Increase efficiency to maximise your profit
How to increase your business efficiency through lean thinking, technology use and better working practices.
Businesses that operate efficiently are more likely to grow, enter new markets or maximise their profits. Often, simple changes can help you increase your efficiency and reach your business potential.
This guide outlines some different ways to improve your business efficiency and reduce costs. It looks at the role of technology, innovation and working practices in helping you streamline your processes, minimise waste and boost productivity.
This guide also highlights some ways of saving money through resource efficiency. It gives you simple advice that will help you expand and take advantage of a growth opportunity.
Ways to improve your business efficiency
How do you improve efficiency in business to reduce costs and make the best possible use of your resources
To run a successful business, you need to be efficient and well organised. Inefficient operations can quickly affect your bottom-line.
How can a company improve efficiency?
There are simple ways of improving efficiency in a number of business areas, including:
- customer service
- distribution and delivery
- wastage costs
Your customers are the most important resource in your business. By listening to what people say about your company and products you can greatly improve the service you provide.
Increase customer awareness
Customer awareness of your business is vital in generating interest in your products. You can increase customer awareness through:
- marketing, including through social media - see more on social media for business
- making the most of your website - read about best practice in web design
- encouraging word of mouth from your loyal customers
Improve customer experience
The experience that customers have when they buy your products or interact with your staff will determine whether they return to buy more goods from you. You should:
- make sure their experience is easy and enjoyable
- ensure you have an efficient workflow so that waiting times are kept to a minimum
- communicate well with customers so that they are not put off coming back to you
- make it easy for customers to give feedback, either directly to you or through surveys, online forums, etc
Audit your processes
Map out a workflow to describe processes your employees should follow when selling your products. By looking at all the tasks they need to carry out, you can often spot opportunities to save time and avoid duplication of work. This may include redesigning the way your staff work with digital and physical content to ensure they use their time efficiently.
Build relationships with your suppliers
Talking to your suppliers can often provide valuable insight. Suppliers are working with the same products as you, and speak to your competitors as well. Learn how to negotiate - small extras can add up and often negotiating will result in better relationships in the long run. See how to manage your suppliers.
Using technology to improve efficiency
How to use technology to improve your business processes and increase efficiency
Technology can help you improve the way your staff carry out tasks. It can either speed up existing processes or allow new, more flexible ways of carrying out the job.
Assess your use of technology
In order to work out the best technology for your needs, you should assess your current systems against your requirements. Think about what inefficiencies may exist in your operations and how you can:
- capture relevant information, such as customer details, in the most simple, time-efficient way
- manage your documents to ensure that information is dealt with in a logical workflow
- avoid duplication - eg using handwritten timesheets that then need to be manually inputted onto a PC
- address technological obstacles - eg simplifying a complex helpdesk process to make it easier to resolve IT problems
There are nine fundamental technologies that drive the digital transformation of modern-day businesses. These are known under the umbrella of Industry 4.0.
Find out about Industry 4.0: What it means for your business and discover what different Industry 4.0 technologies can do for your business.
Find the best technology solution
The best solution for your business will depend greatly on your industry. Research what your competitors or other companies in your industry are using and consider consumer technologies that are widely available as these may be cheaper if you only have a small number of staff.
For example, you could consider:
- outsourcing IT systems or using off-the-shelf packages instead of customised business versions
- using VoIP (Voice over Internet Protocol) or internet calls to replace mobile calls - see advantages and disadvantages of VoIP
- creating a frequently asked questions (FAQs) section on your website to reduce unnecessary customer enquiries
- automating processes to save your staff time, including utilising computer telephony integration
- introducing cloud computing, mobile technology and computer networking to improve IT efficiency
When you find the right technology solution for your business, it is important to consider its security and take steps to manage cyber security risks.
How can technology improve productivity?
