Operational Efficiency and its Determinants in Indian Machinery Manufacturing Firms
Arunkumar O N1, Vandana Sonwaney2
1Arunkumar O N, Assistant Professor, Symbiosis Institute of Operations Management (Constituent of Symbiosis International Deemed University), Nashik, Maharashtra, India.
2Vandana Sonwaney, Professor and Director, Symbiosis Institute of Operations Management (Constituent of Symbiosis International Deemed University), Nashik, Maharashtra, India.
Manuscript received on 14 August 2019. | Revised Manuscript received on 21 August 2019. | Manuscript published on 30 September 2019. | PP: 4901-4931 | Volume-8 Issue-3 September 2019 | Retrieval Number: C5585098319/2019©BEIESP | DOI: 10.35940/ijrte.C5585.098319
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Operational efficiency in machinery manufacturing industry is determined using data envelopment analysis models. Data pertaining to 137 machinery manufacturing firms in India for the years 2005–2010 is used for the study. The output can be increased by 30.12 percent without affecting the input levels. Fourteen among the firms identified efficient appear to be peers to other less efficient machinery firms. The slack of the input variables are identified and reducing these to zero is suggested to achieve 100% efficiency. A super-efficiency analysis of peer firms is conducted to identify the firms important for efficiency improvement. The gearing ratio contributes significantly to the inefficiencies, and attaining the efficiency frontier requires the follower of a peer firm to maintain constant values of the sensitive variables and reduce the input slack of the influencing variable to zero.
Keywords: Working Capital Management, Indian Industry, Data Envelopment Analysis, Operational Efficiency.
Scope of the Article: Operational Research