Efficiency

The term "efficiency" refers to the peak level of performance that uses the least amount of inputs to achieve the highest amount of output. Efficiency requires reducing the number of unnecessary resources used to produce a given output, including personal time and energy. Efficiency is a measurable concept that can be determined using the ratio of useful output to total input. Increased efficiency minimizes the waste of resources such as physical materials, energy, and time while accomplishing the desired output. The term efficiency can be defined as the ability to achieve an end goal with little to no waste, effort, or energy. Being efficient means you can achieve your results by putting the resources you have in the best way possible. Put simply, something is efficient if nothing is wasted and all processes are optimized. This includes the use of money, human capital, production equipment, and energy sources [Investopedia].

Efficiency looks at what is currently being produced and compares that with what could be achieved with the existing consumption of resources, i.e. labor, time, money, machinery, etc. It is one of the main factors when determining productivity – however, productivity focuses on quantity while efficiency is all about quality and eliminating wastefulness. It signifies a level of performance that describes a process that utilizes the minimum of inputs to create the greatest amounts of output, i.e. getting more out of less. Put simply, efficiency is the ability – often measurable – to avoid wasting energy, money, effort, materials, and time in doing something or in producing a desired result. The ability to do things flawlessly and without waste – the ability to do them well. Efficiency is all about making the best possible use of available resources. Efficient companies maximize outputs from given inputs, thus minimizing their costs. When a company’s efficiency improves, its costs are reduced and its competitiveness enhanced, as long as the focus is also on productivity [Market Business News].

Sources:

What is Efficiency? Investopedia. Retrieved from: https://www.investopedia.com/terms/e/efficiency.asp

What is Efficiency? Market Business News. Retrieved from: https://marketbusinessnews.com/financial-glossary/efficiency-definition-meaning/