Productivity
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Productivity Metrics

Efficiency

# 4 Types of Process Efficiency

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Process efficiency is the output of a business process for a unit of input. Processes are repeatable aspects of a business that can be standardized and optimized to improve efficiency. The following are common types of process efficiency.

## Overall Efficiency

The 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.

## Process Throughput

Throughput is the output of a process or machine for a unit of time.
throughput = output / hours
For example, a production line that outputs 30,000 units in 12 hours.
throughput = 30,000 / 12 = 2500 units / hour
This 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

Labor productivity is output for an hour worked.
productivity = output / hours worked
For 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 Efficiency

Efficiency can also be measured for any resources consumed by a process such as materials, energy and water.
resource efficiency = output / resource input
For example, if it requires 90 kWh of electricity to produce 30,000 units:
energy efficiency = 30,000 / 90 = 333.3 units / kWh
Efficiency can be measured for any process input in order to optimize costs or reduce environmental impact.

### Summary

Process efficiency is the cost of the value produced by a process. Improving process efficiency can involve automation, investment in tools, training and optimization of process steps.
 Overview: Process Efficiency Type Definition The output of a business process for a unit of input. Related Concepts
Next: Process Improvement
Bottleneck
Debottlenecking
Division Of Labor
Economic Efficiency
Efficiency Formula
Efficiency Goals
Inefficiency
Machine Efficiency
Management Efficiency
More With Less
Operational Efficiency
Overpackaging
Process Efficiency
Resource Efficiency
Specialization Of Labor
Technical Efficiency
Throughput
Time Efficiency
Value Creation
More ...

## Efficiency

A list of efficiency measurements.

The common types of business benchmark.

## Red Tape

A definition of red tape with examples.

## Work Efficiency

The definition of work efficiency with examples.

## Efficiency Definition

An overview of efficiency with examples.

## Management Efficiency

The definition of management efficiency with examples.

## Economic Efficiency

The common types of economic efficiency.

## Agency Cost

The definition of agency cost with examples.

## Productivity

The basics of productivity.

## Flow

An overview of flow.

## Efficiency vs Productivity

The difference between efficiency and productivity.

## Knowledge Work

A definition of knowledge work with examples.

## Bottleneck

An overview of bottleneck with examples.

## Productivity Formula

How to calculate productivity with 3 examples.

## Productivity Improvement

The definition of productivity improvement with examples.

## Productivity Rate

The formula for productivity rate with calculation examples.

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## Work Ethic

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