Why is it important to distinguish efficiency and efficacy ?

AP2V Conseils give you here some insights so you do not confuse these two notions anymore and allow you to implement appropriate actions to boost your performance !

 

"What's the difference between efficiency and efficacy ?"

If you ask the following question to any student :

 

"What do you prefer ?" :

Have a A- on your exam after reviewing a whole weekend ?

or

Have B+ after reviewing only 1 hour ?

 

Assuming that the minimum validation score for the exam or diploma is 10/20, it is not uncommon for a majority of students to choose the second option: many people in this case will indeed probably prefer a slightly worse score but with a much lower effort, which allows them to do something else with the time they have saved : sports, relax, revise another subject, work to finance their studies, etc.

 

The students who choose this option actually follow a reasoning of efficiency: to look for the optimum between result obtained and resources spent.

 

Here is the major difference between these two notions :

Efficacy tends to measure the optimal use of resources or the achievement of predefined objectives, while efficiency measures the level of performance of the result obtained according to the resources consumed.

 

In our example of the students, the two proposed answers are effective because they make it possible to satisfy the objective which is to have at least 10/20, on the other hand the second answer is much more efficient than the first one (almost 90% of saving resources).

 

Consequences in companies and for people

 

Let's take the following examples illustrating the notion of efficacy (these are deliberately simplified examples for a better understanding): 

 

Service Company: The most important "resource" in this type of business is time. Indeed, it is the time spent by each employee that conditions the production of business. It is for this reason that KPIs (Key Performance Indicators) used for production management are very often time-related: monitoring the number of hours spent on business, absenteeism rate, monitoring the number of hours spent on contracts, etc.

The aim is that each employee spends a maximum of time on "production" projects, ie projects that allow the company to bill.

 

Company of products : in this type of company, time is obviously an important resource because it has a direct impact on production costs via the manpower, however other resources more "material" are consumed according to the type of goods manufactured: water, electricity, acetone, gas, hydrogen, steel, etc. The KPIs (Key Performance Indicators) used for production management are intended to make the best use of these resources: for a paper production plant for example, water consumption is very important, so it is essential to monitor this parameter in order to be sure that every cubic meter consumed (thus bought) and indeed used for the production of paper itself. The idea is to be able to detect possible process drift, leakage or other production risks.

 

Regarding efficiency, it is often accepted the trend represented by the following evolution curve, showing the level of result (quality) obtained according to the quantity of resources injected into the production:

 

The main challenges for a company, whatever the type of product or service it offers, are :

- Know as accurately as possible the level of quality accepted by the client for each service or product

- Optimize the efficacy of the resources spent : time spent on business, consumption of raw material, etc.

- Adapt production methods and organizations for each service or product to achieve maximum efficiency

 

AP2V Conseils offers you, thanks to its unique method, organizational consulting services and research of performance adapted to your needs and your objectives, which allow you to answer these challenges !

 

 

Author: Florent POULET, State Certified Professional Coach - Engineer - Founding President AP2V Conseils - Copyright All Rights Reserved July 2018