Efficiency is doing the right thing, the right way in the right time. For example: I'm going to pick the example @Russell Cross III gave above. "we have a series that takes sixty seconds per, and we find a way to make it 55 seconds, we earn time back to accomplish other tasks." In this case we are measuring the out come, we will be able to produce more parts per hour, and that we call productivity. Efficiency is a lot deeper, how much did it cost to gain those 5"? -New machine -A change in the layout of workstation -New method studied -Automation -etc How long does it take to the investment take to pay it self? And another sensitive part that must be always in focus, the quality standards, at each change( listed above) we need to evaluate the impact on: -Scrap rate -Quality tests -Claims -Etc Efficiency evaluates all that, only then we will be able to do the right thing, the right way in the right time. Believe me Not easy, that's why it is so precious.