Description of the Problem Statement In this assignment, the organizational problem that will be addressed is the operational inefficiency in businesses. Business operations are the activities that keep on running in a business. Thus, operations entail the work of managing the inner workings of a business to ensure that it runs as efficiently as possible. Some of the processes that are involved in business operations include production of the products, inventory management, selling of the final products, and all the other necessary operations to make the production of goods a success. Operational efficiency is a measure that is used to measure the relationship between the output that is produced in a business and the input that is used to run the business (Saranga & Nagpal, 2016). When a business has operational efficiency, it has a high output to input ratio. On the other hand, when a business had a low output to input ratio, it is termed as having a low operational efficiency, or in short, operational inefficiency. Operational inefficiency affects inventory management, the process and quality of the products produced by a company, and the controlling and improvement of the production process. Operational inefficiency is not desirable for a business. It leads to decreased profits, decreased productivity, and at times low-quality products. That may lead to a business losing its loyal customers, which would have a more adverse effect on the business (Invernizziet al., 2018). Some of the common causes of operational inefficiency include improper planning, poor scheduling, poor team quality control and supervision, and poor data management systems. Operational inefficiency mostly begins during the planning stage of a project or when setting the goals and objectives of an organization. Some activities such as the neglect of the resource deficiencies or redundancies in a business’s operations may lead to operational inefficiency in a business. Failure to develop operational contingencies may also lead to operational inefficiencies in a business. 2 Operational inefficiency in a business may also be caused by poor scheduling. Without proper scheduling, activities are not done as they should be done thus decreasing a business’s efficiency. The activities and processes that are carried out in a business should be clear. Moreover, the responsibilities of the employees should also be clear to ensure that all the activities are carried out as it is required. That promotes business efficiency. Poor team quality control and supervision also promote operational inefficiency. That occurs when the teams in an organization are not effective. They may be taking too long to complete tasks due to lack of coordination or other issues, missing the set deadlines, or providing poor quality work. That affects the operational efficiency of an organization. Poor data management systems may also ...

1. Description of the Problem Statement
In this assignment, the organizational problem that will be
addressed is the operational
inefficiency in businesses. Business operations are the activities
that keep on running in a
business. Thus, operations entail the work of managing the
inner workings of a business to
ensure that it runs as efficiently as possible. Some of the
processes that are involved in business
operations include production of the products, inventory
management, selling of the final
products, and all the other necessary operations to make the
production of goods a success.
Operational efficiency is a measure that is used to measure the
relationship between the output
that is produced in a business and the input that is used to run
the business (Saranga & Nagpal,
2016). When a business has operational efficiency, it has a high
output to input ratio. On the
other hand, when a business had a low output to input ratio, it is
termed as having a low
operational efficiency, or in short, operational inefficiency.

2. Operational inefficiency affects
inventory management, the process and quality of the products
produced by a company, and the
controlling and improvement of the production process.
Operational inefficiency is not desirable for a business. It leads
to decreased profits,
decreased productivity, and at times low-quality products. That
may lead to a business losing its
loyal customers, which would have a more adverse effect on the
business (Invernizziet al., 2018).
Some of the common causes of operational inefficiency include
improper planning, poor
scheduling, poor team quality control and supervision, and poor
data management systems.
Operational inefficiency mostly begins during the planning
stage of a project or when
setting the goals and objectives of an organization. Some
activities such as the neglect of the
resource deficiencies or redundancies in a business’s operations
may lead to operational
inefficiency in a business. Failure to develop operational
contingencies may also lead to
operational inefficiencies in a business.

3. 2
Operational inefficiency in a business may also be caused by
poor scheduling. Without
proper scheduling, activities are not done as they should be
done thus decreasing a business’s
efficiency. The activities and processes that are carried out in a
business should be clear.
Moreover, the responsibilities of the employees should also be
clear to ensure that all the
activities are carried out as it is required. That promotes
business efficiency. Poor team quality
control and supervision also promote operational inefficiency.
That occurs when the teams in an
organization are not effective. They may be taking too long to
complete tasks due to lack of
coordination or other issues, missing the set deadlines, or
providing poor quality work. That
affects the operational efficiency of an organization.
Poor data management systems may also result in operational
inefficiencies. Today, most
businesses harness big data to identify the trends and insights in
a business to improve its

4. operations. However, if the data management systems that are
implemented by a company are
ineffective, it may lead to reduced operational efficiency in an
organization.
Justification for Solving the Problem
Operational inefficiency has adverse effects on an organization.
It may lead to loss of
customers, poor quality products, increased production costs,
reduced employee satisfaction,
reduced revenues, and reduced profitability. That indicates the
significance of solving the
problem of operational inefficiency in an organization. Through
solving the operational
inefficiency, a business will have improved outcomes such as
high-quality products, reduced
production costs, higher customer acquisition and retention,
increased revenues, and increased
profitability. Since such positive aspects are desirable, it is
essential to solving the issue of
operational inefficiency.
An organization's strategic initiative is a means through which
an organization translates its

5. 3
goals and visions into practice. That indicates that organizations
need to formulate strategic
organizational initiatives to ensure that they are competitive in
the market. The organizational
strategic initiative in this case is to improve the operational
efficiency of the organization by
harnessing the insights provided from big data analytics. That
will enable the organization to
provide high-quality products to its customers thus increasing
customer acquisition and retention.
Increased operational efficiency will also streamline the
processes in the organization thus
reducing the operational costs. That will affect the profitability
of the organization positively.
Use of Statistical Applications to Solve the Problem
Various statistical applications may be used to solve the issue
of operational inefficiency in
a business. With the advancement in technology, a lot of
organizations have adopted the use of
big data analytics to identify the organization’s trends and
essential insights that may be used to
come up with strategic decisions that may improve not only the
operational efficiency of a

