Benchmarking

Objectives of Benchmarking

Benchmarking accelerates the rate of change.
Identifies breakthrough processes.
Results in customer satisfaction and competitive advantage.
Creates a fact-based climate for generating consensus.

Definitions

Benchmarking is the process of identifying, understanding and adapting outstanding practices from organizations anywhere in the world to help your organization improve its performance. (Why reinvent the wheel?).
Benchmarking is the practice of being humble enough to admit that someone else is better at something and wise enough to try and learn how to match and even surpass them at it.

Benchmarking was initially made popular by Robery C Camp.

Benchmarking Is Not....

Only competitive analysis.
Number crunching.
Site briefings and industrial tourism.
Just “copying” or “catch-up”.
Spying or espionage.
Quick and easy.

What Should Companies Benchmark?

Areas of strategic importance.
Significant to quality, service, cost or lead time/cycle time.
High potential for success.
Critical success factors (CSFs) for the organization.

Some Illustrative Examples of What Is Being Benchmarked (Not in any order)

Distribution leadership
Order fulfillment process
Supplier/procurement process
Process redesign
Dealer/franchise communicating
Diversity in hiring
Telephone answering centers
Employee referral programs
HR management alignment
Hoteling/shared office space
Early product development process
Wholesale/retail marketing
International sales
Third party repair
Printed wire assemblies
Corporate training/validating
Product planning process
Sales commission process
Direct line delivery/logistics
Cost reduction
Order management process
Suppliers claims process
Process re-design
Strategic alliances
Customer service/hi-tech
Closing the books
Patent management
Communications best practices
Preventive maintenance processes

Benchmarking Four Phase Model

Plan
Collect data
Analyze
Adapt and improve

Planning Phase

Organize the study (select process, team)
Collect internal data (flow charts and measures)
Perform secondary research
Identify benchmarking partners (best in class)
Data collection planning (format, due dates, check and balance system)

Collection Phase

Prepare and administer questions (survey and telephone)
Develop database to tabulate responses
Data validation plan for comparability
Conduct site visits if needed

Analysis Phase

Identify gaps
Analyze performance and practice data
Identify best practices, methods and enablers
Identify enablers in each of the study areas

Adapt and Improve

Secure management support
Establish long and short term improvement goals
Formulate and obtain approval for action plan
Track progress of action team
Adapt changes, update measurement process, then, as appropriate, recycle the benchmark

Process of Implementation

Decide strategic and tactical improvement.
Identify what you want to benchmark.
Assess your readiness to benchmark.
Select teams, owners and champions.
Identify appropriate industry leaders in similar or different industries.
Conduct benchmarking.
Project future performance levels.
Report benchmark findings and gain organization acceptance.
Prepare the organization to take advantages of benchmarking results.
Establish definitive functional goals.
Develop action plans for implementation.
Activate action plans and monitor progress.
Recalibrate benchmarks.
Attain leadership position.
Integrate processes into company system and continuously improve.

Types of Benchmarking

Internal benchmarking (Example: Best scheduling practice at HP)
Competitive benchmarking (Example: Team Taurus: Ford Motor Company)
Functional benchmarking (Example: General Motor’s cross-industry study)
Generic benchmarking (Example: Xerox study)

Benchmarking Myths

Benchmark targets should be established first and practices investigated later
There is only one way to benchmark: against direct product competitors
Benchmarks are only quantitative, financially based statistics
Benchmarking investigations are focused solely on operations showing a performance gap
Benchmarking is something that needs to be done occasionally and can be accomplished quickly
There is a single company somewhere, most like our firm, only much better, that is the “benchmark”.
Staff organization cannot be benchmarked
Benchmarking is a target-setting stretch exercise
Benchmarking can most effectively be accomplished through third party consultants
It is difficult to decide what to benchmark for each business unit
Processes don't need to be benchmarked
Internal benchmarking between departments and divisions has only minimal benefits
There is no benefit in qualitative benchmarking
Benchmarking is comparing our firm to the dominant industry firm and emulating them six months later

For More Guidance, Assistance, Training and Consultation

Contact: prodcons@prodcons.com

Training on "Benchmarking" is imparted by Prodcons Group's Mr Shyam Bhatawdekar and/or Dr (Mrs) Kalpana Bhatawdekar, the renowned management educationists and consultants with distinction of having trained over 150,000 people from around 250 organizations. Implementation is also facilitated by the team of Prodcons Group.

Also refer: (Prodcons Group) http://prodcons-group.blogspot.com/, (Training Programs by Prodcons Group) http://training-development-function.blogspot.com/, (Productivity Consultants) http://productivity-consultants.blogspot.com/

Other Topics of Interest

All Management Topics (General Management, Marketing and Sales, Service, Operations/Manufacturing, Quality, Maintenance, Human Resources, Finance and Accounts, Information Technology, Life Management)

The topics are listed in alphabetic order: