"How Are We Doing?" Tracking Efficiency, Utilization, and Productivity

Productivity gains lead to competitive advantages. To achieve success, managers need to know if they are making the most effective use of resources. Understanding how well a business is performing compared to other firms in an industry is vital. Efficiency and Utilization are two measures that can be used to answer the question "How are we doing?" Once you have defined key variables and established benchmarks, programs like Microsoft Excel make it easy to set up the necessary calculations and track performance over time. A spreadsheet application is demonstrated that illustrates the concepts discussed. Formulas are included and explained.