Efficiency, Effectiveness and Productivity
In Administration, there are some terms that are used continuously; for their impact within every-day activities as well as for their application in an enterprise. These are the terms of efficiency, effectiveness and productivity, which mean:
- Effectiveness: consists in reaching the goals established by the enterprise.
- Efficiency: consists in reaching goals using the least amount of resources. Notice that the key point in this definition is saving or reducing resources to the minimum.
- Productivity: consists in the product-supply relationship in a specific time with an adequate quality control.
Productivity can be expressed in the following formula:
After observing the previous formula, we can deduct that productivity can be high when:
1. When supplies are reduced and the same number of products are kept.
2. When products are increased and the supplies used to produce them are reduced.
3. When products are increased using the same number of supplies.
Sergio Hernández y Rodríguez states that productivity can be measured in relation to the total amount of used supplies, or in other words, with one in particular. Generically, supplies are divided in materials, machinery and labor.
Sergio Hernández y Rodríguez gives us the following examples of productivity in each one of the mentioned supplies:
Material productivity.
If an expert taylor is able to cut 11 suits with a piece of cloth compared to another less experienced one who can only taylor 10 suits, we can say that, in the hands of a skilled taylor, the piece of cloth was used with a 10% increase in productivity.
Machinery productivity.
If a machine or tool produced 100 pieces per day of work, and it could increase its production to 120 pieces using the same period of time, using better cutting tools, the productivity of such machine would have increased in a 20%.
Labor productivity.
If a craftsman produced 30 plates every hour and after adopting perfected manufacturing methods he is able to produce 40, his productivity would have increased in a 33.33%.
