Efficiency is an interesting concept. It is one of those ideas that people believe they understand, but when talking to them about efficiency, there doesn’t seem to be a clear and agreed upon understanding of what it really is. There are common beliefs about efficiency, however. One common belief is that by increasing efficiency you will lower costs. Many programs focus on improving efficiency in the name of reducing costs. This is actually a driving factor behind the famed Toyota Production System, the precursor to well known concepts such as lean.1 The question is: Does it really work? The answer is: Yes and no.
To begin, let’s define efficiency in a way that will be used throughout the book. Efficiency is ...
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