Operational efficiency in a small company looks very different from operational efficiency in a large company. Small organizations have a few people doing many jobs. Each person is spread pretty thin jumping from one task to another. In one instance, we observed an operations manager involved in collections, vendor negotiations, and cutting checks for accounts payable all in one day. Large organizations, on the other hand, have many people doing one function. A team of people may be responsible for collections while another team of people would be responsible for supplier and vendor contract management.
For small organizations to gain efficiency, roles and tasks must be constantly prioritized. When one person is responsible for so many disparate things, it is very easy to get caught in the minutiae and chaos from switching between activities. But this switching between tasks can have dramatically negative impacts on efficiency. This study performed by the University of Oxford explains the psychology of switching costs (http://www.ncbi.nlm.nih.gov/pubmed/11004877), but perhaps you can relate – regardless of job title or role – to the struggle of getting the right things done at the right time without sacrificing too much of everything else.
For large organizations to gain efficiency, one solution is through standardization. When multiple people contribute to a team that has a specific function, there will be variability in the way certain tasks are accomplished. By following a standard process, communication becomes easier, quality of output improves, and areas of risk or weak spots where errors can be introduced become more exposed. The team can then take corrective action on the weak spots to gain further efficiency.
Operational efficiency isn’t something that just springs up overnight. It requires constant focus and intent to improve and sometimes disrupt the status quo. For organizations that embrace the concept, operational efficiency is a process. What kinds of tools or programs have you employed to improve your own personal efficiency or your organization’s efficiency?