Professional Documents
Culture Documents
& comparing ones organisational processes against comparable processes in leading organisations, to obtain information, that will help the organisation, identify & implement improvements. (Kaiser Associates)
Search for industry best practices that lead to superier
performance. (Robert Camp-Xerox) A standard of excellence or achievement against which other similar things mustbe measured or judged. (sam Bookhart Dupont)
History
Benchmarking is borrowing best practices.
Benchmark A surveyers mark - reference point. No reference to benchmark in dictionary up to
BENCHMARKING / BENCHMARKS
BENCHMARKING
Ongoing search for best practices that produce superior performance when adapted & implemented in organisation.
BENCHMARKS
Measurements to guage the performance of a function /operation.
Benchmarks
Operating Statistics
Benchmarking
Practices
superstore chain. Look at what everybody else does take the best of it & make it better. Fast learning has competitive advantage. Earlier philosophy - Competitive advantage through superior technology, Lower cost, Patents, Protections, Proprietary products. New Philosophy - Competitive advantage through fast learning. The ability to learn faster than your competitors is the only sustainble competitive advantage.
Learning Employees
FLO train employees quickly & effectively.
competitor. Nine time the no. of production suppliers. Assembly line rejects - ten times worse. Product time to markets - twice as long. Defects per 100 machines - seven times worse. Rapid pace of change Customer requirement - Faster, Cheaper, Better. Old philosophy - If it cant be invented here, it cant be any good.
Produce output
What is benchmark ? Where do we stand ? Could we to better ?
Evaluate how accurately the requirements of the customer have been met.
BENCHMARKING PROCESS
Identify What is to be Benchmarked
Planning
Analysis
Recalibration of BM
Integration
Action
Customer satisfaction 520 Points No other business concept has so much influence. MBNQA - 1988-175 Points - 1989-190 Points World class & role model companies. GTE telephone operations - MBNQA finalist of 1989 Evidence of increasing customer satisfaction Improved system speed Efficiency Declining error rates
All in USA.
1. Leadership 100
3. Strategic Planning 80
Importance of Benchmarking
New way of doing business. External view for correctness of objective setting.
standards.
Removes subjectivity from decision making.
Applied to virtually every function in the company.
Importance of Benchmarking
Business Planning
Company vision Setting of strategic goals Putting together the unit operating plan
Policy Deployment
Helps in finding best practices, which will assist in the achievement of goals Continuous Improvement Customer satisfaction Percentage satisfied Repurchase intention Overall satisfaction Cultural change Focus for improvement is based on external data. Continuous learning Managing by fact Business process improvement
Benchmarking Myths
Benchmarking is copying
Differences in company Adapt to your needs
cultures / resources
Benchmarking is about numbers Numbers help in calibrating performance gap Processes behind results will reveal How those numbers were achieved Competitions will not reveal their winning formula be willing to share processes Bench marking is for reducing resources. It is a programme and not ongoing management process Not a cookbook process - Discovery process New way of doing business
Will
What is process ?
A process is the mechanism by which inputs are converted into outputs.
Inputs include:
Materials, Skills and Procedures, Equipment. Information,
A process transforms these into outputs which also include products, services, materials, procedures, information, skills, etc. but which in some way differ from the inputs. of course, the outputs of all processes are invariably the inputs of other processes.
Definition of Process
A Process is simply a structured, measured set of activities designed to produce a specific output for a particular customer or market. - Thomas Davenport Characteristics: A specific sequencing of work activities across time and place A beginning and an end Clearly defined inputs and outputs Customer - focus How the work is done Process ownership Measurable and meaningful performance
Process
Materials Procedures Methods Information FEEDBACK Products Services
People
Skills Knowledge Training Plant / equipments INPUTS
PROCESS
Business processes or horizonatal processes, which cut through the company and whose final result provides the company with its profit
The first step in any organisation is to draw a flow diagram to show how each component depends on others Then everyone may undersatand what his job is. If people do not see the process, they cannot improve it.
