[KongchangAI]
ConceptGlobal Efficiency

Global Efficiency

An operations management concept referring to the overall throughput or cycle time of an end-to-end workflow, which is constrained by the slowest stage, as opposed to local efficiency.

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Oct 18

Local efficiency refers to the output rate of a single stage or individual, while global efficiency refers to the throughput capacity of the entire value stream from demand to delivery.

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Oct 18

In complex systems, maximizing local efficiency at every stage often backfires: upstream accelerates output while downstream cannot absorb it in sync, leading to queueing, backlog, and rework, and global efficiency actually declines.

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