Quality Awards

Quality Awards
Quality awards have been established to generate improvement in
quality.
1. Malcom Baldrige Award
The purpose of this award competition is to stimulate efforts to
improve quality, to recognize quality achievement's and publicize
successful programs.
The award was first presented in 1988 and award categories included
manufacturing and small business. Later on categories of healthcare
and education were also added.
Quality Awards
Applicants are evaluated in seven main areas:
• Leadership
• Information and Analysis
• Strategic Planning
• Human Resource Management
• Customer and Market focus
• Process Management
• Business Results
Quality Awards
2 The European Quality Award
The European Quality Award is Europe’s most prestigious award for
organizational excellence.
The European Quality Award sits at the top of regional and national
quality awards and applicants have often won one or more of those
awards prior to applying for the European Quality Award.
Quality Awards
3. The Deming Prize
The Deming Prize named in honor of the late W. Edwards Deming. It is
Japan’s highly desirable award recognizing successful quality awards. It
is given annually to any company that meets the awards standards.

The major focus of the judgment is on statistical quality control, making

it much narrower in scope than the Baldrige Award which focuses more
on customer satisfaction.
Quality Awards
Companies that win the Deming Prize tend to have quality
programs that are detailed and well communicated
throughout the company.

Their quality improvement programs also reflect the

involvement of senior management and employees, customer
satisfaction and training.
Cost of Quality
DEFINITION – COST OF QUALITY

• The term “Quality costs” means different to different people.

• Some perceive it has the cost involved in attaining the quality
• Some equate it with the cost of running quality department
• The interpretation of quality experts has been to equate the
quality costs with the cost of poor quality.

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DEFINITION – COST OF QUALITY

• Quality is measured by the cost of quality which is the expense of

non conformance – the cost of doing things wrong.
(Philip Crosby)
• Quality costs usually are defined as costs incurred because poor
quality may or does exist.
(Armand Feigenbaun

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QUALITY COSTS

The costs of quality are generally classified into four categories:

1. Prevention
2. Appraisal
3. Internal failure
4. External failure

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QUALITY COSTS

• Prevention Costs:
Prevention costs include those activities which remove and prevent defects from
occurring in the production process. Included are such activities as quality
planning, production reviews, training, and engineering analysis, which are
incurred to ensure that poor quality is not produced.

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QUALITY COSTS

• Appraisal Costs:
Appraisal costs are those costs incurred to identify poor quality products after they
occur but before shipment to the customers. Inspection activity is an example.

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QUALITY COSTS

Failure Costs:
Failure costs are those incurred either during the
production process (internal) or after the product
is shipped (external).

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QUALITY COSTS

Internal Failure Costs:

Internal failure costs include such items as machine downtime,
poor quality materials, scrap, and rework.

External Failure Costs:

External failure costs include returns and allowances, warranty costs,
and the hidden costs of customer dissatisfaction and lost market
share. Recognition of the relative importance of external failure costs
has caused many companies to broaden their perspective from
product quality to total customer satisfaction as the key quality
measure.

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QUALITY COSTS
• This figure is an attempt to convey the idea of
an iceberg, where only 10% is visible and 90%
is hidden from view.
• The visible 10% comprises of such items as
scrap, rework, inspection and returns under
warranty
• For many companies these comprise what
they believe to be the total costs.

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QUALITY COSTS

• The principle is like the traditional medical axiom: “An ounce of prevention
is worth a pound of cure”.
• The relationship between these costs is reflected in the 1-10-100 rule
depicted in the following figure.
• One dollar spent on prevention will save $10 on appraisal and $100 on
failure costs.

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 Prevention 1

10
$
Correction $
$ 100
$

Failure
$ $

$ $

$ $

Figure – 2 1-10-100 Rule

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 QUALITY COSTS
• As one moves along the stream of events from design to
delivery, the cost of errors escalates as failure costs become
higher and the payoff from an investment in prevention
becomes greater.
• Computer systems analysts are aware of this and understand
that an hour spent on better programming or design can save
up to ten hours of systems retrofit and redesign.

