OverallThe overall efficiency of a process is the value of outputs divided by the value of inputs. For example, a production line that takes inputs of $1 million a day and produces outputs value of $1.2 million:efficiency = (1.2 / 1) × 100 = 120%An overall efficiency of over 100% indicates a process that adds value. Throughput is the output of a process or machine for a unit of time.throughput = output / hoursFor example, a production line that outputs 30,000 units in 12 hours.throughput = 30,000 / 12 = 2500 units / hourThis can be used to measure bottlenecks. As a simple example, if you have 12 steps in a sequential process, the one with the lowest throughput is a bottleneck. Labor productivity is output for an hour worked.productivity = output / hours workedFor example if you produce 1.2 million dollars in value on a 12 hour shift with 12 workers:productivity = $1,200,000 / (12 x 12) = $8333/hour
Resource EfficiencyEfficiency can also be measured for any resources consumed by a process such as materials, energy and water. resource efficiency = output / resource inputFor example, if it requires 90 kWh of electricity to produce 30,000 units:energy efficiency = 30,000 / 90 = 333.3 units / kWhEfficiency can be measured for any process input in order to optimize costs or reduce environmental impact.
|Overview: Process Efficiency|
The output of a business process for a unit of input.