Dr.K.

Baranidharan

Present by

RECOGNITION/REWARD/ PERFORMANCE APPRAISAL Presented by

Dr.K.Baranidharan

ECE

BENCH MARKING

 The word benchmark is a reference or measurement standard used for comparison. Benchmarking is the process of determining who is very best, who sets the standard, and what that standard is. Benchmarking is a systematic method by which organisations can measure themselves against the best industry practices.

 Measuring an organisations performance against that of best-in-class companies, determining how the best-in-class achieved those performance level. It is a tools for continuous improvement. The process of identifying, understanding, and adapting outstanding practices and processes from organisations anywhere in the world to an organisation to improve its performance.American Productivity and Quality Centre (APQC)

Benchmarking is the search for industry best practices that lead to superior performance by Robert Camp

Benchmarking
Valuable TQM tool which accomplishes objectives of customer satisfaction and continuous improvement. Motivates an organization & fosters a new in-depth understanding about the functioning of the organization. Reduces cycle time as small or big tasks get done faster. Constantly redefines standards which must be achieved to remain competitive. Increases productivity.

OBJECTIVE
To determine what and improvements are called for where

To analyze how other organizations achieve their high performance levels, and To use this information to improve performance.

Purpose of Benchmarking
Comparing an organizations performance to the best organizations performance Comparing an organizations business process with similar process Comparing product and services Identify the best practices to implement Projecting trends

The Evolution of Benchmarking

Evolved in the early 1950s, when W. Edward Deming taught the Japanese the idea of quality control. Example Toyota Motor Corporations following the footsteps of Ford Motor Corporation with the adaptation of the Fords Just-in-case System into Toyotas Just-in-Time System.

Term Benchmarking emerged in 1980s by ROBERT CAMP, logistics engineer who initiated Xeroxs benchmarking program. Use of benchmarking worldwide continues to grow since Robert Camp wrote the first book on benchmarking in 1989.

Benchmarking Process Model

Adapt Analyze

Plan Search

Observe

Steps in Bench Marking Process

1. Plan

Select the process

Form Team
Understand & document process

Establish performance measure

2.

Search

Listing Criteria for partner selection Conduct general / secondary research Decide the level to Benchmark

Identify potential partners & contact

3. Observe Questionnaire sent to partner Telephone contact Direct observation / site visit

4. Analyze

Sort information & data

Quality control information & data Normalize data if necessary

Identify gaps in performance Level

Identify causes for gaps

5. Adapt
Identify opportunities improvement

Set target for improvement Develop implementation plan, monitor the progress Write final report

AREAS TO BENCHMARK
Customer service levels Inventory management Inventory control Purchasing Billing and collection Purchasing practices Quality process Warehousing and distribution Transportation

Types Of Benchmarking
Internal External Performance or Competitive Functional Generic Strategic Process

Internal Benchmarking
Comparison of similar functions in different operating units within the organization Example

Tata Steels Colliery divisions benchmarking their maintenance practices with that of the Maintenance division inside the Steel Works at Jamshedpur.

External Benchmarking

Comparison of organization functions and key processes against external good practice organization.

Performance or Competitive
Organizations using performance measures to compare themselves against similar organizations Example FMCGs comparing with each other for Market share, Retention rates, profits, costs.

Functional Benchmarking
Comparison of similar functions against external best in any industry Example

Hindustan Max GB Ltd , a pharmaceutical company, benchmarking their maintenance function with that of Tata Steel.

Generic Benchmarking
Comparison of functions which are generic in nature in any industry
Examples Hospital in the U.S. routinely benchmark their patient management against hotels guest management. Airlines benchmark their service with 5 star hotels. customers

Strategic Benchmarking
Used where organizations seek to improve their overall performance by focusing on specific strategies or processes Example Benchmarking against organizations which have won awards or some other distinctions

Process Benchmarking
Focus on specific operations or processes Examples In higher education - Enquiry Management, Enrolment In Logistics - Delivery, Safety. In hotels - Housekeeping, Customer Care.

Issues in Benchmarking
Finding suitable partners. Difficulties in comparing data (50% of organizations found this) Resource constraints (Time, Finance and Expertise) Staff resistance.

Benchmarking Tools
Matrix technology Comparison tables Graphs: Pie chart, Bar chart / Histogram

SWOT analysis Potential/resourcesanalysis

Price/performance ratio

Potential analysis
Life cycle analysis

market growth/market share portfolio

 market attractiveness Portfolio attractiveness customer Technology/resource strength Market position Contribution margin customer satisfaction portfolio Revenue share Spider web diagram

Benefits of Benchmarking
Improves organizational quality Leads to lower cost Creates buy-in for change Exposes employees to new ideas Broadens organizations perspective A catalyst for learning Increase employee satisfaction Test the internal operating target Raise the level of potential performance Sharing of best practices Understanding world-class performance in-depth

Encourage and stimulate innovation

Pitfalls and Criticisms of Benchmarking

The most persistent criticism of benchmarking comes from the idea of copying others. Benchmarking isnt very helpful if it is used for processes that dont offer much opportunity for improvement. Benchmarking is also not a substitute for innovation

Disadvantages of Benchmarking
Increase the diversity of information so the potential for information overload May reduce managerial motivation when comparing with a better resourced rival Confidentiality of data may be a risk

Ejemplos
Xerox, Hewlett Packard, Ford y General Motors

Dr.K.Baranidharan
THANK YOU