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How to Calculate Operational Efficiency for a More Productive Business

16 July 2026

Learn how to calculate operational efficiency, including formulas, calculation examples, and how to interpret the results to boost business productivity.

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How to Calculate Operational Efficiency

Rising operational costs do not necessarily indicate business growth. In many cases, it can actually be a sign that work processes are not yet running efficiently. Therefore, companies need to measure their operational efficiency to ensure that the resources used are yielding optimal results.

One of the most common methods is calculating the operational efficiency ratio. Through this calculation, companies can compare operational expenses with the revenue earned, making it easier to evaluate performance, identify opportunities for improvement, and formulate the right strategies to increase productivity. So, how do you calculate operational efficiency? Find out in the following explanation.

How to Calculate Operational Efficiency?

To determine whether your company's operations are running efficiently, you need to measure them using the operational efficiency ratio. This measurement helps companies understand whether the operational costs incurred are proportional to the revenue generated, allowing business decisions to be driven by data.

One of the most common methods used is calculating the operational efficiency ratio.


Operational efficiency ratio formula:

(Operating Expenses + Cost of Goods Sold) ÷ Net Sales

After obtaining the result from the calculation, multiply it by 100 to get the value in a percentage format.

For example, if a company's operating expenses are IDR 300 million, the cost of goods sold is IDR 500 million, and net sales reach IDR 1 billion, the calculation is as follows.

(IDR 300 million + IDR 500 million) ÷ IDR 1 billion × 100 = 80%

This means that 80% of the company's revenue is used to cover operating expenses and the cost of goods sold.

Generally, the lower the operational efficiency ratio, the better the company's capability to manage costs. Conversely, if the ratio continues to rise, the company needs to evaluate its business processes so that expenses can be controlled without compromising the quality of customer service.

Nevertheless, knowing the ratio calculation results is not enough; it must also serve as a foundation for evaluation. Companies can analyze the root causes of high operational costs, such as manual work processes, suboptimal team productivity, or a high volume of repetitive customer inquiries that require recurring handling. By understanding these causes, companies can determine more targeted improvement steps.

Ultimately, calculating operational efficiency is not just about knowing how large or small the expenses are. This measurement becomes the basis for making more effective decisions, increasing productivity, and supporting long-term business growth.

If your company aims to optimize operational efficiency, PT VADS Indonesia is ready to assist through various solutions, such as AI Chatbot, Interaction Analytics, and Customer Relationship Management (CRM). Supported by advanced technology and experienced professionals, your company can optimize operational processes, enhance customer experience, and focus more on developing its core business.



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