The document discusses the differences between efficiency and effectiveness. Efficiency refers to doing things right and focuses on process and output to input ratio. Effectiveness refers to doing the right thing and focuses on meeting desired outcomes. The document uses the example of cellular manufacturing in a nut production industry to demonstrate how efficiency leads to effective results. Elements like material handling, inventory, quality, people, and customer benefits are discussed in terms of how efficient processes result in more effective outcomes. The conclusion states that efficiency is a productivity metric while effectiveness is a quality metric.

1. ASSIGNMENT NO. 1
TITLE: EFFICIENCY VS. EFFECTIVENESS
NAME: PURVA VERMA
Batch: 2013
SUBMITTED TO: Dr. Rao

2. cbsolution.net
We can see from this diagram that utilisation of resources through an efficient process
produces the desired output to signify its effectiveness.
EFFICIENCY EFFECTIVENESS
Doing things right Doing the right thing
Process focused End focused
Restricted to the present needs Involves thinking long term
Output to input ratio and focuses on getting Constantly measures if the actual output
the maximum output with minimum meets the desired output.
resources
For example, the HR process of a company may be efficient i.e. the HR department is able to
hire employees quickly, decrease cycle time for approvals etc. But it may be ineffective
because in the hurry to hire people quickly, they often miss out on the perfect person for that
job. Efficiency says”Hire now” while effectiveness says” Hire the right person”.
We can distinguish between efficiency and effectiveness further with the help of the
following industrial example:
INDUSTY: Manufacturing
CONCEPT: Cellular manufacturing

3. Cellular manufacturing is a manufacturing process that produces families of parts within a
single line or cell of machines operated by machinists who work only within the line or cell.
A cell is a small scale, clearly-defined production unit within a larger factory. This unit has
complete responsibility for producing a family of like parts or a product. All necessary
machines and manpower are contained within this cell, thus giving it a degree of operational
autonomy.
A nut is a type of hardware fastener with a threaded hole. Nuts are almost always used
opposite a mating bolt to fasten a stack of parts together. These are used as an integral part of
almost all the light and heavy machineries we see. Cellular manufacturing is the technique
which has made the production process of these units highly efficient and effective.
We can see how each element of cellular manufacturing is highly efficient and leads to
desired effective results. It demonstrates the cause and effect relationship between efficiency
and effectiveness.
MATERIAL HANDLING
ELEMENT EFFICIENCY EFFECTIVENESS
Inter department moves Few 50%-90% improvement
Routings Simple Automation possible
Route structure Fixed Simplified
INVENTORY BENEFITS
ELEMENT EFFICIENCY EFFECTIVENESS
Lot sizes Small 50%-100% improvement
Stocking policy Made to order Saves space
Throughput time Weeks Hours
QUALITY BENEFITS
ELEMENT EFFICIENCY EFFEVTIVENESS
Responsibility Focused in cell 70%-90% improvement
Approach Self-enforced Happier teams
Motivation Pride Peak performance
Problem solving Team based Shared responsibility and
permanent solutions
PEOPLE BENEFITS
ELEMENT EFFICIENCY EFFECTIVENESS
Communication Quick and positive Quality and coordination
Teamwork Enhanced Effective teams
Motivation Strong and positive Self-motivated employees

4. Supervision Easy and localised Fewer supervisors
CUSTOMER BENEFITS
ELEMENT EFFICIENCY EFFECTIVENESS
Delivery Speed Fast 70%-90% improvement
Delivery reliability Consistent and high Upto 90% improvement
Quality Consistent and high Trust and integrity
CONCLUSION:
Efficiency is productivity metric and effectiveness is quality metric. Being efficient means to
spend less time on something, spend less money on something or spend less effort (or number
of workers) on something. Being effective means to do the job well. In other words, the
output (finished product) is of high quality.