Benchmarking ppt

INTERNATIONAL INSTITUTE OF BUSINESS STUDIES

A PRESENTATION ON BENCHMARKING PRESENTED BY Vivek Sinha

Definition of Benchmarking:- Benchmarking is a process for improving

performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results.

Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice

Benchmarking plays an important role in business. There are lot of competitors for one service/ one product in this world, Benchmarking is the only way to determine, who is performing well, on what areas the business should improve, benchmarking is the only way to determine it.

To find who is the best in that particular industry, what is the cost, their service  will be known in other business circle.

Help companies/organisation to find out their positives and negative points of their product/services compared to your competitor.

When you try to benchmark you will  need to research to get the proper findings of it, when you do that you will know what is to be done and what not to be done.

Complete evaluation of your business process helps to find ways to  cut the costs of the business.

Finding  out the areas of  scope of improvement , comparative study  helps to achieve your company goals faster by realizing  what to do and what not to do ?

Identify your problem areas Identify other industries that have similar

processes Identify organizations that are leaders in these

areas Survey companies for measures and practices Visit the "best practice" companies to identify

leading edge practices Implement new and improved business

practices  

Financial Benchmarking

Performance Benchmarking

Product Benchmarking

Functional Benchmarking

Strategic Benchmarking

Thorough understanding of one's own processes Emphasis on industry best practices. Company or plant visits Selection of appropriate benchmarking

techniques Involvement of management and employees in

the analysis of best practices Emphasis on practices and processes, not on end

results. Benchmarking should be a continuous process as

the competition is always changing. Commitment towards adaptation and

implementation of best practices.

Case Study Background 'Xerox' trademark in 1948

Xerox was listed on the New York Stock Exchange in 1961 and on the Chicago Stock Exchange in 1990.

Revenues soared from $37 million in 1960 to $268 million in 1965.

Xerox acquired a majority stake in various company’s Rank Xerox in 1969 Setup R&D facility in 1969

Profits increased five-fold from $ 83 million in 1966 to $ 407 million in 1977

Competition In the early 1980s, Xerox found itself increasingly vulnerable to intense competition from both the US and Japanese competitors.

According to analysts, Xerox's management failed to give the company strategic direction.

It ignored new entrants (Ricoh, Canon, and Sevin)

The company's operating cost (and therefore, the prices of its products) was high and its products were of relatively inferior quality in comparison to its competitors.

Return on assets fell to less than 8% and market share in copiers came down sharply from 86% in 1974 to just 17% in 1984.

Between 1980 and 1984, Xerox's profits decreased from $ 1.15 billion to $ 290 million

Average manufacturing cost of copiers in Japanese companies was 40-50% of that of Xerox

Benchmarking against Japanese competitors, Xerox found out that it took twice as long as its Japanese competitors to bring a product to market, five times the number of engineers, four times the number of design changes, and three times the design costs.

Japanese could produce, ship, and sell units for about the same amount that it cost Xerox just to manufacture them Xerox's products had over 30,000 defective parts per million - about 30 times more than its competitors.

Benchmarking also revealed that Xerox would need an 18% annual productivity growth rate for five consecutive years to catch up with the Japanese.

SUPPLIER MANAGEMENT SYSTEM

INVENTORY MANAGEMENT

MANUFACTURING SYSTEM

MARKETING

QUALITY

Highly satisfied customers for its copier/duplicator and printing systems increased by 38% and 39% respectively.

Customer complaints to the president's office declined by more than 60%.

Customer satisfaction with Xerox's sales processes improved by 40%, service processes by 18% and administrative processes by 21%.

Overall customer satisfaction was rated at more than 90% in 1991

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