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Vishwadeep Khatri

Efficient, Effective

Effective/Efficient

 

Effective - producing the expected output or serving the intended purpose. It is about 'doing the right things' and achieving goals/targets

Efficient - performing in the most optimal manner. It is about 'doing things right' i.e. doing it in the least time or in a least expensive way. It may be the wrong thing but it could have been done optimally.

 

 

An application oriented question on the topic along with responses can be seen below. The best answer was provided by Nilesh Bhanushali on 3rd January 2017. 

 

 

Question

Q 61. Efficient or Effective - (Flash Short Answer Question - Max 100 words answer, winner gets 1000 points - closes 9:00 PM IST on 3rd January 2018) -

 

Provide One Example of a process that is efficient but not effective and one of a process that can be considered effective but not efficient. Daily use or easy to relate examples are likely to win. 

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

 

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A Six Sigma trainer can be efficient; in terms of his punctuality, preparedness & organizing skills. An effective Six Sigma trainer can be the one who helps participants learn the application of tools and techniques by providing them with real-life and practical examples. The trainer can be efficient but; not effective and vice versa

 

A bus or cab driver can be an efficient or high-speed driver but; an effective driver is the one who ensures that the car itself and passenger too reaches the destination safely. The cab or bus driver can be effective but; not efficient and vice versa

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Process that is efficient but not effective -

1) When I read a book at very high speed, I finish it in straight 3 hours, but I may not understand its full concept; means I am efficient but not effective.

2) Making popcorn in cooker at home has very low cycle time (efficient) but defect rate is high (not effective)

 

Process that can be considered effective but not efficient - 

3) Process of transporting big size blades of wind-mill by road on trucks is effective (last mile delivery) but not efficient (consumes high resources & takes long time)

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Voice of the customer is effectiveness. This is a metric that shows how well we met the customers requirement. Eg. Quality.

 

Voice of the business is effeciency. This metric shows if customer satisfaction was achieved profitably. Eg. Average Handling time.

 

In my current company some trainings went digital in 2017, which is efficient ie no trainer or training rooms are required, but NPS and CSAT dropped considerably as compared to 2016. Training became efficient but less effective.

 

My previous medical transcription company had 2 layers of processing -Transcription and Editing. Due to quality issues we added another layer called Superediting which improved quality ie it was effective to satisfy customer, but added cost to the business. We became more effective but less efficient.

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"Efficiency" measures the use of inputs for realizing maximum output, a waste process can also be performed efficiently. But nothing is more inefficient than doing efficiently, that which should not be done at all. Effectiveness also brings into focus, the purpose or objective of the process, ensuring that it should be fruitful in the larger scheme of things. The best example of a process that could be efficient without being effective is the “Corrections” or “Repair” processes. The process may be efficiently using resources, but will be effective only if the intelligence it generates leads to its own redundancy.

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Effective means doing the right thing and efficient means doing the things right.

Example : Average of field visit count of two agents of an insurance company are coming 6 visit per day. Target is also 5 to 6 visit per day. Then both the agents will be considered as effective. But the average of conversion of each visit to sales of the 1st agent is 3 clients per day and for the 2nd agent is 1 client per day. Then 1st agent will be considered as efficient 

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Efficient(doing things right) and Effective(doing right things) are two interchangeably used words in general parlance yet different in 'work' approach. Both are essential as explained through examples:

Blackberry inspite of being most efficient in their approach failed because they could not encompass strategies according to changing market ...lack of vision rendered them ineffective.

Scheme of JanDhan accounts was to provide easy access of financial services to all and was effective in opening 1.5 crore accounts. But for inefficient implementation, it took very long for accounts to become operational and some lost interest.

 

 

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Effectiveness relates to how good the outcome of the process is. Efficiency relates to how much resources the process consumes. An example from the software industry is the Review process. Effective review means one which finds most defects and leaks very few. The work product which is the outcome of the review will be of high quality i.e. it will have very few defects. Efficient review means using minimum review time to find maximum defects. It doesn't deal with how many defects will be left in the work product. Thus effective review needn't be efficient and vice versa.

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Doing the right thing is effectiveness whereas doing things rightly is efficiency. Effectiveness comes first, to be followed by efficiency. 