Different technological solutions can significantly boost the productivity of your workforce. They can:
- improve communication across the business
- increase connectivity of staff, including those working remotely
- enable collaboration between different teams or parts of the business
- enhance employee engagement and motivate staff
- help you track and analyse performance and progress towards goal completion
New and emerging technologies have a huge potential to transform your business.
Increase efficiency through innovation
What is efficiency innovation, and how innovation can impact your business performance, profitability and competitiveness
Innovation doesn't always involve developing new products or services. It often focuses on improving what already exists, for example your business' workflow, production or sales process. Such innovation can lead to great improvements in business performance and efficiency.
What is efficiency innovation?
Efficiency innovation often assumes the form of a process improvement or a more efficient business model. It enables businesses to:
- simplify and streamline their existing processes
- produce their existing products at a lower cost
- sell their products or services to their existing customers at lower prices
This type of innovation can have a major impact on a business. It can raise its productivity and competitiveness, optimise its resource allocation and increase bottom-line savings and profits.
Efficiency innovation examples
Many innovative solutions could help you increase efficiency in your business. For example:
- waste minimisation technologies and processes could help reduce costs
- business process improvements could help increase productivity
- standardisation in supply chain (eg through lean processes) could increase your competitiveness or add value to existing products or services
- finding cheaper materials to make existing products could boost your savings
Technology can play a key role in improving efficiency through innovation. See examples of digital innovation in business.
Improve efficiency through innovation
The inspiration for innovative ideas can come from both within your business and externally - from customers, suppliers, technological advances, etc. The key is to filter the ideas, so that you end up investing in those ideas which are most likely to deliver the best returns.
The following are some suggestions to help encourage an innovative atmosphere within your business:
- Share knowledge - Businesses are more innovative when staff know and understand what's happening in other areas. Someone may have an idea that could also benefit another department.
- Encourage ideas - Make sure people feel able to share their ideas without risk of them being criticised or ridiculed. You could also capture ideas using brainstorms, workshops and/or suggestion boxes.
- Involve everyone - Recognise that the winning idea could come from anywhere or anyone within your business. Encourage everyone to contribute their suggestions.
- Reward success - Offer incentives to staff for coming up with ideas that increase your bottom line.
- Accept risks - It's impossible to innovate without taking risks. If an idea fails, don't blame the person who made the original suggestion or this may discourage staff from contributing ideas in the future.
See also seven more ways to encourage innovation in your business.
Improving working practices to boost efficiency
Look at your current working practices, such as staff training and flexible working, to increase efficiency in your business
You can greatly improve your business efficiency by looking at current working practices, and making improvements where possible.
How to assess your working practices
Look at your staff and try to get an understanding of the tools they use for their tasks and how they approach them. It may also be worth thinking about:
- staff morale - make sure you address any concerns they have, as a workforce will only be effective if they are motivated
- training - staff should be aware of the tools available to them through training
- flexible time management - you should explore working arrangements that suit individuals
For example, you can consider offering:
- home working - removing the need to commute may increase staff time spent on the job
- flexible working - this can lead to greater staff satisfaction and increased performance levels
- sabbaticals - an unpaid break can be a good option if you wish to reduce staff but retain skills for periods of growth
- flexible contracts - working from different locations or different hours
See flexible working - the law and best practice.
The assessment of your working practices can give you a framework for improving them and embedding new, more efficient ways of working.
How can you improve employee efficiency?
Your management practices can greatly influence the efficiency and the productivity of your employees. Make sure that you:
- communicate well with staff
- delegate responsibilities to the most qualified employees
- manage performance through effective appraisal systems
- give regular feedback to staff
- offer training, development and mentoring opportunities to staff
- consider offering incentives and perks to motivate staff
See more on staff motivation.
Finally, you should explore new technological solutions that could help your staff work in different ways, eg through remote working or virtual collaboration. You could also outsource certain IT tasks or automate processes to save staff time. Find out how to use technology to improve efficiency.