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 QUALITY COSTS

• One General Manager of a renowned computer systems division

of company observed.

• “The earlier you detect and prevent a defect the more you can
save. If you catch a two cent resistor before you use it and throw
it away, you lose two cents. If you don’t find it until it has been
soldered into a computer component, it may cost $10 to repair
the part. If you don’t catch the component until it is in the
computer user’s hands, the repair will cost hundreds of dollars ”.

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Prevention Appraisal
Design review Vendor surveillance
Zero defects program Receiving inspection
Supplier training Product acceptance
Supplier evaluation Process control
Specification review Inspection
Quality audits Quality control
Preventive maintenance Testing
Engineering changes Equipment costs

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Internal Failure External Failure
Downtime Customer affairs
Engineering changes Purchase changes
Excess inventory Service after sales
Disposal costs Product liability
Reinspection Lost market share
Delivery delay

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 BENEFITS OF COSTS OF QUALITY CONTROL
Reduced Items Improved Items
Inventory Finished goods Return on assets Economies of
levels scale
Lead-time Warehouse Return on Scheduling
space investment
Time-to- Order process Vendor relations Productivity
market time
Turnaround Design to Transportation
delivery time
Work in process Learning curve

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THE USE OF QUALITY COST
INFORMATION
Quality cost information can be used in a number of ways:
• To identify profit opportunities
• To make capital budgeting and other investment decisions (quality, as
opposed to payback, is the driver of decision to purchase new equipment
or dispose off unneeded ones; equipment for network is not needed if the
rework is eliminated or reduced).

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THE USE OF QUALITY COST
INFORMATION
• To improve purchasing and supplier-related costs.
• To identify waste in overhead caused by activities not required by the
customer.
• To identify redundant systems.
• To determine whether quality costs are properly distributed.
• To establish goals for budget and profit planning.

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THE USE OF QUALITY COST
INFORMATION
• To identify quality problems.
• As a management tool for comparative measure of input-output
relationships (e.g., the cost of a reliability effort versus warranty costs).
• As a tool of Pareto Analysis to distinguish between the “vital few” and the
“trivial many”.
• As a strategic management tool to allocate resources for strategy formulation and
implementation.
• As an objective performance appraisal measure.

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Process Improvement
Kaizen Cycle For Continuous Improvement

Kaizen can be implemented in a seven-step cycle to create an environment based

on continuous improvement. This systematic method includes:
• Get employees involved. Seek the involvement of employees, including gathering
their help in identifying issues and problems. Doing so creates buy-in for change.
Often, this is organized as specific groups of individuals charged with gathering
and relaying information from a wider group of employees.
• Find problems. Using widespread feedback from all employees, gather a list of
problems and potential opportunities. Create a list if there are many issues.
• Create a solution. Encourage employees to offer creative solutions, with all
manner of ideas encouraged. Pick a winning solution or solutions from the ideas
presented.
 Kaizen Cycle For Continuous Improvement

• Test the solution. Implement the winning solution chosen above, with

everyone participating in the rollout. Create pilot programs or take
other small steps to test out the solution.
• Analyze the results. At various intervals, check progress, with specific
plans for who will be the point of contact and how best to keep ground-
level workers engaged. Determine how successful the change has been.
• Standardize. If results are positive, adopt the solution throughout the
organization.
• Repeat. These seven steps should be repeated on an ongoing basis,
with new solutions tested where appropriate or new lists of problems
tackled.
 KAIZEN APPROACH (CONTINOUS
PROCESS IMPROVEMENT)

• Kaizen is a Japanese word for the philosophy that defines management role in
continuously encouraging and implementing small improvements involving everyone.
• It is the process of continuous improvement in small increments that make the process
more efficient, effective, adoptable and under control.
• Improvements are usually accomplished at little or no expense, without sophisticated
techniques or expensive equipment
• It focuses on simplification by breaking down complex processes into their sub processes
and than improving them.

