CHAPTER 13: BENCHMARKING

CHAPTER 13:      BENCHMARKING

 

INTRODUCTION                                                           

·         The process of continuously measuring and comparing one’s business performance against comparable processes in leading organizations to obtain information that will help the organization identify and implement improvement

·         The continuous process of measuring our products, services and business practices against the toughest competitors and those companies recognized as industry leaders

WHY SHOULD AN ORGANIZATION ENGAGE IN BENCHMARKING?

·         The simple answer is to remain competitive

·         The process of institutionalizing benchmarking leads to the organization having a better understanding of its competitive environment and its customers need

REASONS FOR BENCHMARKING

Objective	Without Benchmarking	With Benchmarking
Becoming competitive	Internally focused Evolutionary change	Understanding of competitive Ideas from proven practices
Industry best practices	Few solutions Frantic catch-up activity	Many options Superior performance
Defining customer requirement	Based on history or gut feeling Perception	Market reality Objective evaluation
Establish effective goals & objectives	Lacking external focus Reactive Pursuing pet projects	Credible, unarguable Proactive Solving real problem
Developing true measures of productivity	Strengths and weakness Routes of least resistance	Understanding outputs Based on industry best practices

 

HOW TO CONDUCT A BENCHMARKING EXERCISE

·         This section will describe a framework for conducting a benchmarking project

·         Given the diversity of organization and processes, it will not be possible to go into great detail

·         The Japanese are credited with starting the benchmarking approach to continuous improvement

·         At a very simple level , employees are seconded to other companies in order companies in order that they may learn new ways of working

·         This practice is called Shukko

XEROX APPROACH TO BENCMARKING

The Xerox approach to benchmarking is as follows:

·         Planning

·         Analysis

·         Integration

·         Action

·         Maturity

ALCOA APPROACH TO BENCHMARKING

The Alcoa approach to benchmarking is as follow:

·         Decide what to benchmarking

·         Plan the benchmarking

·         Understanding own performance

·         Study others

·         Learn from the data

·         Use the findings