“IF YOU KNOW YOUR ENEMY

AND KNOW YOURSELF, YOU

NEED NOT FEAR THE RESULT OF
A HUNDRED BATTLES”

-Sun Tzu, a Chinese General,

dated 500 B C
 BENCHMARKING
Objectives
-Accelerate the process of
Business Change
-Lead to other Breakthrough and
Continuous Improvement
-Result in Customer Satisfaction
and Competitive Advantage
-Adapt Best Practices
 Definition
Benchmarking is the PROCESS of
continuously measuring and
comparing one’s BUSINESS
PROCESSES against comparable
processes in LEADING
ORGANISATIONS to OBTAIN
INFORMATION that will help the
organisation identify and
IMPLEMENT IMPROVEMENTS
TYPES OF BENCHMARKING

• INTERNAL
• COMPETITIVE

• FUNCTIONAL

• GENERIC
INTERNAL BENCHMARKING

Comparison of similar functions in different

units within the organisation
- Ease in getting information
- Ease of implementation due to
similarity of culture
- Low study cost
- May not represent the best
- May not provide breakthrough
improvement
COMPETITIVE BENCHMARKING

Comparison of similar functions against

External Best of Competition
- Understanding Competition
- Limitation in getting Information
- May not provide breakthrough
Improvement
FUNCTIONAL BENCHMARKING

Comparison of similar functions against

external best in any industry
- High openness to share information
- May provide breakthrough
improvement
- Wide scope
- Organisation buy-in may be limited
GENERIC BENCHMARKING
Comparison of functions which are
generic in nature in any industry
- Window to unrelated but relevant
aspects
- Outstanding breakthrough possible
- Possibility of becoming best of the
breed
- Organisation buy-in may be limited
- Requires a lot of creativity
 WHAT TO BENCHMARK

* Products and Services - Finished

Goods, Product and Service
Features
* Work Processes - How a Product or
service is produced or supported
* Support functions – Indirect labour – not
directly associated with the process of
production or support – eg: Finance, HR
WHAT TO BENCHMARK….

* Organisational Performance – Cost,

Revenues, Production Indicators, Quality
Indicators
* Strategy - Short or long term plans,
The planning process
KEY SUCCESS FACTOR

CHOICE OF RIGHT BENCHMARKING PARTNER

THOROUGH PROCESSS MAPPING OF ONE’S

OWN PRACTICES

HIGH LEVEL OF OBSERVATION

WILLINGNESS TO LEARN

COMMITMENT TO EXPERIMENT
REASONS FOR
BENCHMARKING
- ‘Why reinvent the wheel?’
- ‘ If somebody else can, why not us?’

Note of caution:
- not a panacea
- the best-in-class performance is a moving
target.
BENCHMARKING PROCESS
MODEL

Plan
Adapt

Analyse Search

Observe
 PERFORMANCE MATRIX

overkill ok
Current
Performance Must be
Unimportant improved

Importance
BENCHMARKING VOCABULARY

CRITICAL SATISFACTION FACTORS

The “critical few” among the customer satisfaction
factors

Those few customer satisfaction factors that must be

managed successfully if the organisation is to remain
competitive in its marketplace

The Critical few elements of customer satisfaction that

a successful organisation comes close to managing
100% “RIGHT” 100% of the time
Selection of Process
Product: Portable PC

CSF Rank as Rate as per

per imp. Co’s perf.

MECH REL 6.7 6.9

AVAIL./DELIVERY 6.6 2.9
BATTERY LIFE 5.8 5.1
PRICE 4.6 3.4
HARD STORAGE CAP. 4.3 6.5
RAM CAPACITY 3.7 2.7
 SELECTION OF PROCESS

7
.5 .1
Top Priority
Rate .3 for selection of
.7 process to be
Performance 3.5 benchmarked
.4 .2
.6

0 3.5 7

Rank
SCOPING THE PROCESS

* DETERMINE CUSTOMER
REQUIREMENTS FOR THE
PRODUCTS/SERVICES YOU PROVIDE

* ANALYSE THE ACTIVITIES THAT

PRODUCE THE CUSTOMER OUTPUT

*DETERMINE INPUT REQUIREMENTS

* IDENTIFY YOUR SUPPLIERS

 CREATE A HIGH LEVEL
PROCESS MAP

A Process Map is a macro snapshot

of the entire process form
beginning to end.

CREATE ONE – either crossfunctional or

functional to reflect the team composition and
membership
THE TEAM

PROJECT SPONSOR
PROCESS OWNER
TEAM LEADER
TEAM MEMBERS
PROJECT FACILITATOR
 MEASURES
QUALITY
COST
CYCLE TIME
PROBLEM RESOLUTION
MUST LINK INTO:
PERFORMANCE OF
SUPPORTING FUNCTIONS
ORGANISATIONAL STRATEGY