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KAIZEN, CONCEPT AND
TECHNIQUES
The characteristics of Kaizen are as follows:
•Improvement efforts are people oriented.
•Process and efforts for better results.
•Improvement efforts are based on accumulation of small steps.
•Effect is long term and long lasting.
•Timeframe of improvement is continuous and incremental.

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KAIZEN, CONCEPT AND
TECHNIQUES
• Change is gradual and constant.
• The improvement effort is focused on total employee involvement.
• The approach for improvement is that of group efforts/team work.
• Requires little investment but great effort to maintain it.
• The advantage of Kaizen is that it works well/better suited to slow
growth economies.
KAIZEN AND INNOVATION
• Kaizen is different from innovation.
• Innovation generally represents the focus of western management,
which results in large, short-term, radical changes in product or
process.
• Often innovation is the result of substantial investment in equipment
or technology to the major re-building of entire plant.

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 Focus of Kaizen Improvement
The kaizen improvement also focuses on the use of following:

• Value added and non value added work activities.

• Seven classes of waste i.e. overproduction, delay ,
transportation, processing, inventory, wasted motion, and
defective parts.
• Principles of motion study.
• Documentation of standard operating procedures.
 Focus of Kaizen Improvement

• Just-in-time principles to produce only the units in the

right quantities at the right time with the right resources.
• Team dynamics, which include problem solving,
communication skills, and conflict resolution.
• Visual management by means of visual displays that
everyone in the plant can use for better communications.
• The five S’s for workplace organization.
Process Improvement
 5S
Maintenance System for work place organization

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The 5S Principles
5S is a disciplined step-by-step approach to keeping the
workplace clean and well organized. The five S’s come from
Japanese words starting with S as follows:

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 WORD MEANING
1st S SEIRI Sort out unnecessary items in the
workplace and discard them.
2nd S SEITON Arrange necessary items in good order.
WORD MEANING
3rd S SEISO Clean the workplace thoroughly to
eliminate waste and dust on the floor,
machinery and equipment.

4th S SEIKETSU Maintain high standards of

housekeeping of the workplace in order
all the time.
5th S SHITSUKE Train people to follow good
housekeeping disciplines automatically.
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 Advantages

• With its focus on gradual improvement, Kaizen can create a

gentler approach to change in contrast to big efforts that may be
abandoned due to their tendency to provoke change resistance
and abandonment.
• Kaizen encourages scrutiny of processes so that mistakes and
waste can be reduced.
• Inspection needs are lessened because errors are reduced.
• Employee morale grows because it can bring about a sense of
value and purposefulness.
 Advantages

• Teamwork increases as employees think beyond the specific

issues of their department.
• Client focus increases as customer requirements awareness are
raised.
• Systems are in place to ensure improvements are encouraged
both in the short term and the long term.
 QUALITY CONTROL CIRCLE
• History of Quality Circle
• Quality Circle or Quality Control concept originated from
Japan.
• In April 1962, Dr. K. Ishikawa, presented this idea in the
inaugural issue of journal on QC.
• In the last 50 years, Quality Circle concept was introduced in
as many as 130 countries.
• Quality Circle concept is well established only in ASEAN
countries like Japan, South Korea, Peoples Republic of China,
Taiwan etc.

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QUALITY CONTROL CIRCLE
• Introduction of Quality Circle Concept
• Quality circles are small groups comprising 6-8 volunteer
workers who come from the same work unit or who do
similar work.
• Meet regularly to identify problems and improvements
within their area of responsibility.

