Efficiency and Effectiveness - Excellence - Terms Relevant to Industrial Engineering

 2025 - A to Z Industrial Engineering - Blogging Theme - Industrial Engineering Benefits the Society and Organizations

Industrial Engineering - Systems/Processes/Methods Improvement Using Engineering solutions creatively.

Industrial Engineering - Prime focus - Productivity Improvement.

Productivity improvement gives National Prosperity and Organization Prosperity.

Source: https://www.linkedin.com/posts/national-productivity-council-gandhinagar_cartoonseriesabr10-productivity-economicgrowth-activity-7301162658278379520-eyyl

A to Z of Industrial Engineering - Blogging Challenge April 2025 - Proposed Posts

https://nraoiekc.blogspot.com/2025/02/a-to-z-of-industrial-engineering.html

Existing Collection of Articles

A to Z of Industrial Engineering - Principles, Methods, Techniques, Tools and Applications

https://nraoiekc.blogspot.com/2018/06/a-to-z-of-industrial-engineering.html

Efficiency and Effectiveness - Excellence - Terms Relevant to  Industrial Engineering

Peter Drucker on Efficiency and Effectiveness

Peter Drucker brought the importance of efficiency in his book Management: Tasks, Responsibilities. Practices in the chapter titled "The Dimensions of Management." He said, "Effectiveness is the foundation of success - efficiency is a minimum condition for survival after success has been achieved. Efficiency is concerned with doing things right. Effectiveness is doing the right things." Industrial engineers need not argue with Peter Drucker. They can accept the view of Drucker, that effectiveness is the foundation of success of managers select the right things. Industrial engineering is focused on providing a service to managers in  helping his deparment or his organization in doing things right. Industrial engineering is a service to managers in managing their organization.

Drucker also emphasized in another paragraph, "Of course efficiency is important. Even the healthiest business, the business with the greatest effectiveness, can die of poor efficiency. But the the most efficient business cannot survive, let alone succeed, if it is efficient in doing the wrong things, that is, if it lacks effectiveness. No amount of efficiency would have enabled the manufacturer of buggy whips to survive." So, Drucker emphasized the importance of efficiency in the survival and growth of business organizations and also brought out the obvious fact that an organization must have the skills to deliver what market wants. Organizations have to produce what market wants and not what they are efficient at. When market conditions change, organizations have to take up new products and services, produce and market them even thought they are not very skilled at the new activities. But over a period of time, they need to make them efficient.

Efficiency, the dimension which is core concern of industrial engineering discipline is an important dimension of management and industrial engineers must provide efficiency services to organizations effectively.

What is Productivity?

Peter Drucker has written in 'The Practice of Management', "Management has to give direction to the institution it manages. It has to think through the institution's mission, has to set its objectives, and has to organise resources the results the institution has to contribute." Further he adds that to fulfil its mission and achieve its objectives "It has to organize work for productivity, it has to lead the worker toward productivity and achievement."

The productivity that Drucker mentions is efficiency in effective activities. Effective activities contribute to the fulfilment of mission of the enterprise and achievements of its objectives. Managers have to select the right objectives and goals,  assemble right resources and then lead the members of the organization toward efficiently working toward the goals. It is in the area of efficiency that industrial engineers contribute and when they are able to make effective activities more efficient within a plan peiod, they are helping  the organisations in becoming more productive.

Excellence

Continuous improvement can be defined as an ongoing effort to improve an organization’s processes, products, or services over time. While continuous improvement is essential, it is generally not enough. On the other hand, operational excellence is about applying the right tools and processes to create an ideal work culture that empowers employees to take ownership of the operational flow, thus ensuring that continuous improvement remains constant.

What is operational excellence?

Operational excellence refers to the process of executing a business strategy more reliably and consistently than the competition, resulting in increased revenue, lower operational risk, and lower operating costs.

https://kaizen.com/insights/operational-excellence-organizational-improvement/

Productivity and excellence depend on people

The payoff that matters is sustained, higher productivity to fuel innovation and growth.

Achieving operational excellence

McKinsey’s assessment of operational excellence, the Operational Excellence Index (OEI) evaluates organizations on their level of adherence to more than three dozen management practices. An analysis of organizations that have repeated the OEI assessment over the course of a transformation finds a crucial inflection point: once an organization sustains a score of at least 40 (on a 100-point scale) for 18 months,  it is much more likely to retain a score of at least 40 even after an assessment gap of several years. In short, by adhering to OEI practices for 18 months to reach a threshold score, an organization is substantially more likely than its peers to sustain improved performance.

What it takes is leaders who continually monitor all five operational-excellence elements.

What’s missing from these change efforts, according to survey findings from 2010, 2015, 2017, and 2021, is a focus on the people side of productivity, performance, and technology.

Read the article for five elements.

https://www.mckinsey.com/capabilities/operations/our-insights/todays-good-to-great-next-generation-operational-excellence

More on Operational Excellence

https://nraomtr.blogspot.com/2015/03/what-is-operational-excellence-in.html     - Detailed content.

https://nraoiekc.blogspot.com/2023/01/operational-excellence-concept-practice.html

https://nraomtr.blogspot.com/2015/03/the-ibm-cognos-8-business-intelligence.html    IBM tool for monitoring OE.

https://nraoiekc.blogspot.com/2024/10/asq-certified-manager-of.html

https://nraoiekc.blogspot.com/2023/09/design-thinking-for-operational.html

https://nraoiekc.blogspot.com/2023/08/operational-excellence-ametek.html