Company leaders well understand the importance of business efficiency: The fewest resources needed to produce the highest-quality output — be it a product, service or business process — the lower the cost, the higher the potential profitability and the greater the ability to invest in future growth initiatives. Technological advancements are the catalyst for many of the ways businesses are able to realise new efficiencies. Read on for seven innovative examples of how they’re doing exactly that.
What Is Business Efficiency?
Business efficiency refers to a company’s ability to maximise results based on available resources. What efficiency looks like from one company to the next depends on their size, industry and specific objectives. But the main goals are essentially the same: to reduce costs — and increase profitability — by speeding up a core activity, eliminating mistakes associated with that activity and removing redundancies. If that sounds like the definition of automation, you’re on the right track. Additional benefits of business efficiency include higher levels of satisfaction among employees, customers, business partners and shareholders.
Key Takeaways
- Business efficiency demonstrates how well a company is using its resources for maximum output.
- Customer self-service options have created efficiency in such industries as restaurants and grocery stores.
- Some leading-edge efficiency ideas, including the use of drones for consumer deliveries and factory inspections, are just getting started.
- Automated analytics and forecasting will be the bedrock of many companies’ future efficiency gains.
Business Efficiency Examples
Business efficiency improvements often result from changing who — or what — is responsible for a given activity. Some of the most visible changes in recent years don’t even involve reassigning tasks to others in the business — they involve customers handling tasks on their own. Still other gains come from combining the unique capabilities of machines with those of human beings. This powerful blend is evident in many of the following examples of business efficiency.
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Self-service kiosks in restaurants.
Studies show that many people view dining out as a convenience — a chance to have someone else handle one of their daily chores — and part of their expectation is quick service. This starts with ordering their food; the faster they can place an order, the faster they’ll be served. This explains the investment that some popular restaurant chains, especially fast-casual and quick-service restaurants, have made in self-ordering kiosks(opens in a new tab), which let customers view the menu, plug in their orders and pay for their meals. Direct orders through restaurant apps go even further, taking away the potential problem of customers having to wait in line at kiosks.
Even small restaurants are taking advantage of self-service kiosks, which are often cloud-based and available for a monthly fee.
Of course, quality of service is also about having the highest-performing employees in place at the restaurant’s busiest times. And it’s about having, and tracking, ticket-time standards(opens in a new tab) — the maximum length of time it should take to serve appetisers and entrees. Software can help restaurants gauge how they are performing against these measures and also help the restaurants get ideas on what else they might do differently to increase customer satisfaction.
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Self-checkout at grocery stores.
Long lines and not enough open registers are common complaints among grocery store shoppers, leading to poor in-store experiences and negatively impacting customer retention. To expedite the process, many supermarkets now offer self-service checkout in addition to their cashier-assisted registers. Self-service checkout options — such as customers scanning their own items at a register or using handheld scanners in store aisles — can help customers wrap up their trips more quickly. They also cut down on staff costs, since one associate can oversee multiple self-service stations at a time.
Another potential business efficiency at grocery stores could eliminate the need for cashiers altogether. This is the use of sensors and back-end technology to automatically bill customers for the items they removed from store shelves as they proceed to exit the store. To date, few grocery stores offer this shop-and-go experience — or what Amazon calls “Just Walk Out” technology, available at some Amazon Go stores. The use of sensors could also automatically alert store managers when it’s time to replenish a shelf item, like eggs or orange juice.
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Warehouse automation.
Manual warehouse processes, such as inventory putaway and order picking(opens in a new tab), are not only time-consuming (i.e., costly), but they increase the likelihood of mistakes, leading to longer order fulfilment times and, in turn, dissatisfied customers who can easily shop elsewhere. The risk of employees getting hurt on the job from physically moving, lifting and transporting boxes of products is real, too.
Enter the rapidly advancing field of warehouse robotics(opens in a new tab), which employs sensor technology and other innovations to automate(opens in a new tab) and speed many warehouse tasks. The robots used in automation range from the conveyor belts that have been in use in manufacturing for more than a century; to automated sortation systems, or voice-directed warehouse procedures involving mobile headsets; to automated guided vehicles that transport materials around a warehouse.
Warehouse automation typically involves a large capital outlay. The holy grail is the “lights-out warehouse,” where vehicles and machines effectively do all the work with little or no direct human involvement. These warehouses are called “lights out” because the various machines in them don’t rely on sight to do their work, and therefore the factory’s lights don’t need to be on (a big cost-saver).
Six innovations that foster business efficiency. -
Predictive analytics and forecasting.
Aided by increasingly sophisticated automated tools, smart companies have been mining the intelligence (opens in a new tab) living within their data to improve their operations, performance and forecasting abilities for many years now. The result? A boost in business efficiency and greater revenue. For instance, a company that uses artificial intelligence or machine learning to forecast when a customer is going to need to replace or service a product can shape the timing of its marketing approach(opens in a new tab). This could take the form of a retail electronics store emailing a coupon, for instance. The information can also be used internally to ensure that the company has the necessary inventory in stock to replace or repair the given product.
Automated analytics could also help companies make “next-best offers.” An example could be the suggestion to buy a pair of discounted sandals that pops up on the screen of a footwear shopper who’s buying a new pair of sneakers in April.
Employee analytics are also an important form of intelligence. In an era when good workers are hard to get and labour productivity is an issue, analytics can highlight employees whose number of “callouts” — missed workdays — signals they may be at risk of leaving. Managers can then take proactive steps to keep those employees on staff.
Customer-facing automation works best when paired with a strong analytics engine
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Factories monitored by drones.
This is a relatively new idea in manufacturing — an outgrowth of the trend of using Internet of Things (IoT) sensors and other devices to streamline and support plant activities. Drones that monitor plant equipment are part of the same category. An early example is a Ford car factory in the U.K. that uses drones to perform inspections on hard-to-reach infrastructure. The drones inspect the plant’s gantries, which are structures near the ceiling to which robotic arms are attached. This previously required several dozen people and the shutdown of the plant before it could take place. With the drones doing the work of taking video and pictures, the time needed for the inspection and its associated risk have declined dramatically.
Drones are also being used in factories to identify potential safety hazards, such as spillage; to monitor inventory levels; and to transport materials and parts around the factory.
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Robot/drone delivery services.
It has been almost a decade since Amazon founder Jeff Bezos appeared on the television show 60 Minutes and talked about drone deliveries. For many reasons — including the extent to which commercial flight is regulated, the danger that a malfunctioning drone could pose to people, and weather-related challenges, as cited by UPS CEO Carol Tome in early 2022 — the idea of drone delivery has remained largely aspirational.
But the concept hasn’t disappeared altogether. Amazon is still among its biggest boosters and is preparing to begin some drone deliveries in a small, aviation-friendly California town called Lockeford (home of Weldon B. Cooke, an early 1900s aviation pioneer). Uber has also piloted robotic food deliveries via autonomous wheeled carts that travel on sidewalks in residential Los Angeles neighborhoods. And Silicon Valley company Starlight Technologies has similar-looking robots that deliver takeout orders to students at some U.S. universities.
It’s easy to understand how these so-called last-mile delivery systems can improve business efficiency and lead to greater customer satisfaction.
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Car vending machines.
Sometimes, a new application of an old technology can introduce efficiencies and other advantages in the marketplace. For instance, national used-car dealer Carvana has rolled out 30-plus “vending machines” — eight-story-high towers that function a lot like snack vending machines — to deliver cars purchased on its website. A buyer simply heads to the nearest vending machine, inserts a “Carvana coin” received on-site, and the car is lowered to the ground. The company’s touchless buying experience served it particularly well at the height of the pandemic.
The self-serve model of buying has inspired other innovations that appeal to customers. For instance, some independent retailers now have stores equipped with vats of “green” cleaners, shampoos and moisturizers to which environmentally minded consumers can bring their own refillable bottles. For these consumers, the value proposition isn’t only the elimination of single-use plastic, it’s also the move toward a kind of consumption that is easier on greenhouse gas emissions, which are inevitable when a truck carries thousands of individually packaged bottles over hundreds of highway miles.
Determine Your Best Business Efficiencies With ERP
From back-end business processes to front-end office functions, there are many ways an enterprise resource planning (ERP) system — NetSuite’s cloud-based ERP, in particular — can improve business efficiency. NetSuite ERP integrates as many core applications as a business desires onto one platform that provides a holistic view of operations and uncovers areas that may benefit from greater efficiencies. The business management solution also automates a plethora of error-prone, inefficient manual processes involved in operations, inventory and warehouse management, to name a few areas, as well as generates real-time reports that can lead to greater resource control and more informed decision-making. The end result? More efficient business processes, better use of available resources, reduced costs and increased profitability.
Even a company with a unique and brilliant idea eventually moves into a more mature phase and has to focus on business efficiency. To be efficient in business is to continually find new ways to perform key tasks more quickly and with fewer mistakes. Efficiency allows executives to maximise results based on their available resources. Efficient companies are often favoured by employees and customers, and typically have strong competitive positions in their markets.
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Business Efficiency Examples FAQs
What are examples of efficiency?
One example of business efficiency is the use of self-service kiosks in fast-casual and quick-service restaurants. These kiosks let customers view the menu, plug in their orders and pay for their meals. Direct orders through restaurant apps go even further, taking away the potential problem of customers having to wait in line at kiosks. Another example is factories monitored by drones, which are used to inspect hard-to-reach infrastructure.
What is business efficiency?
Business efficiency refers to a company’s ability to maximise results based on available resources. What efficiency looks like from one company to the next depends on their size, industry and specific objectives. But the main goals are essentially the same: to reduce costs — and increase profitability — by speeding up a core activity, eliminating mistakes associated with that activity and removing redundancies.
What are 3 ways a business can increase efficiency?
Use of automation, robotics, and self-service kiosks and store registers are three ways a business can increase its efficiency. The fewest resources needed to produce the highest-quality output — be it a product, service or business process — the lower the cost, the higher the potential profitability and the greater the ability to invest in future growth initiatives.
