Benchmarking TQM

Friday 7 April 2023 Xavier Institute of Management, Jabalpur 1

Presented By:

Amarjeet GoraiNeha Albina Ekka


What is Benchmarking?

Benchmarking is the process of

measuring an organization’s 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 company’s targets, strategies and implementation .”


The Essence of Benchmarking

“moving from where we are to where we want to be”


Why Benchmarking?

To Obtain an External Perspective of What Is Possible To Assist in Setting Strategic Targets To Promote Improvements in Performance To Establish a Competitive Edge To Enhance Customer Satisfaction To Reduce Costs To Improve Employee Morale To Achieve Quality Awards To Survive


When Benchmarking?

If the company’s QMS is not properly developed, documented and implemented.

If company’s great strength areas are not measured.

If company’s great weakness areas are not measured.

If company’s great opportunities are not measured.

If customer needs are not assessed and rectified .


Benchmarking in the Context of TQM

TQM 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 .


Levels Of Benchmarking In Competitive Environment

Internal benchmarking - Within one’s 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.


Benchmarking Methodology

Competitive• Industry leaders• Top performers with

similar operatingcharacteristics

Functional• Top performers

regardless of industry• Aggressive innovators

utilizing newtechnology

Internal• Top performers

within company• Top facilities

within company

Best PracticeOverlap


Types Of Benchmarking

Performance 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.


Areas Of Benchmarking

Operational Strategies:

• Inventory management• Inventory control

Supply chain management:

• Warehousing and distribution• Transportation

Marketing management:

• Customer service levels• Purchasing• Billing and collection• Purchasing practices

H.R. Practices:

• Talent Acquisition / Search• Training and Development• Compensation management etc.


Guidelines to Benchmarking

Do not go on a fishing expedition.

Use company people.

Exchange Information.

Legal Concerns.

Confidentiality.


Five Phases Of Benchmarking

Planning: Identify the product, service or process to be benchmarked

Analysis: Determine the gap between the firm’s current performance and that of the firm’s 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.


Benchmarking Process In

Motorola


Decide 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 Strategy


The Seven Step Benchmarking Model

Activity What is included

Step 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


The 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


Factors For Success Of Benchmarking

Benchmarking 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 today’s business market place.


AdvantagesBenchmarking 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.


Disadvantages

The 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.


Conclusion

Now 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.


Thank youand

Have a Nice Day…

Benchmarking TQM

Education

analyze data

continuous

competitive

class companies

benchmark

performance

plans

practices