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- What is Business Efficiency?
To improve a business efficiency, it’s often useful to look at how efficiently it’s being run. Most businesses get used to moving at a certain speed and doing things a set way.
What is Business Efficiency?
When people within the company won’t deviate from the tried and true, this creates less efficiency over time as the world moves on and new and better solutions become available.
In this article, we share 5 ways to create a more efficient company by examining and often changing how it is operating day-to-day.
Adopt Practices from Lean Manufacturing
Lean manufacturing is a unique approach to doing business efficiency for companies that have production facilities either next to their offices or separate to them.
Traditionally, companies would produce products, market them and hope they sold well. They’d have to guess how much demand there would be and produce a large enough batch to not run out of supplies because creating a new batch of goods wasn’t something they could turnaround overnight.
With more Efficient Production Technologies
Robotics and computerized design, it’s now possible to run off small production batches and still get economies of scale. The concept of lean manufacturing was first developed in the automotive industry in response to car dealerships having stock of vehicles that weren’t selling and production not being responsive enough to customer demand for hot car models.
Using lean manufacturing, the supply chain is managed to only keep parts for a small time and to produce goods based on current orders. Doing so takes guesswork out of the equation with sales staff able to promote the most popular products and know they can be turned out quickly. To learn how to bring this to your company, having a staff member study for a lean manufacturing certification will begin to bring this modern approach in-house.
Run with Just Enough Staff (and Flexible Arrangements for More)
The need to keep too many people on permanently in a seasonal where product or services wax and wane with demand is hugely expensive. By taking the approach of being more flexible with staffing rather than believing that people sitting in chairs equals productivity, it’s possible to reduce the full-time workforce.
Another Way to be Efficient is with the Workforce
Instead, flexible contract durations, part-time workers and people happy to provide cover during busy periods for extra money all provide ways to reduce the payroll expense.
Even if your business efficiency is not a seasonal one, there are still steps to take such as multi-skilling staff to cover absences, maternity leave and other changes in staffing. Having one desk for two part-time workers who have shifts in the early morning or later office hours also reduces the office footprint too.
Manage Business Expenses Across the Board (Not Just in Manufacturing)
While managing the supply chain, production, equipment and staffing costs within a manufacturing plant and warehouse is certainly worth doing, that’s not the only area that a company can optimize efficiency in business.
Cutting the cost of supplies, including consumables that are needed by the company, is surprisingly easy. Rather than buying them at convenient places when stock runs short, an office manager can take this responsibility on to avoid this situation. Orders can then be centralized to one or two main suppliers that offer better prices or discounts for loyalty and quick payment of their outstanding invoices.
Information technology expenses is another area where some optimizing is in order. This is because different departments will often come up with their own solution if purchasing is not controlled centrally. This applies not only to the procurement of new laptops and desktop PCs but also software too in your efficiency in business.
Software, Subscriptions and Licenses
Software has changed from being a boxed package or license bought in packs for companies to something that’s predominately purchased online.
Switching to subscriptions and licenses for Office 365 instead of the traditional Microsoft Office suite is simpler to manage. Similarly, some solutions are now free, such as Google Sheets for spreadsheets to share with other work colleagues in real-time, and others use the Software-as-a-Service model.
Use Third Party Service Providers to Reduce Internal Complexities
Shifting from trying to do everything internally to using third party service providers has previously made some companies uncomfortable. Usually, this has been due to a lack of trust in the service level they will receive. However, this really is something that business owners and managers have to get over to your business efficiency.
Sometimes, it just doesn’t make sense to have a department for everything. For instance, is it sensible to try and replicate what a digital marketing agency provides to clients? They offer services like search engine optimization, social media management, design materials, brand management and more.
Benefits of Third Party Service Providers
Can your team possess the depth of knowledge of how Google has developed, how search has grown and how companies must change with it? Will the latest techniques be known to your internal team and if not, how can they get up to speed and stay current?
Depending on the field, it often isn’t sensible to have departments that provide specialized services internally. Sometimes, going outside the company secures higher service levels in many ways and get lease their property, a point that’s often lost with business owners who won’t relinquish control in any area of efficiency in business.
Giving the Employees More Time Off or Break Times
Pushing staff too hard usually has a deleterious effect on efficiency. It may work in the short-term, but soon enough, everyone is just exhausted. Mistakes will then creep in, leading to further problems.
A better approach is to give the employees more time to rest and recuperate rather than running them ragged. This can include vacation time or more frequent breaks without interruptions for matters that could have waited.
Benefits of Giving More Times
This way, staff can put in a full effort in when they’re working and have a better life balance overall. Efficient performance within a team is not possible if everyone is burning out. This is useful to remember in global accounting software.
More business efficiency run companies are better positioned to take advantage of a changing market and new opportunities that are spotted. When running leaner and at a lower operating cost, the business can get the jump on competitors delivering improved results which subsequently fall to the bottom-line.