimum amount of waste, time or resources

• Effectiveness means achieving the business’s objectives by doing the right things to satisfy customer needs and meet goals

• Productivity is the volume of output produced per worker (or per hour, machine, etc.) that shows how well available resources are used to generate output

Why are these factors important?

Lower costs

• Efficient use of resources helps reduce waste and cut production costs

Higher profit margins

• Improved productivity and lower costs can increase the amount of profit made per sale

Better use of resources

• Efficient businesses make the most of time, money, staff and materials

Improved competitiveness

• Businesses that are productive and effective can offer competitive prices or higher-quality products

Customer satisfaction

• Being effective means meeting customer needs, which leads to loyalty and repeat purchases

Faster response to demand

• Productive operations allow quicker production and delivery, keeping up with customer demand

Supports business growth

• Efficient and productive businesses can expand more easily and take on larger orders

Measurement of labour productivity

• The labour productivity of a business is measure of the output per worker during a specified period of time

• Businesses aim to increase the level of labour productivity to improve competitiveness

• Labour productivity is calculated using the formula