Measuring resource efficiency and resource effectiveness in manufacturing

Abstract

Purpose The purpose of this paper is twofold: first, to identify and analyse existing resource efficiency (RE) and resource effectiveness measures and indicators (REMIs); and second, to identify gaps and develop a new indicator of “operational resource effectiveness” (OREft) suitable for manufacturing units. Design/methodology/approach Research methodology consists of three stages: gap identification, development and testing. Through review of academic literature, 40 REMIs are identified and analysed. A survey of manufacturers is carried out to validate the hypothesis and seek inputs on the development of the new indicator. The proposed indicator is tested by comparing OREft index of two manufacturing units with each other, with resource intensity per unit (RIPU), waste intensity per unit (WIPU) and with four other REMIs. Findings Analysis of 40 REMIs clearly points towards the absence of a hypothesised REMI. In total, 78 per cent of manufacturers surveyed in north England substantiate the hypothesis. Inverse correlation established between the proposed OREft indicator, RIPU, WIPU and other comparisons is likely to validate the output generated by the proposed indicator. Research limitations/implications Testing of this indicator is limited to two dissimilar manufacturing units that shared data. Practical implications The proposed indicator is useful for comparing the operational resource effectiveness of individual factories over a period as well as with other factories. RIPU and WIPU captured in this indicator also represent operational RE that can be used to initiate improvement action. Originality/value Inclusion of both, the resource consumption and the waste generation along with discount/multiplying factors that capture the circularity aspects is likely to be the distinguishing feature of this indicator.