What is the key difference between Effectiveness and Efficiency Indicator?
We all have the ability. The difference is how we use it: Stevie Wonder
In society, both young and old generation have their distinct role and purpose. The younger generation brings new ideas, energy, and innovation while the older generation brings maturity, foresightedness, and compassion. Can a society sustain without anyone of them?
Both Effectiveness and Efficiency indicators have their distinct meaning and purpose. Both are equally important for the organization for their sustained success and fulfilling customer requirements. By understanding the key difference, it can be effectively implemented throughout the organization.
Definitions: ISO 9000: 2015
Efficiency (Cl 3.7.10): Relationship between the results achieved and the resources used.
Effectiveness (Cl 3.7.11): Extent to which planned activities are realized and planned results are achieved.
As per ISO 9001: 2015 and IATF 16949: 2016, both Effectiveness and Efficiency have their specific meaning and intent.
Example of Effectiveness
- Number of pieces planned and produced
- Number of pieces rejected vs target
- Number of training conducted vs its plan
Example of Efficiency
The key difference between Effectiveness and Efficiency:
|1||Related to Customer||Related to Organization|
|2||Focus on the Result||Focus on the Process|
|3||Being effective is about doing the right things||Being efficient is about doing things right|
|4||Focus is on Means and Ends||Focus is on Inputs and Outputs|
|5||Related to time||Derive maximum output (ROI- Return on Investment)|
|6||The extent to which something is successful in providing the desired result.||State of attaining the maximum productivity, with least effort spent|
Who is more important for the organization?
- Both have their unique purpose
- The organization needs both effectiveness and efficiency indicator
- Achievement of the target is important and effective utilization of the resources is also important
- How often we read the definitions written in ISO 9000: 2015 & IATF 16949: 2016 and try to interpret it?
- How often the organization is clear about the effectiveness and efficiency indicators?
ISO 9001: 2015
IATF 16949: 2016
ISO 9002: 2015
ISO 9000: 2015
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