6. business but also other aspects such as effective marketi ng, and
promotion of customer
satisfaction. Big data should be analyzed descriptively to ensure
that optimal insights are derived
to ensure that an organization achieves operational efficiency.
Some of the activities that are
improved through statistical applications in an organization to
improve operational efficiency
include improving the processes’ effectiveness and quality of
the products produced, improving
inventory management in an organization, and promoting
effective controls that improve the
production processes. Examples of statistical techniques that
may be used in the analysis of an
organization’s data to promote operational effectiveness include
statistical quality control,
sampling inspection, six sigma analysis, and ABC analysis.
Statistical quality control is us of statistical methods in
monitoring and maintaining the
quality of the products and services of an organization. It is also
used to measure the variation in
4

7. the processes of an organization. The statistical technique uses
the data that is collected by an
organization to determine whether the processes and the
products and services that are produced
by the organization are of the desired quality. It s also used to
monitor the process outputs, which
are the dependent variables in this case (Montgomery, 2020).
Statistical quality control has seven
quality control measures and seven supplemental tools. The
seven quality tools that are used
include stratification, cause, and effect diagram, scatter
diagram, check sheet, Pareto chart,
control chart, and histogram. The seven supplemental tools
include data stratification, sample
size determination, defect maps, process, flowcharts,
randomization, event logs, and progress
centers.
Six Sigma is a quality management statistical measurement
method that is used by
organizations to improve their current processes, products and
services, and eliminating the
defects in their processes. The main objective of the six sigma s
to streamline quality control in

8. the business processes to ensure that there is little to no
variance throughout the production
process. The six sigma process is expected to be error -free
99.99966% of the time (Chuganiet al.,
2017). That indicates that only 3.4 defective features may be
identified in every one million
opportunities. That indicates that it is a very effective statistical
technique that may be used by
businesses. Six sigma uses three principles to reduce and
eliminate the number of defects
namely; smaller is better, larger is better, and nominal is best.
The smaller is better represents the
upper specification limit that targets having zero defects. The
larger is better represents the lower
specification limit such as the target being 100%. The nominal
is best targets the middle ground
by stressing that the organization should put enough effort into
an activity but not too much that
leads to wastage of resources. Six sigma has two methodologies
namely the DMAIC and
DMADV. The DMAIC methodology has five stages namely;
define, measure, analyze, improve,
5

9. and control. The DMADV also has five stages namely; define,
measure, analyze, design, and
verify.
ABC analysis is a measurement method in inventory
management. It is used to categorize
techniques. He technique categorizes the inventory into three
categories namely; the A items, the
B items, and the C items. They are categorized based on the
value that they bring to the business.
Categorizing the inventory in this manner promotes effective
inventory management thus
increasing the operational efficiency of the organization (Khan
et al., 2017). The A category of
the goods are essential to the business and they may be
business-critical. They have high value
and they are mostly sold in large volumes. The B category of
inventory is significant but less
significant than the A goods and more significant than the C
goods. They are mid-range in their
value and demand. The C goods are marginally essential and
they have a low inventory value.
Before using this technique in the categorization of the goods,
the big data in a company is

10. analyzed to identify the goods that have the highest value in a
business.
Sampling inspection is an inspection method that is used to
determine whether the products
that are being produced and the processes are of high quality. It
is a statistical method that is
used to identify the operational efficiency of an organization
(Rezaei, 2016). The statistical
technique evaluates a sample of the products that have been
produced and the processes to
determine whether the organization has the required operational
efficiency. The use of big data
analytics is also harnessed in sampling inspection to identify
the effectiveness of an
organization’s products and operations.
In a nutshell, quality control is very significant in an
organization. Operational inefficiency
has adverse effects on an organization such as decreased profits,
decreased productivity, and at
times low-quality products. With the advancement in
technology, organizations are adopting the
6

11. use of big data analytics. With the big data that is collected by
organizations, they should
promote the use of statistical applications. Some of the
statistical applications that may be used
to improve operational efficiency are statistical quality control,
sampling inspection, six sigma
analysis, and ABC analysis. They are harnessed to improve
operational efficiency include
improving the processes’ effectiveness and quality of the
products produced, improving
inventory management in an organization, and promoting
effective controls that improve the
production processes.
7
References
Chugani, N., Kumar, V., Garza-Reyes, J. A., Rocha-Lona, L., &
Upadhyay, A. (2017).
Investigating the green impact of Lean, Six Sigma and Lean Six
Sigma: A systematic
literature review. International Journal of Lean Six Sigma.
Invernizzi, D. C., Locatelli, G., & Brookes, N. J. (2018). The
need to improve communication

12. about scope changes: frustration as an indicator of operational
inefficiencies. Production
Planning & Control, 29(9), 729-742.
Khan, S. A. R., Dong, Q. L., & Yu, Z. (2017). Role of ABC
Analysis in the process of efficient
order fulfillment: Case study. In Advanced Engineering Forum
(Vol. 23, pp. 114-121).
Trans Tech Publications Ltd.
Montgomery, D. C. (2020). Introduction to statistical quality
control. John Wiley & Sons.
Rezaei, J. (2016). Economic order quantity and sampling
inspection plans for imperfect
items. Computers & Industrial Engineering, 96, 1-7.
Saranga, H., & Nagpal, R. (2016). Drivers of operational
efficiency and its impact on market
performance in the Indian Airline industry. Journal of Air
Transport Management, 53, 165-
176.