Difference between efficiency and effectiveness in logistics
Although the terms efficiency and effectiveness have been present in business management for decades, there are still some confusions in the domestic language, even using them interchangeably or as synonyms.
And although the definitions could be similar, they are rather concepts that apply to each step of the management and that requires a balance to achieve the desired results.
Efficiency in the field of logistics
There is talk of efficiency: when it is sought to achieve that the productivity or internal operations have the best result by consuming the least amount of resources possible, that is, that the goal is achieved in the least amount of time possible at the lowest possible operating cost.
Regarding efficiency: it is to achieve the highest degree of satisfaction of the real needs of the client.
To simplify, efficiency refers to the “how” processes are carried out, while efficiency speaks of “what” service is provided. In other words, the means and the fulfillment of the purposes.
Effectiveness in the field of logistics
Beyond what and how, there is effectiveness and quality. These are other concepts of business administration or management that could be expressed as the balance between efficiency and effectiveness, determining what is done is the right thing at the right time and at the lowest cost.
It could be said that, if we are from the customer’s point of view, efficiency has more weight when hiring a logistics service, focusing on the delivery of goods in a timely manner, the service is as expected.
Efficiency tends to be seen as an internal matter because of operating costs, so it could be assumed that the customer does not weigh the number of contingencies that arise – for example, when preparing an order for dispatch – whenever he receives the product as agreed, that the service be effective.
However, that would be a vision too vague, since today both customers and competitors, lead companies from all sectors to consider the business in terms of effectiveness and quality.
Providing an effective service under the premise of efficiency, provides an increasingly competitive logistics sector, the opportunity to review the operational processes to the point of finding the balance that allows you to offer high quality services at a good price.