Organisations simply cannot ignore the terms ‘efficiency’ and ‘effectiveness’ whilst practicing Process Excellence. For increasing productivity as well as improving customer service, both of these are essential.
“Efficiency is doing the things right; effectiveness is doing the right things”. – Peter Drucker
Effectiveness of a process is the measure of how relevant the output is to the desired objective. A truly effective process will make customers happy by providing everything right. That is, the right results at the right place time and cost. Hence, measure process effectiveness from the customers’ goal point of view.
Process efficiency, on the other hand, acts as a vital factor in determining productivity. It is a measurable concept. Essentially it is the ratio of ‘useful output to total input’. Hence it requires resource optimization (mainly cost and time) along with maximum waste reduction.
To understand process efficiency we need to measure process time, cost and effort needs.