Designing the Benchmarking Process


Benchmarking is a method of improving business performance by learning from others. The essence of benchmarking lies in the continuous process of comparing a company’s strategies, products and processes with those of world leaders and the best in class organizations in order to learn how they achieve excellence and then setting out to match and even surpass it.

The main emphasis of benchmarking is not on “best performance” but on improving a given business operation or a process by exploiting “best practices”. .Cont’d   So benchmarking can be defined as a process for improving performance by constantly identifying. understanding and adapting best practices and processes followed inside and outside the company and implementing the results.

. Increase the competitiveness of the organization. Encourage regular monitoring of progress for improvement.Advantage of benchmarking       How well are we performing compared to other companies? What are best practices? What improvement opportunities should we focus on? Helping to identify the current position of the business and determine priorities for improving.

Improvements to the best-in-the-class levels in some areas will contribute greatly to market and financial success .Designing The benchmarking process   Benchmarking can be applied to virtually any business or production process. .

Phases in the benchmarking process      Planning Analysis Integration Action Maturity .

This phase questions: involves answering the following ii. v. vi. iii.Planning  i. What is to be benchmarked? Which processes cause the most trouble? Which process contribute most to customer satisfaction and which are not performing up to expectations? What are the competitive pressures impacting the organization the most? What processes or functions have the most potential for differentiating our organization from the competition? To whom or what will we compare? How will the data be collected? . iv.

Positive gap  . Negative gap 2.what would be the resulting improvement ? studies can reveal three different Benchmarking outcomes 1.Analysis     Is there a gap between the organizations performance and that of the best-in-the-class organizations? What is the gap ?how much is it? Why is there gap ?what does the best-in-the-class do differently . Parity gap 3.that is better ? If best –in-the-class practices were adopted .

Integration   Integration is the process of using benchmark findings to set operational targets for change . It involves careful planning to incorporate new practices and to ensure that benchmark findings are incorporated in all formal planning processes. .

Action Action plan for updating the benchmark findings and an ongoing reporting mechanism.  The generic steps for the development and execution of action plans are: a) Specify tasks b) Sequence tasks c) Determine resource needs d) Establish task schedules e) Assign responsibility for each task f) Describe expected results g) Specify methods for monitoring results  .

Benchmarking is a tool for continuous improvement and not to create one permanent improvement. thus ensuring superiority.Maturity   Maturity will be attained when best industry practices are incorporated in all business processes. .

 7. Identify comparative companies. Project future performance levels.  2.Xerox 12-Step Benchmarking Process  Phase 1: Planning  1.  Phase 3: Integration  6. Establish functional goals. Determine data collection method & collect data.  5. . Determine current performance gap. Identify what to benchmark. Communicate finding and gain acceptance.  3.  Phase 2: Analysis  4.

Attain leadership position . Fully integrate practices into processes. 12. Develop action plans. Implement specific actions & monitor progress. .  9. 10.The Xerox 12-Step Benchmarking Process (continued) Phase 4: Action  8. Phase 5: Maturity 11. Recalibrate benchmarks.

Taken help from BSCOS. They compared it’s process with British steel which had profit over one Billion per year. .Benchmarking at JISCO    1n 1996 the company decided to maintain leadership among steel producing countries.

The study focused more on the means of achieving product quality through manufacturing process. .Benchmarks against which JISCO was assessed The study focused on quality of product and quality of service after selling the product.

Activities of team    Defining current performance Establishing benchmark of performance Identifying current constraint to achieve benchmark the  PACE ( Plan and Action for continue excellence) _ Marketing _ Plant performance _ Organization and manpower performance .

Time cost: The member of benchmarking team will be investing time in doing research on finding and analyzing problems. meals.Cost of Benchmarking    Visit cost: It includes hotel rooms. . a token gift and lost labor time. Database cost: Organizations create and maintain a database of best practices and the companies associated with each best practice and keep a track. finding exceptional companies to study. visit and implementation. travel costs.

Benchmarking Dos      Obtain management commitment Obtain resource commitment Follow code of conduct Provide summary reports Be flexible .

Benchmarking Dont’s     Have too broad a scope Proceed without process modeling Use questionnaires for process Have separate implementation team .

not on end results Commitment towards the adoption and implementation of best practices Strict adherence to the benchmarking .Guidelines for successful Benchmarking         Thorough understanding of own processes Emphasis on industry best practices Company or plant visit Selection of appropriate benchmarking partners and techniques Maintain confidentiality of critical information Emphasis on practices and processes.

Has to commit towards continuous improvement. Sometimes result in ignorance of new ideas.Limitations of Benchmarking       Benchmarking is a tough process that needs a lot of commitment It is time consuming and expensive. . to environment then can lead to losses. May be working environment and culture are different in both the companies. If not properly modified acc.

Pitfalls of Benchmarking       Inadequate resources Scope not well defined To many performance measures Inappropriate data collection method Management resistance to change No repeat benchmarking .

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