[Rookie's Friends] Why & How to Improve Process Efficiency in Your Business
Process efficiency can make or break your business.
Want proof? Just look at Ford and McDonald’s. When Henry Ford reduced the amount of time it took to assemble vehicles by more than 75%, he revolutionized the auto industry and ensured the success of Ford Motor Company. McDonald’s later became a global leader in fast food by perfecting the efficiency of their meal assembly design and passing the cost savings on to customers.
On the other side of the same token, inefficient processes cost NASA more than $193 million when they lost the Mars Climate Orbiter in 1999. NASA’s post-mission failure report explained that “the root cause [a conversion discrepancy between metric and standard calculations] was not caught by the processes in place.”
From large systems to small calculations, your business could be losing big to process inefficiency – and fixing it could make you a huge success.
What Is Process Efficiency?
Process efficiency is the ratio of output resulting from a process compared to the time and resources required to carry out that process. More efficient processes use fewer resources. For example, if it takes 10 employees two hours to make one pizza, the process for making pizzas is extremely inefficient.
How to Identify and Solve for General Process Inefficiencies
Whether you’re delivering pizzas, manufacturing medical devices, or maintaining Jacuzzis, you can assess the efficiency of your business process by asking yourself a few simple questions. These questions will help you find inefficiencies and figure out how to correct them.
Is there technology that can make this process faster?
Many of our OptimoRoute customers have come to us after asking themselves this very question. Manually planning routes takes an average of eight times longer than planning routes with OptimoRoute. Our software has enabled logistics professionals and managers to increase efficiency and focus more time on strategic planning.
New apps, software, and mechanical systems that can help businesses get jobs done faster and more efficiently are popping up all the time. You don’t necessarily have to adopt new technology, though. Sometimes, you can increase efficiency by simply utilizing more of the features within the technology you already use. For example, many small business owners waste time re-creating similar emails, forms, and reports. Creating a template for documents that have repetitive components can save a lot of time.
Is this process using a lot of resources?
If a process is using a large volume of resources (work hours, tools, supplies), you should assess every part of that process for areas where it could be improved. Is a task taking you 30 minutes, but you could do it in 10 if you weren’t constantly being interrupted? Sometimes improving efficiency is as simple as silencing notifications on internal communications for 10 minutes.
This question can help you find solutions to more complex processes that are using multiple types of resources, too. Let’s look at our client, Hardie’s Fresh Foods, as an example. Hardie’s is a food distribution company in Texas with a fleet of 160 refrigerated trucks. Their delivery process was vital for their business but was using a lot of resources (gas, trucks, drivers, etc.).
Hardie’s Fresh Foods improved their delivery process efficiency by using route optimization software. Planning routes and scheduling with OptimoRoute reduced their mileage by 20%, driver costs by 12%, and increased their delivery capacity by 14%. That’s a huge improvement in their delivery process efficiency. Hardie’s improved their customer satisfaction, too. Their on-time delivery rate is currently at 94% and has been rising at a rate of 1.5% MoM since they started using OptimoRoute.
Is any part of this process outdated?
As technology and customer behaviors evolve, your business can fall behind if you don’t regularly assess process efficiency. This doesn’t just mean ensuring your current processes are operating at maximum efficiency. It also means staying up to date with current market trends and customer expectations.
Something you did well 10 years ago may be too slow or too inefficient to do now, or it may not provide a great customer experience anymore. Just look at Blockbuster Video. Blockbuster’s failure to adapt to a changing market led to their untimely demise in 2010 when they were toppled by Netflix’s new streaming and DVD mailing services. Keeping an eye on market trends, conducting customer surveys, and understanding your clients’ needs will help you keep your processes up to date.
Is there a better way?
This is the root question every business needs to ask if they want to make sure their processes are efficient. Striving for continuous improvement will set you up for long-term success.
Ask this question about every single process and ask it often. If the answer is yes, find a better way and implement it. Fast. Finding a better way can be as small as helping one manager do their job faster with software or as large as completely overhauling an assembly line to incorporate new technology.
4 Services That Help Improve Process Efficiency
Luckily, there are lots of products and services designed specifically to help businesses operate more efficiently. Here are a few services designed to improve efficiency and give businesses a competitive advantage:
1. OptimoRoute: Route planning and scheduling
What is it? OptimoRoute is route optimization software.
Who is it meant for? Businesses of all sizes that need to manage workers in the field. This includes pickup and delivery services, maintenance or service companies, and long-haul trucking companies.
What are the benefits? OptimoRoute makes the entire process of scheduling and route planning eight times faster and requires 60% fewer working hours, so managers can focus on strategy.
With OptimoRoute, you can:
Calculate routes for multiple drivers and hundreds of orders with multiple constraints in seconds
Plan routes up to five weeks at a time
Quickly adjust schedules and routes if orders change or a driver calls in sick
See where drivers and workers are along their route with live tracking
Keep your customers up-to-speed and make sure they’re available at the right time with real-time order tracking and ETA notifications
2. Teampay: Managing team spend
Who is it meant for? Businesses of all sizes with multiple team members who need to pay for things like gas, supplies, or professional development with company funds.
What are the benefits? Teampay enables employees to buy the things they need to do their job without having to wait around for supervisor approval or to get reimbursed. It also saves leadership and project management personnel time by reducing the number of small tasks they need to do during budgeting.
With Teampay, you can:
Automate parts of the spending approval process
Complete essential business purchases within your usual workflow
Set and customize spending limitations
Automatically upload purchase data to the general ledger
Know exactly why purchases were made and avoid having to track down employees to ask for details
3. Eduflow: Training and onboarding
What is it? Eduflow is a platform for creating customized learning, training, and onboarding courses.
Who is it meant for? HR and onboarding teams as well as businesses that need to train employees on internal processes.
What are the benefits? Eduflow streamlines training and educational processes. It is also a valuable onboarding tool. A 2007 study conducted by The Wynhurst Group found that “new employees who went through a structured onboarding program were 58% more likely to be with the organization after three years.”
With Eduflow, you can:
Create onboarding checklists
Simplify the learning process for new hires and save managers/onboarding teams time
Increase your new hire retention rate
4. Adpresso: Digital advertising
What is it? AdEspresso is digital advertising management software.
Who is it meant for? Businesses and professionals who need to create, manage, and/or track their ads across digital platforms, such as Facebook, Google, and email campaigns.
What are the benefits? AdEspresso allows you to easily manage digital marketing across multiple platforms from one central place.
With AdEspresso, you can:
Clearly see which ads and platforms are performing better (or worse)
Save time switching from platform to platform
Drive more profitable marketing campaigns for your business
Create ads for Facebook, Instagram, and Google Ads, and split test (test multiple versions of an ad) across platforms
Harness the Power of Process Efficiency
Making just one process more efficient can positively impact your bottom line and give your business more freedom. Just consider the success of Ashley Furniture. The furniture giant uses 3D printers to manufacture smaller parts and prototypes in-house. Integrating cutting-edge technology on their production floor has saved them time, money, and given them more freedom to test out new prototypes.
So, ask yourself: Where can my business increase process efficiency? The answer to that one question could yield incredible results.