Growth through Efficiency
Date posted: April 25, 2014
A long time ago, I learned that sometimes the simple things are the most important. Some are saying this should be the guiding principle for our economy, especially as it applies to using our resources, says host Mary Walden. She asks her husband, N.C. State University economist Mike Walden, “Please explain.”
Mike Walden : Well, let me explain this by using a couple of examples. First of all, let’s look at the average internal-combustion-engine-powered vehicles which most of us drive. It’s estimated that 80 percent of the fuel that we use in that vehicle never reaches the wheels of the vehicle to propel us forward. It’s used for other things — idling, running air-conditioning, running heat, running our electronics, etcetera. That’s an amazing statistic. So if we could reduce that, if we could reduce the loss, if you will, of fuel in the internal combustion engine, that would mean a tremendous increase in efficiency. It would reduce our need for oil and gasoline. It would reduce fuel costs, etcetera. Another example: Recently a national pizza chain hired a consultant to come in and track how their pizzas are made. This consultant watched the steps that the workers took and the movement that they used, in terms of getting a pizza from the original ingredients to the customer. And what that consultant found is, by changing where the prep stations are, they could actually reduce the amount of time taken to make a pizza by 30 percent. And that company actually employed those techniques. They were able therefore to lower their costs and improve their profits. So these are two real good examples of how we can actually improve our economy, use fewer resources, and increase the returns of the businesses and workers — by using what we have more efficiently.
Category: Economic Perspective