Efficient and Effective System => Lower Cost???

Was supposed to post this entry yesterday but I forgot that I save it in my lab desktop.

Anyway, can’t do any work yesterday because I left my important thumbdrive at home. Anyway, was on my way to work and a thought strikes me about efficient, effective and cost-saving issue.

From engineering stand-point, if things such as machine are operating at the efficient speed, this should implied lower cost because it is consuming reasonable amount of energy and producing output at high rate, that is why it is consider efficient. Hence if it is operating at the efficiency point, the cost per piece should be lesser if you consider that based on the same amount of input against high output volume.

For manufacturing stand-point, if things such as an operator implement an effective solution to reduce scrap or assembly time in the production line, based on the same amount of resources, the output would have increased. Hence if the solution is effective, the cost per piece should be lesser also if you are to compare using the same amount of resources against increased in output produced.

So when we said that things are either efficient or effective, it should mean cost-saving or at least lower cost. Am I right to say that? Based on simple Maths and Engineering knowledge, that should stand correct.

Eg. If an original process is operating at initial condition of 1000 hrs, using 100W of electricity per hour at the price of $1 per Watt and can output 100000 pieces of products, the cost per piece is $1/pc.
Now, after implementing an efficient and effective solution to the process, using the same amount of resources, it can output 200000 pieces of products, the cost per piece is $0.5/pc.

But some how, this logic seems so wrong. Yes, it is wrong. Because I always read claims of efficient and effective system but why is the cost still increasing? Shouldn’t the efficient and effective system save the operators money which leads to increase in profit margin… If so, why are they increasing the cost? Or… can I say that the system has yet to reach the standard of efficiency and effectiveness, if so, why are people claiming that they are world class, efficient and effective when they are pumping in more money so to offset the operating cost… Or maybe there is more than what meets the eye… Hmm… Think about it