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Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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What is Benchmarking?
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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Benchmarking is the process of
measuring an organization’s internal processes
then identifying, understanding, and adapting outstanding practices from other
organizations considered to be best-in-class.

Definition
“measuring our performance against that of best-in- class companies,
determining how the best-in-class achieve those performance levels
and using the information as a basis for our own company’s targets,
strategies and implementation .”
The Essence of Benchmarking
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

“moving from where we are to where we want to be”


Why Benchmarking?
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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 To Obtain an External Perspective of What Is Possible
 To Assist in Setting Strategic Targets
 To Promote Improvements in Performance
 To Establish a Competitive Edge
 To Enhance Customer Satisfaction
 To Reduce Costs
 To Improve Employee Morale
 To Achieve Quality Awards
 To Survive
When Benchmarking?
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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 If the company’s QMS is not properly developed, documented and
implemented.

 If company’s great strength areas are not measured.

 If company’s great weakness areas are not measured.

 If company’s great opportunities are not measured.

 If customer needs are not assessed and rectified .


Benchmarking in the Context of TQM
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

TQM 6Key principles include:

Comparisons with best practice.

A Strong emphasis on meeting the needs of the customer (internal


and external).

The importance of efficient, effective business processes.

The need for continuous improvement .

Enhances a TQM program .


Levels Of Benchmarking In Competitive Environment
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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 Internal benchmarking - Within one’s org.

 External/Competitive benchmarking - Analysis the performance and


practices of best in class companies.

 Non-competitive benchmarking - Is learning something about a


process a company wants to improve by benchmarking.

 World class benchmarking - Ambitious and looking towards


recognized leader.
Benchmarking Methodology
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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Best Practice
Overlap
Competitive
• Industry leaders
• Top performers with
similar operating
characteristics

Functional Internal
• Top performers • Top performers
regardless of industry within company
• Aggressive innovators • Top facilities
utilizing new within company
technology
Types/ Approaches Of Benchmarking
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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Performance or operational benchmarking:
It involves – pricing, technical quality, features and other quality.

Process or functional benchmarking:


It involves processes such as billing, order entry or employee training.

Strategic benchmarking:
Examines how companies compute and seeks the winning strategies that have
led to competitive advantage and market success.
Five Phases Of Benchmarking
Xavier Institute of Management, Jabalpur Monday, 15 October 2018

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 Planning: Identify the product, service or process to be benchmarked

 Analysis: Determine the gap between the firm’s current performance and that of
the firm’s benchmarked and identify the causes of significant gaps.

 Integration: Establish goals and obtain the support of managers who must
provide the resources for accomplishing the goals

 Action: Develop action plans, and team assignment, implement the plans,
monitor progress and recalibrate benchmark as improvements are made.

 Maturity: Leadership position attended, best practices fully integrated into


process.
BUSINESS PROCESS RE-ENGINEERING

• Business process re-engineering is a useful approach based


on challenging basic assumptions about business methods
and even the objectives they are designed to achieve. IT can
be very useful here, but simply to automate a process is not
the same as re-engineering it.
• Business process re-engineering is the fundamental
rethinking and radical redesign of business processes to
achieve dramatic improvements in critical contemporary
measures of performance, such as cost, quality, service and
speed.
• (a) Fundamental and radical indicate that BPR assumes
nothing: it starts by asking basic questions
• such as, 'Why do we do what we do?', without making any
assumptions or looking back to what
• has always been done in the past.
• (b) 'Dramatic' means that BPR should achieve 'quantum leaps
in performance', not just marginal,
• incremental improvements.
• (c) 'Process' .
PRINCIPLES OF BPR
BPR METHODOLOGY

• Davenport and Short prescribe a five-step approach to


BPR: