It’s Tough to be in Business Without it.
Efficiency is one of the most essential attributes businesses aspire to today. Nowhere is this more the case than in metalworking. The concept is applied to lean strategies, Overall Equipment Efficiency (OEE), and almost every other aspect of manufacturing that requires effort.
The concept of efficiency applies to virtually every type of business and even across humanity, for that matter. If you interpret it at face value, efficiency is the ratio of a machine or a process's valuable work to the total energy expended or heat taken in. Considering your entire enterprise, that definition can be a lot to unpack. In the simplest terms, efficiency measures how a company acquires and converts raw materials and labor into products and services that generate revenues and subsequent profits.
An efficiently run business should be smooth-running; companies that invest in continuous improvement will keep getting better at what they do, adding to productivity and profitability. Every department in an organization, not just manufacturing, should routinely do an internal assessment to measure and improve efficiency.
- Operational efficiency
- Financial efficiency
- Labor efficiency
- Process efficiency
- Sales and marketing efficiency
Tap Into Other Departments
Everyone thinks their department is unique, but you would be surprised. When it comes to concepts like communication, process mapping, use of automation, good work habits, and time management, a lot can be shared cross-departmentally.
Consider Outsourcing
All departments within an organization will typically look to the outside for value-added products or services that provide expertise or competency not found within the organization. When considering whether or not to outsource all or part of a process, you should ask yourself the following questions:
- Is this a competency we lack, and can we be more efficient and improve overall quality by outsourcing it?
- What improvement can we expect – better, faster, more cost-effective?
- What are the net cost ramifications compared to the operational benefits?
Realistic Metrics
In manufacturing, efficiency is typically measured by OEE. 100% OEE is perfect production: manufacturing only good parts as fast as possible, with no stop time. 85% OEE is considered world-class for discrete manufacturers. For many companies, it is a suitable long-term goal.
Not every department within an organization can be measured this way, but an acceptable metric must be adopted because there can be no management without measurement.
At TCI Precision Metals, we are committed to constant improvement. As a provider of precision materials to our customers, we must embody the tenets of this article to deliver efficient solutions consistently.
So, here’s to efficiency!
Thanks for reading-
Ben