Whether you have a big business or a small business, you always have a couple of things in common. One of those common things is cutting down costs.

In fact, according to McKinsey, 79% of all companies have cut costs in response to the global economic crisis, but only 53% of executives think that doing so has helped their companies.

Why so? Because merely reducing expenses and costs are not enough for a business to succeed. Data shows that less than 30% of cost-cutting programs achieve their goals, and less than a fifth of these are able to harvest consistent rewards over the following three years.

Clearly, cutting down costs isn’t doing much. Here is where you must understand that your business should focus more on improving its operational efficiency.

What’s operational efficiency, you ask? Well, we’ll tell you all about it in this blog!

Not only that, we will walk you through the various ways you can improve the operational efficiency of your business!

Excited? Then, dive right in!


What is Operational Efficiency?

Operational efficiency is a company’s ability to reduce the wastage of time, effort, money, and material to produce quality goods and services.

It can be defined as the ratio of a company’s inputs, such as costs, employees, material, etc., and outputs, such as quality goods, revenue, customer acquisition, etc. to determine the overall performance of your organization.

In essence, operational efficiency is all about the techniques and strategies used to deliver quality goods at a lower cost.

This means that the lower the costs, the greater the efficiency.

Now you’re probably wondering why operational efficiency is such a big deal for business. Well then, let’s find out, shall we?


Importance of Operational Efficiency

The main objective of a business is to produce goods and services and earn profits from it. And if your business is not efficient with the methods and strategies it uses, then you just end up wasting a lot of money, time, and effort.

That’s why it’s crucial to have operational efficiency. It ensures that you create high-quality products and services in a cost-effective manner while reducing any wastage of resources and time.

Simply put, we can say that a boost in operational efficiency helps:

  • Increase your output by making more from the same input
  • Reduce your costs by making the same outputs from fewer inputs
  • Helps business grow by making more outputs from fewer inputs

Not just that, better operational efficiency in your business means that you and your employees have some spare time in your hands for your personal matters. It basically ensures that you have a better work-life balance while being productive at the same time.

In a nutshell, operational efficiency only brings in benefits for you, your employees, and your business. So it’s time that you tried to improve the operational efficiency of your business.

How? Scroll down to find out!


11 Ways To Improve Operational Efficiency

1. Know and Understand Operations

The first thing you have to do to ensure that there is operational efficiency for your business is to understand and study your operations and find out where bottlenecks or congestions are happening in your company’s workflow or supply chain.

You can do this by conducting evaluations, metric analysis and formal internal audits. With this, you can identify and evaluate areas of traffic and inefficiencies and make changes by taking the necessary steps.


2. Refine Business Processes

Once you have an understanding of how your operations work, you have to review and identify areas and processes that need to be refined. These could be anything from repetitive tasks to administrative works that take up a chunk of your time.

Trying to refine your processes can help bring in operational efficiency. You can do this by incorporating automation into your company. This will help your company from spending too much time on repeatable tasks and instead focus on other important aspects.


3. Carry Out Process Mapping

Process mapping means that you map out exactly what your business does. It lays down who is responsible for what and how to do it to succeed. It’s basically like a flowchart with a sequence of steps to be followed.

Conducting a process mapping is great for your business because it acts as a guide and foundation to carry out tasks and helps focus on each step. It also clarifies roles, eliminates confusion, reduces errors, and ensures consistency in all your business operations.

All in all, this process mapping is a surefire way to improve the operational efficiency of your business.


4. Centre on Fulfilling Orders

If you want to improve your company’s operational efficiency, it is crucial that you nurture an environment for it. You can do this by centering your focus on fulfilling all your orders.

Make sure that you have an organized system in place and the right tools to meet the demands and challenges even before it arises.

This means preparing your company for all types of order fulfillment and maintenance and implementing advanced replenishment software, thus creating an environment conducive to increased productivity and efficiency.


5. Ensure Regular Training

When your staff and employees are well informed and prepared, then it becomes much easier to achieve operational efficiency. This is why it is important that you provide them with regular training.

Conduct mentoring or coaching programs within your company, offer education on systems and tools, provide cross-training on processes, and document all methods. This is will keep your workers informed and updated on all the best practices and ensure that they thrive and succeed in achieving your goals.


6. Adopt Remote Working

Another simple, yet effective way of improving operational efficiency is by adopting remote working.

By using cloud-based technologies or platforms, your company can collaborate and work remotely even when you are not physically present in your office. This will not only reduce your operational expenses and costs, it will also improve workplace productivity.

A documentation and collaboration platform that can help you do this is Bit.ai. It lets you collaborate with your teams by creating infinite workspaces and folders around projects and departments and helps keep all your work organized.

With Bit’s real-time collaboration feature, you can invite people from multiple teams and departments to join you and work together in real-time. Use Bit and see the difference it can make to your company’s operational efficiency and productivity!


7. Set Measurable Goals

When you set measurable goals and benchmarks for your business, it becomes easier for you to take notice if and when things go out of place.

Tracking your results and comparing them to your pre-set numerical or measurable goals will also help you track the overall progress of your business and help you find out which areas require improvement. Ultimately, this will act as an effective way of determining the operational efficiency of your company.

Read more: 13 Business Goals You Must Set In 2022


8. Improve Customer Service

Customers play a huge role in the success story of your company, so it is extremely crucial for you to know how your company is engaging with them. For this, you need to have a customer service management system in place to streamline all communications within the company.

This will not only make it user-friendly for your employees to assist your customers in a much more efficient and quick manner, but also promote vendor relationships and compliances and reduce any internal backlogs.

As a result of this, there will be an improvement in your customer service which will lead to an improvement in the operational efficiency of your company.


9. Leverage Technology

With the right technology, it becomes easier for your business to improve your company’s operational efficiency.

Using the latest and updated technology not only brings in automation, but also opens doors to better access to accurate and consistent information about finances, operations, and management.

Leveraging technology also means that your tasks will become automated, thus streamlining your work and saving time and effort.


10. Evaluate Functionality

When it comes to operational efficiency, merely leveraging technology isn’t enough. You also have to ensure that the advanced technology that you are using goes through reviewing and evaluations.

By regularly evaluating and reviewing your technology’s functionality, you can figure out whether it actually benefits your company or not. This will expose any additional expenses or problems being caused.


11. Improve Workplace Culture

Every company has a workplace culture and it has a huge impact on the company’s operational efficiency. So the best way to boost the operational efficiency of your business is to ensure that there exists a workplace culture that is healthy and positive.

You can improve the workplace culture by building team relationships, offering proper training, reducing unnecessary meetings, eliminating distractions, and encouraging and rewarding employees.

This will make lives easier for everyone involved and as a result, improve the overall productivity and efficiency of your company.



Improving the operational efficiency of your business is not a one-time thing. It calls for a set of actions and steps followed on a regular basis, constantly updated and evaluated.

So no, operational efficiency is not an overnight success because it takes its own time. But with the right steps, it’s not a distant dream.

In this blog, we have laid down for you the right steps and methods that can help you follow to move in the right direction to attain operational efficiency.

All we have to tell you is that you follow up on each step, embrace the changes that happen and adapt to them accordingly, and your business will be on the track to becoming a productive and efficient one!

Cheers to business!

Further reads: 

Top 7 OKR Software You Need To Use This Year!

Operational Plan: What is it & How to Create it? (Free Template Included)

Company Profile: What is it & How to Create it?

Business Presentation: How to Create One to Woo Clients!

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