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DEFINITION OF QUALITY CIRCLE
• Quality circles is a small group that performs
voluntarily for improvement activities within the same
area.
• This small group carries on continuously as a part of
company wide improvement activities with the focus
on self and mutual developments and improvements
within the workplace, utilizing quality control
techniques with the participation of all members.
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 Quality Improvement
Approaches:
Lean Operations System
LEAN OPERATIONS SYSTEM
A lean operation is a flexible system of operation that uses considerably
fewer resources (i.e., activities, people, inventory, and floor space) than
a traditional system. Moreover, lean systems tend to achieve greater
productivity, lower costs, shorter cycle times, and higher quality than
nonlean systems.

Lean systems are sometimes referred to as just-in-time (JIT) systems

owing to their highly coordinated activities and delivery of goods that
occur just as they are needed.
SUPPORTING GOALS

The ultimate goal of lean is a balanced system, that is, one that achieves a smooth,
rapid flow of materials and/or work through the system. The idea is to make the
process time as short as possible by using resources in the best possible way. The
degree to which the overall goal is achieved depends on how well certain
supporting goals are achieved.
Those goals are to
1. Eliminate disruptions.
2. Make the system flexible.
3. Eliminate waste, especially excess inventory.
SUPPORTING GOALS

Disruptions have a negative influence on the system by upsetting

the smooth flow of products through the system, and they should
be eliminated.
Disruptions are caused by a variety of factors, such as poor
quality, equipment breakdowns, changes to the schedule, and late
deliveries. Quality problems are particularly disruptive because in
lean systems there is no extra inventory that can be used to
replace defective items.
All disruptions should be eliminated where possible. This will
reduce the uncertainty that the system must deal with.
SUPPORTING GOALS

A flexible system is one that is robust enough to handle a mix of

products, often on a daily basis, and to handle changes in the level
of output while still maintaining balance and throughput speed.
This enables the system to deal with some uncertainty. Long setup
times and long lead times negatively impact the flexibility of the
system. Hence, reduction of setup and lead times is very
important in a lean system.
SUPPORTING GOALS
Waste represents unproductive resources; eliminating waste can free up
resources and enhance production. Inventory is an idle resource, taking
up space and adding cost to the system. It should be minimized as much
as possible.
In the lean philosophy, there are seven wastes:
1. Inventory —beyond minimal quantities, an idle resource, takes up
floor space, and adds to cost.
2. Overproduction —involves excessive use of manufacturing resources.
3. Waiting time —requires space, adds no value.
SUPPORTING GOALS

4. Unnecessary transporting —increases handling, increases work-in-

process inventory.
5. Processing waste —makes unnecessary production steps, scrap.
6. Inefficient work methods —reduce productivity, increase scrap,
increase work-in-process inventory.
7. Product defects —require rework costs and possible lost sales due
to customer dissatisfaction.
Waste Elimination

The existence of these wastes is an indication that improvement is possible.

The list of wastes also can identify potential targets for continuous
improvement efforts.
The kaizen philosophy for eliminating waste is based on the following
principles:
1. Waste is the enemy, and to eliminate waste it is necessary to get the
hands dirty.
2. Improvement should be done gradually and continuously; the goal is not
big improvements done intermittently.
3. Everyone should be involved: top managers, middle managers, and
workers.
Waste Elimination

5. Kaizen is built on a cheap strategy, and it does not require spending great
sums on technology or consultants
6. It can be applied anywhere.
7. It is supported by a visual system: a total transparency of procedures,
processes, and values, making problems and wastes visible to all.
8. It focuses attention where value is created.
9. It is process oriented.
10. It stresses that the main effort of improvement should come from new
thinking and a new work style.
11. The essence of organizational learning is to learn while doing.
Building Blocks
As shown in above figure, following are the building blocks:

1. Product design.
2. Process design.
3. Personnel/organizational elements.
4. Manufacturing planning and control.
Product Design
There are four elements of product design:
1. Standard parts: It means that workers have to deal with fewer parts
2. Modular design: Modules are clusters of part treated as single unit
and therefore, it reduces the number of parts which are to be dealt with.
3. Highly capable production systems with quality built in: this is the
requirement of lean operations, therefore quality must be developed in
goods and processes
4. Concurrent engineering: engineering changes which can be disruptive
to smooth operations can be reduced
Process Design
Following are various aspects of process design:

