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Benchmarking

Benchmarking

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Published by Abing Sembrano

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Published by: Abing Sembrano on Mar 24, 2011
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03/24/2011

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"Would you please tell me which way I ought to go from here?" asked Alice. "That depends a good deal on where you want to get to." "I really don't know," replied Alice. "Then it doesn't matter which way you go," said the cat.

What is BENCHMARKING What is our performance level? How do we do it? What are others· performance levels? How did they get there? Creative adaptation BREAKTHROUGH PERFORMANCE .

.€ is a systematic tool that allows a company to determine whether its performance of organizational processes and activities represent the best practices.

€ a process of continuously measuring and comparing an organization·s business processes against process leaders anywhere in the world to gain information which will help the organization to take action to improve its performance. .

productivity and efficiency € cost-effective and time-efficient € Professionalizing the organization / processes € .understand where they have strengths and weaknesses € level(s) of performance is really possible € promotes changes and delivers improvements in quality.

. Zairi (1992) and Watson (1993) defined it as ´performance comparison of units or departments within one organizationµ.€ Internal benchmarking ¾ Camp (1989).

€ Competitive benchmarking ¾ process of comparing a firm's practices and performance measures with that of its most successful competitor(s). .

Camp (1989) defines it as specific function comparison with best practice while Zairi (1992) defines it as comparison of specific function with best in industry and best in class.€ Functional benchmarking ¾ (Lerna and Price. Watson (1993) defines it as a comparison of particular business functions at two or more organizations. . 1995).

€ Generic benchmarking ¾ investigates activities that are or can be used in most businesses. . This type of benchmarking makes the broadest use of data collection.

It is a brainstorming session among organizations .€ Collaborative benchmarking ¾ information flows many ways. With collaborative benchmarking. information is shared between groups of firms.

.

HOW will the data be collected? There·s no one way to conduct benchmarking investigations. To WHOM or what will we compare? Business-to-business. a service or a report. Benchmarking must be conducted against the best companies and business functions regardless of where they exist. an order. who and how WHAT is to be benchmarked? Every function of an organization has or delivers a ´productµ or output. a shipment. whether it·s a physical good. But they are not the only targets. it·s the process of investigating and documenting the best industry practices. Benchmarking is appropriate for any output of a process or function. There·s an infinite variety of ways to obtain required data ² and most of the data you·ll need are readily and publicly available. . Recognize that benchmarking is a process not only of deriving quantifiable goals and targets. direct competitors are certainly prime candidates to benchmark. an invoice.€ Planning . but more importantly. which can help you achieve goals and targets.what.

The analysis phase must involve a careful understanding of your current process and practices.What best practices are being used now or can be anticipated? -.Why are they better? By how much? -.€ Analysis . ASK -. as well as those of the organizations being benchmarked.Is this other organization better than we are? -. What is desired is an understanding of internal performance on which to assess strengths and weaknesses.How can their practices be incorporated or adapted for use in our organization? .

STEPS INCLUDE .€ Integration . It involves careful planning to incorporate new practices in the operation and to ensure benchmark findings are incorporated in all formal planning processes.Communicate findings to all organizational levels to obtain support. -. -.Integration is the process of using benchmark findings to set operational targets for change.Develop action plans. commitment and ownership.Gain operational and management acceptance of benchmark findings. -. Clearly and convincingly demonstrate findings as correct and based on substantive data.

Use the creative talents of the people who actually perform work tasks to determine how the findings can be incorporated into the work processes.Convert benchmark findings.Any plan for change also should contain milestones for updating the benchmark findings. .€ Action . Progress toward benchmark findings must be reported to all employees. . to specific actions to be taken. Put in place a periodic measurement and assessment of achievement. and an ongoing reporting mechanism. and operational principles based on them.

Maturity will be reached when best industry practices are incorporated in all business processes. .€ Maturity .Do other organizations benchmark your internal operations? . TEST FOR SUPERIORITY -. essential and self-initiated facet of the management process. Benchmarking becomes institutionalized and is done at all appropriate levels of the organization. thus ensuring superiority. would a knowledgeable businessperson prefer it? -. not by specialists.If the now-changed process were to be made available to others.Maturity also is achieved when benchmarking becomes an ongoing.

time constraints € competitive barriers € cost € lack of both management commitment and professional human resources € .

. Boulter and Kelly. € Time-consuming and expensive. 1993). € € (Bendell.resistance to change € poor € planning and short-term expectation € Benchmarking is a tough process that needs a lot of commitment to succeed.

More than once benchmarking projects end with the 'they are different from us' syndrome or competitive sensitivity prevents the free flow of information that is necessary.. € Comparing performances and processes with 'best in class' is important and should ideally be done on a continuous basis (the competition is improving its processes also. € ..).

culture? € What are the downsides of adopting a practice? € .Is the success of the target company really attributable to the practice that is benchmarked? Are the companies comparable in strategy. model. size.

and lost labour time. meals.€ Visit costs . .This includes hotel rooms. a token gift. travel costs.

.€ Time costs . visits. This will take them away from their regular tasks for part of each day so additional staff might be required.Members of the benchmarking team will be investing time in researching problems. and implementation. finding exceptional companies to study.

.€ Benchmarking database costs Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice.

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