What is Operational Efficiency?

Operational Efficiency is the ratio of productive output to operational inputs. Restated, the degree of operational efficiency is determined by how much productive output results from the effort or resources invested in the operational activity.

Back to: OPERATIONS, LOGISTICS, & SUPPLY CHAIN MANAGEMENT

Academic Research on Operational Efficiency

• Operational efficiency in banking: An international comparison, Allen, L., & Rai, A. (1996). Journal of Banking & Finance, 20(4), 655-672. This journal does a comparative study of input and output Operational Efficiency of 15 international banks.
• Operational efficiency and effectiveness measurement, Jeong, K. Y., & Phillips, D. T. (2001). International Journal of Operations & Production Management, 21(11), 1404-1416. This paper computes a new scheme for measuring Operational Efficiency by factoring in time sinks and Overall Equipment Effectiveness (OEE).
• An analysis of the operational efficiency of major airports in the United States, Sarkis, J. (2000). Journal of Operations management, 18(3), 335-351. This journal studies empirical data to evaluate the Operational Efficiency of 44 major airports in the US.
• Benchmarking the operational efficiency of third party logistics providers using data envelopment analysis, Min, H., & Jong Joo, S. (2006). Supply chain management: An International journal, 11(3), 259-265. This journal sheds light on the Operational Efficiency of third party logistics providers (3PLs), with the aim to benchmark industry standards and postulate best practices.
• Empirical evidence on the operational efficiency of National Oil Companies, Eller, S. L., Hartley, P. R., & Medlock, K. B. (2011). Empirical Economics, 40(3), 623-643. This journal studies empirical data from 78 National and International Oil Companies to gauge their Operational Efficiency by using the Data Envelopment Analysis (DEA) method and applying stochastic frontier estimation.
• Linking strategic flexibility and operational efficiency: The mediating role of ambidextrous operational capabilities, Kortmann, S., Gelhard, C., Zimmermann, C., & Piller, F. T. (2014). Journal of Operations Management, 32(7-8), 475-490. This paper studies the relationship between Operational Efficiency and Strategic Flexibility by incorporating insights from literature, practice, and dynamic resources. 
• Increasing the operational efficiency of container terminals in Australia, Kozan, E. (1997). Journal of the Operational Research Society, 48(2), 151-161. This paper studies the factors affecting the Operational Efficiency of railway containers in Australia and devises a heuristic model to simulate and address limitational barriers. 
• The Indian auto component industryEstimation of operational efficiency and its determinants using DEA, Saranga, H. (2009). European Journal of Operational Research, 196(2), 707-718. This paper studies empirical data from 50 auto manufacturing firms in India and analyses the determinants of their Operational Efficiency using the DEA model. It suggests labour law reforms and better capital management to reduce inefficiencies.
• Improving business processes for increased operational efficiency: a case study, Kumar, S., & Harms, R. (2004). Journal of Manufacturing Technology Management, 15(7), 662-674. This is a case study of business practices that can improve Operational Efficiency.
• The end of the month as a preferred habitat: A test of operational efficiency in the money market, Ogden, J. P. (1987). Journal of Financial and Quantitative Analysis, 22(3), 329-343. This journal takes a close look at the factors affecting Operational Efficiency in the money and financing world.
• Alliances in liner shipping: an instrument to gain operational efficiency or supply chain integration?, Evangelista, P., & Morvillo, A. (1999). International Journal of Logistics: Research and Applications, 2(1), 21-38. This paper explores the concept of Operational Efficiency in the liner shipping sphere, shedding light on the growth and adaptation of the sector to the changing environment.