Saving money through energy and resource efficiency
Understand how energy and resource efficiency and good waste management practices can help you achieve cost savings and make your business more efficient
Energy and resources effect all businesses and can have a major impact on operations in terms of cost and productivity. Increasing efficiency in these areas not only brings increased competitiveness, but also significant environmental benefits.
There are two main approaches to developing your resource efficiency strategy:
- consume less - cut down on what you use, such as paper and ink
- manage your waste - make the most of the waste you generate, eg sell it on or recycle
Resource efficiency in the workplace
Energy efficiency and green operational practice are now widely accepted in the workplace. There is a wide variety of resources online to help you save on energy consumption and minimise your waste.
A few starter tips on workplace efficiency include:
- using office supplies more efficiently - eg don't print out every email
- being innovative with your product design - using less packaging/printing
- turning off lighting or heating when not in use
For more advice on increasing workplace efficiency, see how to reduce your business waste to save money and read about managing your energy use.
Waste management and efficiency
While you will make significant savings by becoming more resource efficient, you will not be able to remove all waste. Managing the waste that you do produce can be just as important. Make sure you can manage your waste by:
- having a waste management plan
- recycling where possible - plastics, paper, metal
- investigating methods of disposal - some waste may even have a resale value
See more on reducing business waste in our efficiency guides: introduction to waste management, waste reviews, policies and action plans and office resource efficiency.
Help with energy and resource efficiency
Invest Northern Ireland (Invest NI) can offer 91香蕉黄色视频 to Northern Ireland businesses interested in reducing their energy, waste and resource costs.
Invest NI's Energy and Resource Efficiency team can provide:
- technical consultancy - to help identify areas for increased efficiency and cost savings
- resource matching service - to find opportunities to turn your waste into another business' resource
- resource efficiency capital grant - to provide investment 91香蕉黄色视频 for projects that aim to reduce the consumption of water, raw materials or waste production
For more information, read about .
Alternatively, you can contact Invest NI's Energy and Resource Efficiency team by email ere@investni.com or Tel 0800 181 4422.
Improving efficiency through lean thinking and Six Sigma
How to use lean thinking and Six Stigma to streamline your operations management and improve your business efficiency
Operations management is a way of organising your business in order to improve efficiency. It provides a framework which can help you with planning, forecasting, or marketing your products or services. The two most common approaches to streamlining operations management are:
- lean methodology
- Six Sigma
Lean and Six Sigma management systems can help you reduce inefficiencies and waste across your business, and increase both the quality of your products as well as your business' profitability.
What is lean methodology?
Lean thinking method focuses on only spending money on resources that create value for your customers. Anything which does not ultimately increase value for your customers is considered wasteful and a target for savings.
Lean is concerned with optimising the flow of work, so it can apply in almost any business or process. You should view lean thinking as a way of thinking and a way of changing the culture of your business for the better. See what are lean methods.
Invest Northern Ireland has created a series of video tutorials on lean thinking to help businesses understand the methodologies involved. .
What is the concept of Six Sigma?
Six Sigma is a methodology similar to lean that started out as a set of practices designed to eliminate defects in manufacturing. It has now extended to other types of business processes and defines a defect as any output that does not meet customer requirements.
Six Sigma methods are data-driven and this data can be used as a management technique across all businesses in order to improve operations. See what is Six Sigma.
You may also be able to use lean methods and Six Sigma together.
Watch a video case study below and hear Brian Johnston, Factory Manager at Moy Park, explain how they use lean thinking to improve process efficiency.
Drive business growth through efficiency
Video tutorial on growing your business through increased efficiency
If you want to grow your business, you must focus on a few core efficiency considerations, such as increasing:
- the number of customers
- the number of sales, including from returning customers
- the average value of each sale
However, focusing solely on your customers or sales will not necessarily enable you to grow your business profitably.
Improving business processes
To make the most of growth opportunities, you must also look at the effectiveness and efficiency of all your business processes, including production, marketing, selling, customer service, finance management, workforce performance and other operational processes.
This short video will help you consider if you are getting the most out of your business and give you tips and strategies for growing profitably.