Supply chain of effectiveness and efficiency describes two processes by which an operation manager successfully supplies a customer with a product. Supply chain efficiency refers to the internal standard of performance of the supply. Essentially, supply chain efficiency is defined as a measure of the company’s ability to gather resources in the best way. A supply chain may be efficient but still inadequate for customers as the process may minimise packaging and material costs but the products may not meet the client’s expectations.
On the other hand, supply chain effectiveness addresses the external standard of an organization. As such, it responds to the demands and feedback of groups, organizations, and clients that are concerned with the company’s products or activities. Supply chain effectiveness can be measured through interactions with customers, partners, suppliers, vendors, and other stakeholders. Companies are often able to implement supply chain efficiency, which is necessary but also requires a level of effectiveness. In order to balance the two processes, it is vital to implement company procedures which allow flexibility, quick reactions, and responsiveness.
Specific strategies that can play a role in monitoring both efficiency and effectiveness, especially during times when business procedures fluctuate, include an easily visible work-in-process inventory. As an operation manager, I would observe that internal processes are moderated, such as the maintenance and productive designation of resources, time, and capital. Additionally, both processes should aim to reduce wastage and error. Effectiveness can be improved by constant communication with stakeholders, as the improvement of products and delivery should be a priority for the company. The measurements used to assess efficiency would rely on numerical data, such as costs and profit data that can be used to analyze either increased or decreased efficiency. Effectiveness can be measured by consulting customers, vendors, and other groups that interact with both the product and the delivery provided by the company.
Chan, M. (2019). Efficient versus Effective Supply Chains. Unleashed Software. Web.