What to Benchmark
Business Goal
To be lowest price producer
Typical Benchmarks
Cost Materials cost per product Labour costs per product Overheads per unit of production Cost of distribution channels Procurement Product differentiators Customer service Product/service functionality Product development time
What to Benchmark
Business Goal
To maintain service at a reduced cost
Typical Benchmarks
Resource utilisation Value added per employee System efficiency. Effectiveness of automation
Product differentiators Volumes of repeat business Levels of customer complaint Delivery performance Complaints procedure
What to Benchmark
Business Goal
To be most innovative producer
Typical Benchmarks
Innovation process Time to market Number of patents per year Investment in training
Product differentiators Set up time Direct to indirect labour cost Efficiencies Procurement Stock levels Supplier relationships
To generate cash
Process
Develop questionnaire
Approch benchmarking partners
1 To accurately interpret the information collected 2 To identify the best prctice performance 3 To maintain confidentiality of participants These are best achieved by taking the raw data and using a combination of spreadsheets and databases to generate graphical results.
Process
Adopt / adapt as best practice Draw up list of Potential Benchmarking partners
Monitor progress
Feedback progress
Review teams benchmarking performance
1 Order entry 2 Service dispatching 3 Warehouse storage Contact a Business Library Request a search of information produced in the last three to five years for yours topic of interest Library will identify articles / sources from. 1 External reports 2 Public magazines 3 Industry journals 4 Annual reports
1 News letters 2 Seminars (Especially speakers / tours) 3 Bibliographies 4 Special libraries. Service Agencies / Bureaus in the business function Ask if they can share anonymous experiences from their client companies. 1 Industry practices or methods 2 State-of-the-art-methods/practices.
maintenance processes
Lot of data available with various plants regarding other licensee plants Benchmarking should become an integral part of itinery of RIL staff. attending technical Seminars / Information exchange meetings
Functional Benchmarking :
Warehousing Procurement
operations operations Catering services Stores services Attendance / Salary systems Training process Contracting process Reduction of paper
Benchmarking
Practical benchmarking :- M. Zain &Paul - Leonard a complete guide Benchmarking for best practices : Bogan & English
Human resources
1 2 3 4 5 6 7 8 9 Educating Training Empowerment Reward Recognition Compensation Recruitment / Selection Job flexibility Various programmes - Quality Circles - Suggestion scheme 10 Performance appraised systems 11 Validation methods 12 Use of Quality improvement tools 13 Catering service 14 Mail distribution service
Human resources
15 Staff turnover 16 Absentism / Sickness 17 Grievances 18 Accident levels 19 Lost time Accidents
Process Management
1 Productivity / Employee 2 Process capability 3 Sampling 4 Process monitoring 5 Raw material / Utility consumption norms. 6 Filures 7 Maintainance practices PM CM Work order sytem Planning Spare Management 8 Failure analysis 9 Field changes 10 Procurement
Supplier Performance
1 Delivery Performance 2 PR / Indent / PO release time / Process. 3 Rejection rates 4 Identification of suppliers
Perception
Low fit
Objective evaluation
High conformance
Without Benchmarking Pursuing pet projects Strengths and weaknesses not understood Route of least resistance
Understanding outputs
Internally focused Concrete understanding of competition Evolutionary change New ideas of proven practices and technology
High commitment Low commitment
Without Benchmarking With Benchmarking INDUSTRY BEST PRACTICES Not invented here Few solutions Average of industry progress Frantic catch up activity
Many options
Business practice breakthrough Superior performance
courier company
through thorough knowledge of your own processes, their strengths, weaknesses and measures, you will be in a better position to ascertain what it is you want (and need) to learn.
Sponsorship
Senior managemant need to be aware and supportive of a benchmarking study. Make the necessary people aware of the time, effort and resources required for a successful study.
Correct team members
Those involved in the visit should be the same people who own the process or work in it. These people will be more likely to identify areas where benchmarking best practices may be adopted.