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Efficiency vs. Effectiveness

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efficiency vs effectiveness | VRI Lean Performance

Efficiency vs. Effectiveness

What is the difference between effectiveness and efficiency? Let’s begin with definitions from Merriam-Webster Dictionary

Effective (adj.) – 1 : producing a decided, decisive, or desired effect: an effective policy

Efficient (adj.) – 1: being or involving the immediate agent in producing an effect: the efficient action of heat in changing water to steam

2: productive of desired effects; especially : productive without waste an efficient worker

Efficiency and Effectiveness both have a prominent place in the Lean Six Sigma environment.

Efficient most often describes what is capable of producing desired results without wasting materials, time, or energy. While the word can be applied to both people and things, it is far more commonly applied to things, such as machines, systems, processes, and organizations. In order to meet our daily production quota, we commit a specific machine that uses up energy, make operators and maintenance personnel available, and provide raw materials. For example, if we are able to meet our daily production with less energy and fewer operators, we have operated more efficiently. It has a clear focus on reducing the expenditure or wastage or eliminating unnecessary costs to achieve the output with a stated number of inputs.

Being effective is about doing the right things, while being efficient is about doing things right.

Effective typically describes things—such as processes, policies and techniques. By comparing what a process or installation can produce with what they actually produce; therefore, effectiveness does not tell anything about the efficiency – the amount of resources that have to be committed to obtain that output. Effective highlights the relationship of the business organisation with the rest of the world to attain a competitive position in the market place.

Key Differences Between Efficiency and Effectiveness

The points, given below describe the substantial differences between efficiency and effectiveness:

By default Efficiency and Effectiveness have a unique relationship with PRODUCTIVITY. Productivity is determined by looking at the production obtained (effectiveness) versus the invested effort in order to achieve the result (efficiency); in other words, if we can achieve more with less effort, productivity increases.