7 Important Steps to Improve Operational Efficiency

When it comes to improving your business operations, there is no one-size-fits-all strategy. You have to look at the different processes involved in your business–from sales and marketing to product creation and delivery. 

Here, we’ve listed the strategies you can do at a minimum to improve your organization’s overall operational efficiency.

Process diagram

What is operational efficiency?

Operational efficiency refers to the ratio of your company’s input and output. It tells you a clear picture of your organization’s performance from admin tasks to supply chain systems.

All the processes involved in your business need to work seamlessly for you to prevent any unnecessary expenses, customer distrust, or any other factors that may affect your profit margins.

Ways to improve operational efficiency

1.   Improve your customer service

In a Gartner 2021 study titled, 2021 Customer Service Trends and Priorities, it was stated that as organization increase their digital presence and launch new channels, there has been a growing need for customer service personnel to be more proactive towards the customers’ needs. It revealed that 87% of customers are not getting proactive services from the brands they trust. 

Your customer service team is the first people your clients talk to when they have questions, issues, or concerns. In other words, your customer service support acts as the gateway for your customers to experience your brand.

If you invest in proper training and process improvement to enhance your support department, you’re in a much better position to increase customer retention, positive word-of-mouth, and revenues.

2.   Build your inventory

One of the pitfalls of running a retail company is not keeping tabs on inventory–from the raw materials that make up the product to the actual item that’s bound to your customer’s address.

Maintaining sound inventory management means overseeing purchases from suppliers, maintaining healthy stock levels, collecting customer orders, and delivering requests. If you’re not keen, you might encounter a surplus of inventory and obsolescence, which could have a direct negative effect on your sales.

Take a look at your product creation process: how long does it take for you to get low-cost raw materials? What is your current timeframe for developing goods from start to finish? If you want to run more efficient business operations, you need to maintain inventory in a way the meets your customer’s demands while keeping overhead costs low.

3.   Document your processes

Documenting your organization’s existing processes allows you to have a single reference that your employees can go back to anytime they need it. This contains all the certain steps needed to perform every task efficiently, as well as how to remedy problems that may come up during operations.

When you document your business operations, you also allow incoming managers and employees to have something to review in their free time, therefore shortening the time for training. 

4.   Find and eliminate bottlenecks

When business operations are not working the way they should, it can be frustrating. Instead of finding people to blame for the inefficiencies, it’s better to get to the bottom of the problem and eliminate bottlenecks as quickly as you could.

Bottlenecks doesn’t necessarily pertain to people; it may also be the tools being used. Sometimes, the tools being utilized to run automated tasks do not work simply because they do not support existing processes. In other cases, the bottleneck could be the process itself. Your company’s processes may be too outdated and may no longer support today’s remote operations. 

Find the inefficiencies in your processes and don’t be afraid to experiment. After all, there’s no single truth to running an efficient organization.

5.   Hire the right talent

Supposing that your company already has the right technology and a well-documented process in place, you have to find the right person to maneuver, manage and oversee the entire operations.

This is particularly important if your company is undergoing digital transformation. You could be using the best-in-class tools, but without the right person to handle it, chances are you won’t succeed at maintaining operational efficiency. 

If hiring someone to do the job is too costly, you can provide the necessary training for your employees so they know how to use the tools. This is essential for project management: if your employees are skilled enough to handle critical tasks, you won’t have to worry about your project’s results.

6.   Automate repetitive and time-consuming tasks

Gone are the days when running things manually works to your advantage. At this time when everyone’s working from home, it’s more important to streamline your processes through automation.

More traditional processes usually take time, which could have been spent on projects that will bring more value to the organization. For example, your accounting, bookkeeping, marketing and administrative functions can be automated so you won’t have to monitor them every single day.

To start off, identify which critical tasks in your business are taking a huge chunk of your time. Create a list of all processes that can be automated, then look for tools that will help you manage it. Leveraging automation for operational efficiency and service management will help you mitigate human error and save you so much time.

7.   Keep things simple

Lastly, keep things simple. Remember that the simpler your operations are, the lesser time you’ll spend managing them. Not to mention that keeping your operations simple also allows your employees to easily follow them.

Don’t overcomplicate your processes to achieve your goals. If it’s too difficult for your employees to stick to the program, it only means that you have to eliminate some processes in your operations and stick to those that work. Don’t strive for perfection; always strive for efficiency first, then add more processes slowly.


Ensuring your operational efficiency is not a one-and-done initiative. It is a consistent effort to improve every area of your business to make sure that you meet customer demands and stay in business for a long period of time. 

For assistance in increasing the operational efficiency, processes, and strategies within your company, contact Red Beach Advisors at www.redbeachadvisors.com or info@redbeachadvisors.com

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