2.3 System performance and standards

Whether a system works properly, can be identified by evaluating its performance. System
performance can be measured in various ways. Two important indicators in the system
performance are efficiency and effectiveness.

Efficiency: measure of what is produced divided by consumed (output/input)
It may range from 0 to 100 percent
Example: The efficiency of a motor is the energy produced (in terms of work done)
divided by the energy consumed (in terms of electricity or fuel). Some motors have an
efficiency of 50 percent or less because of the energy lost to friction and heat
generation.

Efficiency is a relative term used to compare systems.

Example: a gasoline engine is more efficient than a steam engine because, for the
equivalent amount of energy input (gas or coal), the gasoline engine produces more
energy output.

Effectiveness: extent to which system attains its goals or objectives. It can be computed by
dividing the goals/objectives actually achieved by the total of the stated or expected
goals/objectives of the system.

Example: A company may have a objective to reduce damaged parts by 100 units. A
new control system may be installed to help achieve this objective. Actual reduction in
damaged parts, however, is only 85 units. The effectiveness of the control system is 85
percent (85/100 = 85%).

Effectiveness, like efficiency, is a relative term used to compare systems.
System performance standard: A specific objective of the system.
The system performance standard is defined considering both effectiveness and efficiency
of the system since the goal of a system is usually defined considering both these factors. The
status of the system (whether it is good or bad) is then described with respect to this
standard.

Example: A system performance standard for a particular marketing campaign might
be to have each sales representative sell $100,000 of a certain type of product each
year

A system performance standard for a certain manufacturing process might be to have no
more than 1 percent defective parts:

• Once standards are established, system performance is measured and compared
with the standard. Variances from the standard are determinants of system
performance.