1. Small lot sizes: lot sizes are to be reduced as much as possible, which is one of the
requirements of a lean system
Some of the benefits are :
• Reduced inventory, lower carrying costs
• Less space required to store inventory
• Less rework if defects occur Less inventory to “work off” before implementing
product improvements
• Increased visibility of problems Increased production flexibility Increased ease of
balancing operations
Process Design
2. Setup time reduction: the lean systems require short setup times
3. Manufacturing cells: the cells contain the machine and tools needed
to process parts having similar processing requirements. Therefore,
multiple manufacturing cells are required in lean production
systems.
4. Quality improvement: avoiding the occurrence of quality defects
during the process is required.
Process Design

5. A balanced system: the distribution of the work load evenly

among work stations, called line balancing is also required
6. Little inventory storage: inventory storage is to be minimized.
7. Fail-safe methods: this refers to having safeguards into a
process to reduce/eliminate the possibility of occurrence of
errors
Process Design
8. Production flexibility: this refers to the ability of a system to process different
combinations of products or services which is required in a lean system.

Guidelines for increasing production flexibility are as follows:

• Reduce downtime due to changeovers by reducing changeover time.

• Use preventive maintenance on key equipment to reduce breakdowns and
downtime.
• Cross-train workers so they can help when bottlenecks occur or other workers are
absent. Train workers to handle equipment adjustments and minor repairs.
Process Design

• Use many small units of capacity; many small cells make it easier
to shift capacity temporarily and to add or subtract capacity than
a few units of large capacity.
• Use offline buffers. Store infrequently used safety stock away
from the production area to decrease congestion and to avoid
continually turning it over.
• Reserve capacity for important customers.
Personnel/organizational elements
Following are the 5 important elements of lean systems:

1. Workers as assets: well trained and motivated workers are

considered an asset of a lean system.
2. Cross-trained workers: workers are cross trained to perform
several parts of a process and operate a variety of machines
which adds to system flexibility.
3. Continuous improvement: training of workers in statistical
process control and problem solving leading to continuous
improvement is required for lean systems
Personnel/organizational elements

4. Cost accounting: lean system requires allocation of overheads

such as activity based costing rather than traditional
accounting methods.
5. Leadership/project management: lean systems expects
managers to be leaders and facilitators which allows easy
communication with workers.
Manufacturing Planning and Control
Seven elements of manufacturing planning and control are :
1. Level loading: stable and level daily mix schedules which are expected to
provide level capacity loading.
2. Pull systems: in this system the work is shifted to the next station as it is
completed, which is in response to demand from the next stage.
3. Visual systems: the systems which allow a worker to communicate his needs of
material or work from the proceeding station.
4. Limited work-in-process (WIP): a careful coordination and control of
movement of materials and work in progress can result in substantial benefits
when exercised in a lean system.
Manufacturing Planning and Control

