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Jan 06, 2017
Definition *Benchmarking is the systematic search for best practices, innovative ideas, and highly effective operating procedures.Benchmarking considers the experience of others and uses itIt is the common sense proportion to learn from others what they do right and then imitate it to avoid reinventing the wheel.In 1800s, Francis Lowell, a New England colonist, studied British textile mills and imported many ideas along with improvements he made for American textile mills
Introduction and use:*Benchmarking is an increasingly effective popular tool.It is used extensively both manufacturing and service organizations, including
XeroxAT&TMotorola Ford Toyota
*Bench marking stipulate that quality goals and objectives be based on competitive productsMalcolm Baldridge National Quality Award requires applicants benchmark external organizations
Introduction and use:
Reasons to Benchmark*For achieving business and c0mpetitive objectives; helps in developing strengths and reduce weaknessesFor functions that are critical to the business mission, organizations must continue to INNOVATE as well as IMITATE. Benchmarking enhances innovation by requiring organizations to constantly scan the external environment and to use the information obtained to improve the process.
Reasons to Benchmark*Requires external orientation or competition would catch unawaresTime and cost efficient process involves imitation and adaptation rather than pure invention
Primary weakness : Best-in-Class performance is a moving target because of new technology advancements
*Diagram:What is our Performance level ?How do we do it ?What are others` Performance levels ?How did they get there ?CreativeAdaptation Breakthrough performance
Types of benchmarking: *There are three main types of benchmarking:
Internal Competitive andProcess
Process of benchmarking:*The following six steps contains the core techniques:
Decide what to benchmark Understand current performance Plan Study others Learn from data Use the findings
Decide what to benchmark ?
* Benchmarking can be applied to the any business or production process.
Understanding current performance:
*To compare practices to outside benchmarks, it is first necessary to thoroughly understand and documents the current process of your organization that where you stand.
*Once internal process is understood and documented, it is possible to make decisions about how to conduct the study.The team should be decided that what type of benchmarking to be preformed.
Benchmarking planning is a learning process.
*Benchmarking studies look for two types of information:
A description of how best in class processes are practices and the measurable results of these practices
Learn from the data:
*Learning from the data collected in a benchmarking study involves answering a series of questions:
Is there a gap between the organizations performance and the performance of the best-in-class organizations ?What is the gap ? How much is it ?Why is there a gap ? What does the best-in-class do differently that is better ?If best-in-class practices were adopted, what would be the resulting improvement ?
*Its main objective is to determine from overall effect on the internal operation of adapting the best-in-class practice.
In other words, what is the size of the gap and what are the appropriate benchmark metrics and objectives ?
Using the findings:
*Benchmarking is the waste of time if change does not occurs as a result. To effect the change, the findings must be communicated to the people within the organization who can enable improvement. The findings must be translated to GOALS and OBJECTIVES and ACTION PLANS must be developed to implement new process.
*The generic steps for the development and execution of action plans are:
Specify tasks Sequence tasks Determine resource needs Establish task schedule Assign responsibility for each task Describe expected results Specify methods for monitoring results.Using the findings:
*Goals and objectives should be consistent with the execution of the action plan so that the end result is process superiority. The best results are obtained when process owners fully participate in the design and execution of the plan.Using the findings:
Pitfalls and Criticisms of Benchmarking*Not a strategy nor a management philosophy, but an improvement toolTo be effective, it must be used properlyNot a substitute for innovationSuccess depends on setting and achieving goals and objectives based on external reality caring about quality, cost and delivery