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One person rights 1000 lines of code in 4 hours. He is very efficient. But his code has many defects and it takes another 4 hours to correct it.

Person B writes 1000 lines in 4 hours and that is defect free. Person B is effective.

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If we meet our objective without really bothering about the amount of resources that we have put in then we can say that we have been effective.

 

If we meet our objective while optimally utilising our resources then we will be said to be Efficient and Effective.

 

For example, I am cutting an apple into six pieces of equal size. I can use a knife and cut into six pieces approximately of equal size. I have been effective but not efficient. If I take an apple cutter and cut the apple in one shot, then I am efficient and effective

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Lets say A & B are two representative who are selling credit cards. Their manager asked them to call minimum 100 people to promote & sell their companies card. 

  

                         A/sell           B/Sell

Day 1               100/5          100/50  

Day 2               80/40          100/5  

 

So, in day 1, both A & B are effective[because both reached daily target of 100 calls] but B was more efficient.

on the other hand, on day 2, B was effective but not efficient, and A was not effective[as failed to reach target of 100 calls] but efficient than A.

 

In case of a product manager, P1 & P2 both completed their project within given timeline so both are effective but P2 used extra cost to achieve it, so P1 is much more efficient than P2. Hope it clears the idea 

 

 

So, effectiveness depends upon reaching the target but efficient depends upon effectiveness & output.

 

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1. Efficient but not effective:

Online shopping is efficient and easy, unfortunately the products that is displayed are usually not the same that we eventually receive it on purchase.

 

2. Process that can be considered effective but not efficient

Aadhar card is an effective process but not efficient due to loopholes and data & Privacy breach.  

 

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The Delhi Govt's Odd-Even motor vehicle usage scheme was considered efficient but not fully effective in terms of compliance.
 

China's policy of number plates ending with specific digits on roads on specific days is effective but not efficient considering China's transportation needs. 

 

 

 

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Doing the correct work is effective 

doing the work in right manner to achieve desired output is efficiency  

 

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Effective is doing the correct thing to produce the desired result whereas Efficient is doing the thing in a most productive manner. Effectiveness is a measure of getting the result correctly in a certain number of events whereas Efficiency is a percentage figure which is measured as the ratio of work/power/time utilized in producing an output to that of the total work/power/time taken

Example of Highly Effective but not efficient process

A sales person distributing a sample of any product (say chocolates) to the customers with a stall in any super/hyper market is a very effective but highly inefficient way as the customer comes to know about the product by consuming/using it but very less customers would be actually buying it. Similar example would be transmission of electricity in high voltage lines where the effectiveness is very high as fewer lines are used but the efficiency of power transmitted to the end transformer would be much lower than that produced at the power station.

Example of Highly Efficient but not Effective process

Online teaching or teaching to masses is a highly efficient process where several 100’s or even 1000’s of students can be trained at the same time but the effectiveness is very less as the instructor/professor cannot put in adequate time to each trainee to make sure that the trainee has absorbed the concept well.

 

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2 hours ago, Vishwadeep Khatri said:

Q 61. Efficient or Effective - (Flash Short Answer Question - Max 100 words answer, winner gets 1000 points - closes 9:00 PM IST on 3rd January 2018) -

 

Provide One Example of a process that is efficient but not effective and one of a process that can be considered effective but not efficient. Daily use or easy to relate examples are likely to win. 

 

This Short Answer Question is a part of Excellence Ambassador initiative and is open for 4 hours. All rewards are mentioned here - https://www.benchmarksixsigma.com/forum/excellence-ambassador-rewards/

Alex

A process, product, or service should be both, efficient as well as effective.

 

Aiming only for effectiveness may mean doing the right thing but doesn't consider cost.  E.g, a shoe manufacturer gold plating his product in order to please customer but this comes at exorbitant cost that the customer may not be willing to pay for.

 

Whereas, aiming only for efficiency may have too much if emphasis on controlling cost resulting in impact on quality of product or service.  E.g., shoe manufacturer cutting cost by using low grade raw materials.

 

So, it is important to strike a balance between Effectiveness and Efficiency for meaningful product / service.

 

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Effectiveness means the ability to produce a desired result that is; getting things done right regardless of time and cost; whereas efficiency means doing the things right in a best possible or optimised way.

