The definition of efficiency is the relationship that exists between the resources used in a project and the results obtained with it. It refers above all to obtaining the same objective with the use of the least possible number of resources or when more goals are reached with the same number of resources or less. Efficiency is very important in companies, since maximum performance is achieved with minimum cost.
Types of efficiency
There are several classes of efficiency, which can be cost, revenue, or profit:
- Cost efficiency: this is the ability of a target to obtain the lowest price or coste for as much production as possible.
- Efficiency by income: consists of obtaining the greatest possible amount of income by valuing the cost of the factors and the total price of the item to be marketed later.
- Profit efficiency: try to get the maximum profit, which means the maximum income at the minimum cost.
The concept of efficiency should not be confused with effectiveness, which are often used as synonyms. Efficiency is considered as the level of achievement of objectives, the ability to achieve what is proposed.
La difference between effectiveness and efficiency They reside in the fact that effectiveness is based on the best use of resources, while efficiency refers to the possibility of reaching a goal even if the best use of resources has not been made during the process.
It would be convenient to be efficient and effective at the same time (to achieve better results), although this is not always the case, since it tends to occur quite frequently that a organization be efficient without being effective and vice versa, effective but not efficient.
Despite the fact that this concept is closely associated with productivity, in recent years it has also expanded in the energy field. Energy efficiency, according to Ecotrendies, refers to reducing energy consumption in daily life to help the environment and save on costs. This energy saving is achieved through the good habits of people and the improvement of the efficiency of household appliances and homes or premises. In this way, it seeks to achieve the same results but using the same resources.
A factory that makes 500 articles in an hour with its machines can be more efficient if it manages to make 600 units in that same period of time or in 40 minutes they make 600 units.