Slide 1
Friday, 03 July 2015Xavier Institute of Management, Jabalpur1What is Benchmarking?Benchmarking is the process of measuring an organizations internal processes then identifying, understanding, and adapting outstanding practices from other organizations considered to be best-in-class.
Definition measuring our performance against that of best-in- class companies, determining how the best-in-class achieve those performance levels and using the information as a basis for our own companys targets, strategies and implementation .
Friday, 03 July 2015Xavier Institute of Management, Jabalpur2The Essence of Benchmarkingmoving from where we are to where we want to beFriday, 03 July 2015Xavier Institute of Management, Jabalpur3Why Benchmarking?To Obtain an External Perspective of What Is PossibleTo Assist in Setting Strategic TargetsTo Promote Improvements in PerformanceTo Establish a Competitive EdgeTo Enhance Customer SatisfactionTo Reduce CostsTo Improve Employee MoraleTo Achieve Quality AwardsTo Survive
Friday, 03 July 2015Xavier Institute of Management, Jabalpur4When Benchmarking?If the companys QMS is not properly developed, documented and implemented.
If companys great strength areas are not measured.
If companys great weakness areas are not measured.
If companys great opportunities are not measured.
If customer needs are not assessed and rectified .
Friday, 03 July 2015Xavier Institute of Management, Jabalpur5Benchmarking in the Context of TQMTQM Key principles include:
Comparisons with best practice.
A Strong emphasis on meeting the needs of the customer (internal and external).
The importance of efficient, effective business processes.
The need for continuous improvement .
Enhances a TQM program .
Friday, 03 July 2015Xavier Institute of Management, Jabalpur6Levels Of Benchmarking In Competitive EnvironmentInternal benchmarking - Within ones org.
Competitive benchmarking - Analysis the performance and practices of best in class companies.
Non-competitive benchmarking - Is learning something about a process a company wants to improve by benchmarking.
World class benchmarking - Ambitious and looking towards recognized leader.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur7Benchmarking MethodologyCompetitiveIndustry leadersTop performers withsimilar operatingcharacteristicsFunctionalTop performersregardless of industryAggressive innovatorsutilizing newtechnologyInternalTop performers within companyTop facilities within companyBest PracticeOverlapFriday, 03 July 2015Xavier Institute of Management, Jabalpur8Types Of BenchmarkingPerformance or operational benchmarking: It involves pricing, technical quality, features and other quality.
Process or functional benchmarking: It involves processes such as billing, order entry or employee training.
Strategic benchmarking: Examines how companies compute and seeks the winning strategies that have led to competitive advantage and market success.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur9Areas Of BenchmarkingOperational Strategies:
Inventory management Inventory controlSupply chain management:
Warehousing and distribution TransportationMarketing management:
Customer service levels Purchasing Billing and collection Purchasing practicesH.R. Practices:
Talent Acquisition / Search Training and Development Compensation management etc.Friday, 03 July 2015Xavier Institute of Management, Jabalpur10Guidelines to BenchmarkingDo not go on a fishing expedition.
Use company people.
Exchange Information.
Legal Concerns.
Confidentiality.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur11Five Phases Of BenchmarkingPlanning: Identify the product, service or process to be benchmarked
Analysis: Determine the gap between the firms current performance and that of the firms benchmarked and identify the causes of significant gaps.
Integration: Establish goals and obtain the support of managers who must provide the resources for accomplishing the goals
Action: Develop action plans, and team assignment, implement the plans, monitor progress and recalibrate benchmark as improvements are made.
Maturity: Leadership position attended, best practices fully integrated into process.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur12Benchmarking Process InMotorola Friday, 03 July 2015Xavier Institute of Management, Jabalpur13Decide what to benchmark.
Select companies to benchmark.
Obtain data and collect information.
Analyze data and forms action plans.
Recalibrate and start the process again. Benchmarking StrategyFriday, 03 July 2015Xavier Institute of Management, Jabalpur14The Seven Step Benchmarking Model ActivityWhat is includedStep 1: Identify what to benchmark Clarify the benchmark objectives Decide whom to involve Define the process Consider the scope Set the boundariesAgree on what happens in the process Flowchart the process
Step 2: Determine what to measure Examine the flow chart Establishes the process measures Verify that measures match objectives
Step 3: Identify who to benchmark Conduct general research Choose level to benchmark Friday, 03 July 2015Xavier Institute of Management, Jabalpur15The Seven Step Benchmarking Model Step 4: Collect data Use a questionnaire Conduct a benchmark site visit
Step 5: Analyze data and determine the gap Quantitative data Qualitative analysis
Step 6: Set goals and develop an Action Plan Set performance goals Develop an action plan
Step 7: Monitor the process Track the changes Make benchmarking a habit
Friday, 03 July 2015Xavier Institute of Management, Jabalpur16Factors For Success Of BenchmarkingBenchmarking must have the full support of senior management and they should actively involve with this process.
For Benchmarking, team and process training is very imp.
Benchmarking should be a team activity.
Benchmarking is an ongoing process.
Benchmarking efforts must be organized, planned, and carefully managed.
Correct use of benchmarking can lead you to the competitive edge in todays business market place.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur17AdvantagesBenchmarking is a systematic method by which organizations can measure themselves against the best Industry practices.
It promotes superior performance by providing an organized framework through which organization learn how the best in class do things.
Intensive studies of existing practices often lead to identification of non-value added activities and plans for process improvement.
It helps for continuous improvement.
Benchmarking inspire managers (and organization) to compete.
Through Benchmark process organization can borrow ideas, adopt and refine them to gain competitive advantages.
Benchmarking provides a basis for training human resources.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur18DisadvantagesThe most resistant criticism of Benchmarking comes from the idea of copying others.
It is not a strategy nor is it intended to be a business philosophy. Therefore, it is a time taking technique.
Benchmarking is not instant pudding. It will not improve performance if proper infrastructure of Total Quality Management is not in place.
Friday, 03 July 2015Xavier Institute of Management, Jabalpur19ConclusionNow a days, more than 60% companies in the world uses this technique for fixing their target for continuous improvement. For them it is an important tool. But to be effective it must be used properly. It breaks down (waste money, time and energy and some times morale too) if process owners and managers feel threatened or do not accept and act on the findings. Finally, benchmarking is not a substitute for innovation; however, it is a source of ideas from outside the organization.Friday, 03 July 2015Xavier Institute of Management, Jabalpur20Thank youandHave a Nice Day