 

Example 1: 

If illumination intensity 600 lux is the requirements in a study room , you have several option to get the desired results, one may use CFL or LED light. In this case CFL is effective but not efficient as it consumes more energy for same light intensity compared to energy efficient LEAD lights.

 

Example 2:

In a beverage manufacturing unit ,day production target is to produce 10000 cases and if you use process A ,it produces 13000 with 5% deviations where as Process B produces 9000 with zero deviations. In this case Process B is efficient as it is cost effective due to zero waste  but not effective as it is not meeting the required results.

 

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Efficient : It means doing something of quality with minimum wasted effort or expense, and in the process achieving the best possible outcome.

 

Effective:  Having the intended or needed result successfully. 

 

Example for case 1: Efficient process but not an effective one:

In an IT support project, whenever a bug/defect needs to be tested, the ideal way is to provide the fix(Code) , test it in local environment and then deploy to production environment (Efficient way). For lower severity defects, this may work. But because the downtime for severity 1 defects would be very less,  developers/support analysts would not have time luxury to do this and hence this efficient process may not be of help to them, as the critical feature/functionality needs to be restored quickly. Hence even if this is an efficient process, for Severity 1 & 2, this process may not be effective as doing this way may take some time which may be cross the SLA for severity 1 & 2 to be missed. Therefore this may not become an effective process.

 

Though as a workaround , the organisation can make use of Experienced or SMEs (of the applications) to address these Severity 1 and Severity 2 bugs/defects who would bring their expertise to offset this problem by providing the fix and then deploy it directly in the production environment.

 

Example for case 2: Effective process but not an efficient one:

Consider an IT support (maintenance) project.  Two constant values need to be included in the software code for doing a processing (Calculation), by the support analyst.  Now the analyst 'hard' codes these values into certain set of files (where this is needed). Hard coding (can be called as Magic Number in this context) means that numeric values are inserted into the code instead of using through a  variable which can  be declared as a CONSTANT,  which is the efficient way. In case, due to business logic, the constant values get changed , then all the hard coded values need to get changed in each file and manual updates need to happen. So there is a chance that manual error or missing of the hard coded value in a particular file might happen. Declaring the constant value through a CONSTANT variable might avoid these errors, which is the most efficient way.

Therefore while we can achieve what we want with the hard coded values (to satisfy the business needs) which can fetch the right results(effectiveness), it is not the efficient way of doing that processing as aforementioned.

 

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Efficiency is defined as how efficiently the inputs are converted to the output, whereas Effectiveness is defined as the usefulness of the output. Efficient means doing things right and Effective means doing the right thing.

Nokia an efficient company, couldn’t succeed as they were not able to shift to smart phone technology fast enough, they were efficient but not effective.

Achieving the target of “X” nos. of calls/ day by the reps from +91-140…. is not going to attain the results unless I happen to reach on a deal with them.

For a successful organisation, the process needs to be Efficient and Effective.

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Efficiency is defined as how efficiently the inputs are converted to the output, whereas Effectiveness is defined as the usefulness of the output. Efficient means doing things right and Effective means doing the right thing.

Nokia an efficient company, couldn’t succeed as they were not able to shift to smart phone technology fast enough, they were efficient but not effective.

Achieving the target of “X” nos. of calls/ day by the reps from +91-140…. is not going to attain the results unless I happen to reach on a deal with them.

The process needs to be Efficient and Effective.

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Let me first jot down the definition as I understand:

An Effective Process is the process is the process which has a good objective and desired end, however the methodology or flow does not provide the best results due to multiple reasons like in a appropriate usage of resources or available knowledge.... The ROI or throughput is always below the expectation of the Main stakeholder (investor) or top management. 

Whereas The Efficient Process is where the methodology used or the functioning used is the best as there is least waste of time and effort as resources are used optimally and the results or throughput and ROI from the process is lucrative....

The difference between Effective process & Efficient Process can be simply put in as being Effective is is about doing the right things whereas being Efficient is about doing things right. A good process needs to be both. 

One example that comes immediately to mind is a sweet maker who makes wonderful authentic Bengali sweets with high quality raw material with highly paid specialists who carry tribal knowledge. He lacks the knowledge of food storage and depends on the rudimentary  skills of the 'specialists' to preserve sweets till sold. This causes lot of post production  inventory when customers do not turn up at his retail store.... Lot of wastages, low inventory turn etc are obvious pain points... Here the owner is definitely running an effective business process.... Given that the product he is putting forth to the market is a novelty.....

