Economic essence of efficiency and its types

Abstract

Economic efficiency plays an important role in the activity of the enterprise because it gives it a reason to improve its activity. The paper is devoted to the determination of the essence of economic efficiency and the proposal to complement the existing methods by proposing the use of the efficiency indicators of the use of equipment. The paper presents the statements of scientists about the essence of economic efficiency. It was determined that in economic theory, efficiency is most often defined as the ratio of achieved effects to increased costs, taking into account certain variables related to production factors. In order to improve the process, we proposed to implement OEE (Overall Equipment Efficiency) monitoring in key operations from the point of view of production costs, that is, an indicator that helps to calculate the efficiency of using machines and devices. This metric is used to compare the performance of individual machines, answer the question of whether a machine or individual machine is capable of producing more quality products than before, and use it to verify the steps taken to eliminate machine downtime. Due to the use of this indicator, it is possible to determine in a not very complicated way the areas where losses are generated for the company. The use of such a technique will give the enterprise a competitive advantage, as it will allow for prompt intervention in the production, distribution and sales process, because this indicator can be used not only to determine the efficiency of mechanisms, but also processes. Thus, competitive advantage in the instrumental approach refers to the strategic approach of the enterprise, which is based on the maximum use of resources and means to ensure differentiation from competitors and the ability to achieve success in the market. Application of this approach will provide an opportunity to improve the management system by optimizing business processes within the enterprise due to automation, introduction of new technologies and improvement of work processes to increase productivity and quality of production, optimization of internal processes, communication with customers, data management and analytics.