A business focusing on increasing the efficiency of its operations is more directly addressing
Answers
When improving operational efficiency, companies have a few alternatives. The most common are:[3]
Same for less, i.e. same output for less input
More for same, i.e. more output for same input
Much more for more, i.e. much more output for more input
It is a common misconception that costs, in absolute terms, are always cut when improving operational efficiency. It is true for the "same for less" alternative, but not for the two other alternatives. It can be operationally efficient to increase cost - as long as the output is increasing more.
One example of a same for less alternative is when a manufacturing company reduces its total personnel (and thereby personnel cost) while still producing the same volume of goods. This can e.g. be achieved through centralization, automation or optimization of working processes.
An example of a more for same alternative is a manufacturing company reducing its output of faulty products (and thereby reducing after sales cost) without using more money or resources. This can e.g. be achieved through use of quality management systems, addressing quality in existing training programs for personnel or introduction of higher quality requirements when prolonging subcontractor agreements.
An example of a much more for morealternative is when a manufacturing company invests in a new production plant that lets them produce products with more refinement than what they could produce in the old plants. They can sell these products at a premium that more than compensates for the additional cost. Another example of "much more for more" is when a service company invests in expanding its customer service to increase customer satisfaction and customer loyalty.