BUSINESS PROCESS BENCHMARKING

Benchmarking – is a process of comparison of two or more products, services,

processes or organizational practice. Business process benchmarking is comparing a
business process with the best process in that area. The measurement and comparison
of performance of processes is known as Business Process Benchmarking (BPB).

TRIGGERS FOR BENCHMARKING

Two categories of benchmarking based on what triggers it:

a. Problem based benchmarking

b. Process based benchmarking

Problem Based Benchmarking

The problem based benchmarking arises out of a problem in the organization.

The triggers for benchmarking in this category comes out of a problem that is faced by
the organization. Hence, it is called problem based benchmarking. Some of the triggers
that could motivate the organization to carry out benchmarking are:

 Adverse feedback from customer

 Increasing quality cost
 Alarming error rates
 Increase in cycle time

Process Based Benchmarking

It is initiated as a part of process improvement strategy of the organization. Such a

benchmarking arises out of the following:

 Defined mission
 Defined objectives
 Defined priorities
BENCHMARKING IS NOT COMPARISON ALONE

The performance of benchmarking is not only to measure the current level of

performance of the process or the product or service, but also to improve to the level of
the competitors or the market leaders or to the level indicated in the mission statement.
Therefore, benchmarking helps an organization to measure the attributes of current
operations, practices and identify pitfalls.

TYPES OF BENCHMARKING

Three types of benchmarking:

1. Internal
2. Competitive
3. Functional

Internal Benchmarking – There may be a number of teams or divisions within an

organization. Although each division may be manufacturing different products, some
common performance measures may hold good for all of them. Therefore, the
organization need not always look outside to find out the best practices.

Internal benchmarking involves comparing and analyzing performance metrics,

practices, and processes within different departments or divisions of the same
organization.

Competitive Benchmarking – The second type of benchmarking is to improve the

performance to the level of the competitors. The competitor’s performance data is
collected from published data.

Competitive benchmarking involves comparing an organization's performance

and practices with those of its direct competitors in the industry. It aims to identify the
strengths and weaknesses of the organization relative to its competitors

Functional benchmarking is a process that involves comparing the performance and

practices of an organization or system with those of other organizations or systems in
similar functional areas. It aims to identify best practices and areas for improvement by
studying the processes, operations, and outcomes of leading companies or
organizations in the same industry or sector.

REASONS FOR BENCHMARKING

Benchmarking is carried out to bring out clearly and objectively the real status with
regard to the performance of the organization as well as the processes. After
ascertaining the real position, the processes can be improved to the level of the best, so
that the organization performs better than even before. Benchmarking is a way to
improve their performance. Hence, benchmarking has to be carried out periodically so
as to maintain the leadership position.

IDENTIFYING PROCESS TO BENCHMARK

Every process in an organization has inputs and outputs. The inputs are what are
supplied to the process. The processes are a repeatable sequence of events and the
output is what is delivered. To carry out benchmarking, one has to measure the
characteristics of the output.

Steps Involved

The following steps are involved in identifying what to benchmark:

 Select Processes
 Determine Vital measure
 Prioritize processes and measure
1. Select Processes: Identify the key processes within your organization that are
critical to its success or have the potential for improvement.
2. Determine Vital Measures: Determine the vital measures or performance metrics
that are most relevant to evaluate the effectiveness and efficiency of the selected
processes.
3. Prioritize Processes and Measures: Prioritize the selected processes and
measures based on their significance and potential impact on your organization.
This prioritization will help focus your benchmarking efforts on the most critical
areas and allocate resources effectively.
BENCHMARKING PARTNER

Benchmarking essentially improves the processes in the organization to the level

of the best. Therefore, the next important question is who should be the role model who
could be imitated or benchmarked with. The organization chosen as a role model is
called a benchmarking partner.

BENCHMARKING PROCESS

Selection of a Process Improvement Team

Prepare a Project Description

Identification of Benchmarking Partners

Adopt a suitable Benchmarking Process Model

Carry out a Benchmarking

1. Selection of a Process Improvement Team: Form a team responsible for leading

the benchmarking efforts. This team should include individuals with knowledge
and expertise in the process being benchmarked, as well as representatives from
relevant departments or functions within the organization.
2. Prepare a Project Description: This project description will serve as a guide
throughout the benchmarking process and ensure that everyone involved is
aligned on the goals and expectations.
3. Identification of Benchmarking Partners: Identify potential benchmarking partners
that excel in the area or process you want to benchmark. This could involve
 conducting research, networking, or reaching out to industry associations or
experts to identify suitable organizations for comparison.
4. Adopt a Suitable Benchmarking Process Model: Select a benchmarking process
model that best fits your organization's needs and resources. A number of
models are available for carrying out benchmarking. An organization should
adopt a suitable model.
5. Carry out Benchmarking: Finally, after accomplishing the processes stated above
and after you Adopt a Suitable Benchmarking Process Model, you can now carry
out benchmarking.

