Efficiency Is More Than Cost Cutting: What healthcare can learn from a century of manufacturing thinking
by Michael O’Connor, Australia Principal
Efficiency can be an uncomfortable word in healthcare. Too often it’s heard as shorthand for cost cutting, or reducing headcount. When people hear “efficiency programme,” they assume it means doing more with fewer people.
But, in industries like manufacturing, efficiency has always been about something different: designing processes so work flows better.
The Origins of Efficiency Thinking
If you go back more than a hundred years, Henry Ford was already trying to solve the challenge of producing cars at scale. That’s where ideas like standardisation and production flow began to emerge.
Toyota later built on this thinking in the 1950s and 60s with what became known as the Toyota Production System, a focus on continuous improvement and the elimination of waste in processes.
What came out of that work was a simple idea: the people doing the work are usually the ones best placed to improve it.
In manufacturing teams are encouraged to constantly identify what adds value and what doesn’t. In lean thinking we talk about “value add” and “non-value add.” Value-adding activities are the steps that actually matter to the customer. Non-value-adding steps are a waste. Over time those small improvements compound. Processes become smoother, work flows more easily and quality improves.
Early in my career I worked within the Toyota environment where this thinking originated, and that experience has shaped how I approach operational design with clients today.
Why Efficiency Gets Framed Negatively in Healthcare
Healthcare faces many of the same operational challenges, but efficiency is often framed very differently. One reason is the perception that efficiency equals cost cutting. Another is that many healthcare organisations already have people spotting problems every day; clinicians, nurses, technicians and administrators. However, their ideas don’t always go anywhere because the thinking is not always joined up, either because they don't have an avenue within the organisation to develop and implement a solution, there is a lack of support for investing in improvement at a leadership level, or quite simply because everyone is just too busy firefighting.
When suggestions aren’t acted on, people stop raising them and simply work around the broken process. That’s when inefficiency becomes normalised.
In our work at Tektology, we regularly see highly capable teams who know where the problems are, but whose insights do not always translate into structural change.
What Manufacturing and Healthcare Can Learn from Each Other
Manufacturing and healthcare operate in very different environments, but they share some surprisingly similar challenges. Manufacturing tends to work with highly standardised processes. You’re building the same product repeatedly, using the same components and steps. Healthcare is far more variable. You never quite know what will come through the door — a broken leg, a heart attack, or something far more complex.
But even with that complexity, patterns still emerge. Over time, patient flows tend to follow predictable distributions.
When you look closely at how work moves through a hospital or health service, many of the same questions apply as in any production environment:
Where are the bottlenecks?
Where are the handovers?
Where are the steps that add no real value to the outcome?
Answering those questions is where real efficiency begins.
Why Process Redesign Must Come Before Digitisation
Technology is often introduced as the solution to inefficiency. New software, new systems, new digital tools.
But technology on its own rarely fixes the underlying problem. If the process itself is broken, digitising it simply means you automate the inefficiency.
Before introducing technology, organisations need to understand the process they’re trying to improve. That means identifying where waste exists, simplifying how work moves through the organisation, and ensuring the people doing the work have a voice in shaping those improvements.
Once the process works well, digital solutions can then support it — helping information flow more easily, reducing duplication, and making the overall system more responsive.
That’s when technology genuinely delivers value.
Much of our work at Tektology focuses on helping organisations redesign these operational foundations first, so that digital investment supports better processes rather than embedding existing problems.
Efficiency Is About Better Outcomes
In my experience working across both manufacturing and healthcare, including my work today with clients at Tektology, the lesson is consistent. Efficiency isn’t about cutting resources. It’s about designing better ways of working.
When processes improve, organisations don’t just reduce waste, they deliver better outcomes for the people they serve. And in healthcare, that ultimately means better care for patients.
The challenge for healthcare leaders isn’t whether efficiency matters, it’s how to design it into the system so today’s improvements don’t become tomorrow’s constraints.
Michael O'Connor is a Principal at Tektology based in Australia, specialising in operational transformation, Lean systems and large-scale performance improvement. With a background spanning Toyota, EY and global consulting, he works with organisations to translate strategy into sustainable operational change.