 

However the same business process also becomes efficient when he ensures that there is a documentation of the recipes and standard check points and there are enough trained people to reduce dependency on 'specialists'..and are willing to work at lesser pay(best if they work on a per unit production model)  He also brings in technology with equipments that help to preserve the food longer with intact quality standards. He then also goes on to use available technology to go 'online' and hires last mile logistic partners who are willing to ferry across orders on a per unit arbitrage model... What he has done here is that he has converted most of his cost into variable cost and reduced his fixed costs.... Also he has reduced his wastages and improved his inventory turn as he manages demands that he has from online online... This way he is able to improve his inventory turn also by following trends of demand and sale. He has launched his brand big time into the market... He has reduced his marketing costs by associating with the food aggregators like Zomato & swiggy who work on variable cost model... Thus he has continuously improved the business process to ensure he gets better ROI and cash flow. Once he is confident that he can replicate his business process, he may want to sell off his retail space and focus on more smaller units with lesser rents where he can produce his products and go complete online..... 

The business process will be both effective and efficient now. 

 

 

 

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Efficient means Doing Work in Right Fashion , to save on resources (Time, material, people etc.) expended.

 

Effective means Doing the Right Work to achieve a purpose with the utilization of resources .

 

Example of a Process highlighted is “Travel time during Commuting Process". 

 

To travel 20 kms during Peak hours from South to North Bangalore, the Effective Process would be to travel by a two-wheeler. It definitely achieves the purpose of Reducing Travel Time for a single person, but is not efficient, since many 2 wheelers cause congestion and increase pollution.

To travel same distance, the Efficient Process would be to travel by BMTC bus, since it reduces congestion, but it is not effective in terms of reducing Travel time.

To same distance, the Effective and Efficient Process would be to travel by Metro with point to point auto connectivity. It reduces travel time, and also is efficient in reducing congestion.

 

Another example is “Increasing number of people in a Team to get the Project completed within deadline” may be an Effective process, but not Efficient. 

 

For Any repeated process steps, we drive it to be Efficient. For any new process, we should aim it to be Effective in achieving its purpose.

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Effectiveness is an indicator as to how the process is successful in delivering the output as per requirements. Efficiency is an indicator as to the extent of output delivered with least resource consumption. i.e. higher input to output ratio.

 

Ideally it is not relevant to consider the efficiency of a process that is not effective. If a process is very efficient for what ever output it delivers, but not effective, it simply means that the process is ' efficiently' delivering a wrong output. However, we may conditionally apply this thought process; for e.g. a process could have a very high process capability, with very low variation, but due to a mean shift it is not delivering the required output, and hence not effective. 

 

For eg. in my recent experience in a fuel station, they had an equipment that is capable of checking and correcting the air pressure of all my four wheels, as against walking around and checking each wheel one by one.  I felt that this is an efficient process, and saves time and effort. However, after the process I did not have comfortable drive. Upon checking the individual pressure of each wheel, I found the variation is high. Thus, though the process was attempted to be made more efficient, the effectiveness has been compromised.

 

It is quite possible to have a process that is effective, but need not be efficient.

 

Imagine a continuously running escalator, as against an elevator that can carry only 4 persons. The escalator represents a more effective process since it is always available to go up. However,  since it is continuously running irrespective of any passenger, it may not be an efficient process.

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17 hours ago, Vishwadeep Khatri said:

Q 61. Efficient or Effective - (Flash Short Answer Question - Max 100 words answer, winner gets 1000 points - closes 9:00 PM IST on 3rd January 2018) -

 

Provide One Example of a process that is efficient but not effective and one of a process that can be considered effective but not efficient. Daily use or easy to relate examples are likely to win. 

 

This Short Answer Question is a part of Excellence Ambassador initiative and is open for 4 hours. All rewards are mentioned here - https://www.benchmarksixsigma.com/forum/excellence-ambassador-rewards/

Efficient is about using less resources to deliver the output. Effective is about delivering the meaningful and required output. A small example can be of a bulb that uses more energy, provides required lighting but is able to convert 2% in light energy while 98% in heat energy. So it's effective but not efficient. 

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