REASONS FOR FAILURE OF BENCHMARKING

There are a number of reasons why benchmarking efforts fail. Some of them are:

1. Lack of Commitment

2. Wrong Selection of Processes

3. Not Being Cost Effective

4. Wrong Selection of Team Members

5. Under Estimating the Time Required

6. Not Positioning the Benchmarking within a Larger Strategy

7. Lack of Involvement of Management

 RECOGNITION AND COMMUNICATION

In the context of business process benchmarking, recognition and communication play

important roles in ensuring the success and effectiveness of the benchmarking efforts.
Here's an explanation of these two aspects:

Recognition

Recognition refers to acknowledging and appreciating the efforts and achievements of

individuals or teams involved in the benchmarking process. It is essential to recognize
the contributions and successes of employees who actively participate in benchmarking
activities, whether they are part of the benchmarking team or provide valuable input and
support.

Communication

Effective communication is crucial throughout the benchmarking process. Clear and

transparent communication ensures that all stakeholders, including management,
employees, and benchmarking partners, are well-informed and engaged in the process.

Communication should cover various aspects, including the purpose and objectives of
benchmarking, the selection of processes and partners, the progress and findings of
benchmarking activities, and the action plans based on the benchmarking results. It is
important to communicate expectations, timelines, and responsibilities to ensure
alignment and understanding among all involved parties.
History
Nike, Inc. was founded on January 25, 1964, by Bill Bowerman and Phil Knight as Blue
Ribbon Sports (BRS). Initially serving as a distributor for the Japanese shoe brand
Onitsuka Tiger (now ASICS), the company started designing and manufacturing its own
footwear in 1971. The company officially changed its name to Nike, Inc. in 1978.
Nike quickly gained prominence through innovative marketing strategies and successful
athlete endorsements. The brand expanded its product range to include apparel,
equipment, and accessories, becoming one of the leading sportswear companies
globally.
Nike's product quality testing includes:
1. Wear Testing: Nike conducts extensive wear testing by having athletes and
consumers use their products in real-world conditions. This helps assess
performance, fit, and durability.
2. Material Testing: Materials used in Nike products undergo comprehensive testing
to evaluate strength, flexibility, breathability, moisture management, and other
properties. This ensures that the materials can withstand the demands of sports
and physical activities.
3. Performance Testing: Nike assesses the performance aspects of its products,
such as footwear cushioning, traction, stability, and support, to ensure they
enhance athletic performance and meet the specific needs of different sports.
4. Safety Testing: Nike adheres to safety regulations and conducts tests to ensure
their products meet safety standards. This includes evaluating factors like
chemical composition, flammability, and product construction to ensure
consumer safety.
HISTORY
Adidas is a renowned multinational corporation specializing in athletic footwear, apparel,
and accessories. Adidas, founded in 1949 by Adolf Dassler, is a global sportswear
brand specializing in athletic footwear, apparel, and accessories. The company gained
recognition through partnerships with athletes and introduced notable innovations in
footwear. Adidas has a strong focus on design, performance, and originality. It acquired
Reebok in 2005 and emphasizes sustainability in its operations. Today, Adidas is a
prominent player in the sportswear industry, known for its iconic products and global
presence.
Adidas's product quality testing:

1. Performance Testing: Adidas subjects its products, especially footwear, to

thorough performance testing. This involves evaluating factors like cushioning,
traction, stability, flexibility, and support to ensure optimal performance during
athletic activities.
2. Material Testing: Adidas tests the materials used in their products for durability,
breathability, moisture management, and other performance-related
characteristics. This helps ensure that the materials can withstand the demands
of sports and provide comfort to athletes.
3. Fit Testing: Fit is crucial for athletic footwear and apparel. Adidas conducts fit
testing to ensure their products provide a comfortable and secure fit for different
body types and activities.
4. Wear Testing: Similar to Nike, Adidas also conducts wear testing by having
athletes and consumers use their products in real-world conditions. This helps
assess performance, comfort, and durability over time.
5. Safety and Compliance: Adidas adheres to safety regulations and conducts
testing to ensure their products meet applicable safety standards. This includes
evaluating factors like product construction, chemical composition, and potential
hazards.
HISTORY
World Balance is a Filipino brand that has been offering footwear and sportswear since
1980. World Balance was founded in 1980 by Jimmy Thai, a Filipino entrepreneur. The
brand initially focused on manufacturing and selling rubber shoes, catering to the local
market in the Philippines. Over the years, World Balance expanded its product range to
include sports apparel, accessories, and lifestyle footwear, targeting consumers seeking
affordable and quality options. World Balance has established a strong presence in the
Philippines, offering a variety of footwear and apparel options for sports and everyday
wear.
World Balance Product Quality Testing:

 Materials: World Balance uses a variety of materials, such as leather, synthetic

fabrics, and rubber. The quality of these materials is assessed based on their
durability, flexibility, and resistance to wear and tear.
 Construction: The construction of World Balance footwear involves stitching,
adhesives, and reinforcements. Inspecting the stitching for strength and
consistency, as well as checking the adhesion of components, can indicate the
overall build quality.
 Durability: Testing the durability of World Balance products involves subjecting
them to various conditions, such as repetitive bending, twisting, and impact. This
helps determine if the footwear can withstand regular use without significant wear
or damage.
 Comfort: Testing involve wearing the footwear for extended periods and
assessing comfort levels, particularly in areas like the insole, midsole, and upper.
 Design: World Balance focuses on both style and functionality in its designs.
Evaluating the design involves considering aspects like aesthetics, versatility,
and the integration of features like traction patterns and support systems.