| Miriam-Webster defines efficiency as
"...productive without waste." In business, waste means money. So being
efficient has a direct impact on your company's bottom line.
Is your company doing things efficiently?
My guess is that there are opportunities that are not being
taken advantage of.
Take This Simple 4-Question Organization Efficiency Quiz
to Discover Exactly How Productive is Your Organization
1. Do you have standard processes and procedures?
This is a simple concept, but requires a great deal of
discipline and executive support to complete successfully. Essentially, it means getting
everyone in your organization to do things the same way. A large banking client of mine
had various methods of contacting suppliers to place orders for products. Some employees
would send emails. Others would telephone. And, still others would send faxes. As a
result, suppliers were delivering products two or three times per day to the same
location. Each delivery had a $35 charge and the company was spending more than $25,000
per year on delivery charges from only one supplier!
Deliveries were reduced to two times per week simply by
standardizing the ordering process and having the supplier consolidate orders. Costs were
reduced to less than $5,000 annually. That is an 80% cost reduction and a $20,000 savings
just by changing the processes with one supplier. Extrapolate that over your entire
supplier base and you can see the opportunities that are presented to your organization.
2. Are you using current technology?
There is some amazing technology out there and it is good
advice to start using it. When possible, use web meetings, conference calls and especially
e-commerce solutions. This reduces travel and operating expenses by a significant amount.
One of my clients reduced their paper usage by more than 80% by sending purchase orders
and invoices through an e-Commerce solution, and storing their purchasing documents in an
online repository.
A pharmaceutical client implemented an electronic ordering
system to replace their paper-based system. Before the new system, nine employees reviewed
a typical order before the order could be sent to a supplier. It took as long as six weeks
for the supplier to receive the order and fulfill it. Currently, suppliers now receive
more than 95% of the orders within 48 hours.
3. Are you making everyone accountable?
A couple of years ago, one of my healthcare clients had
created an organizational structure with no accountability. Simple decisions would take
weeks, include many different resources and were often revisited after the decision was
taken. After some analysis, we implemented a new organizational structure where roles and
accountabilities were clearly documented and understood. Employees were given clear
decision-making responsibilities and knew when escalation was required. Productivity
improved significantly and most decisions were made quickly.
Does everyone in your organization know what their exact
role is? Are they accountable for their successes and failures?
On any successful sports team, there are superstars and
role players. No team wins a championship with only one or the other. You need a mix of
both.
All successful companies have their superstars and their
role players. The key is to create a structure and culture that supports the goals and
objectives of your organization and removes ambiguity about people's roles and
responsibilities.
4. Are you striving to improve your business efficiency on
a regular basis?
An organization should never be satisfied with the status
quo. Most of the top-performing companies are constantly improving on what they did
yesterday. Through employee feedback, waste reduction, better use of technology and
improving customer service, organizations will improve results directly related to their
bottom line. Those results may come in the form of increased customer retention, increased
profit, improved employee satisfaction and reduced administrative costs.
If you found yourself not taking advantage of the
opportunities in my organizational efficiency quiz, you are not alone. But if you want to
benefit from reduced costs, increased profit, better employee retention and improved
customer satisfaction, then you need to take action today. Now, who could refuse benefits
like that? |