5. Close vendor relationships: lean systems require a close relationship with the
vendors who were expected to provide small frequent deliveries of high
quality goods.
6. Reduced transaction processing: in lean systems it is required that transaction
costs are reduced by reducing the number and frequency of transactions which
do not add value.
7. Preventive maintenance and housekeeping: maintaining the equipment in
good operating condition and replacing parts which have a tendency to fail
before failure is also required in a lean system. Housekeeping, a part of 5S
methodology which aims at maintaining a work place clean and free from
unnecessary materials is also useful in lean systems.
Source: “Operations Management” by William J Stevenson, Mc Graw Hill Education (11 th Edition)
Business Process
Reengineering
Introduction
• BPR is the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical measures of
performance.
• More recently it has emerged as the concept which enables an
organization to take a radical and revolutionary look at the way in
which it operates, and the way work is done.
• It has become popular in a short period of time, promising amazing
results very quickly in relation to corporate and technological change,
transformation and competitive pressures.
Introduction
• While TQM is based, in general, on continuous improvements in processes
over a relatively long period of time, BPR emphasizes structural process
redesign, process reengineering and fundamental rethinking of the business
leading to producing faster returns in a relatively short period of time.
• The organizations which start with TQM will have a better understanding of
the processes which are crucial to both TQM and BPR. Therefore, they are
more prepared to deal with the more radical designing of the new
processes that is demanded by BPR.
• In general, it has been service industries and public sector organizations
which have adopted the BPR approach rather than manufacturing
industries.
Approaches used in BPR
• The two main approaches employed in BPR are process redesign and
process reengineering.
• These approaches are based on taking into consideration the core processes
that are needed to accomplish specific business objectives without being
constrained by what already exists.
• BPR covers a range of activities that result in radical change, to either
individual processes or the total organization.
• The main differences between the two approaches are that the later
involves greater structural change and risk while the former is quicker and
less costly to implement but with potentially fewer benefits and
improvements.
BPR Methodology
There are four main phases of a BPR project that are given as follows:
1. Preparation
2. Innovation and design
3. Implementation
4. Assessment
Preparation

The main activities in this phase are:

• Review the strategic objectives of the business which will provide an
indication of the need for BPR.
• Choose the BPR project. Establish the team and educate its members on
the fundamentals of BPR.
• Identify and define customer needs and requirements and highlight which
of the key processes have the greatest influence on the customer.
• Define strategies that can match business needs and characteristics with
customer requirements.
• Identify the “breakthrough” theme.
Innovation and design

This phase involves the following:

• Develop vision statement for the BPR project.

• Encourage the team to think outside the function and processes.
• The IT department should also provide its help on the processes which
have been re-designed and re-engineered.
• Re engineer or re design these selected processes.
• The organization should be prepared for the change and address issues
such as restructuring of the basic organization and reporting procedures.
Implementation

This phase involves:

• Developing an implementation plan.
• Implementing the new process design in pilot mode.
• Agreeing the goals and objectives for the re-design process and
communicating them to all concerned.
• Emphasizing teamwork.
• Developing education and training programs to provide specific skills for
employees to fulfill their new role.
• Addressing the cultural and people issues to support the smoothy work of
the reengineered process.
Assessment

This phase involves the following:

• Deciding the methods of recording, monitoring and evaluating the
effects of the changes.
• Managing the reengineered business.
• Managing the people dimensions.
• Maintain the change.
• Exploiting the gains.
• Reviewing and improving the methods for BPR.
Benefits of BPR
• Increased customer focus
• Improved profitability
• Improved quality and control
• Improved corporate flexibility.
• Increased speed of service delivery and responsiveness.
• Improve measurability within the process's operation and the
management of that information.

Source: Managing quality edited by Barrie G. Dale…..(5th Edition)

BENCHMARKING
General:
• Many times it is desirable to know whether a group is good, average
or at the top of the industrial sector of the same type.
• The Benchmarking Practice may be considered useful in this regard.
• Benchmarking is a technique used by various organizations around
the world in the most important aspects of their operations.

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BENCHMARKING
In benchmarking practice, following points may prove useful:
• Too much information is as bad as too little.
• Only that information maybe obtained which is needed to make a
direct comparison of performance.
• If the benchmark is clearly defined in the first place, one will be
dealing with manageable and useful data.
• Before one starts comparing with other companies, benchmarking
within the own organization needs to be tested.

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BENCHMARKING
• When a higher level of performance is achieved in a certain activity,
one should:
Quantify it, as closely as possible.

Make sure that likes are compared with likes.

Seek opinion of other managers in order to learn from the other companies’
experiences.

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BENCHMARKING

Remember that the most important issues may change with time.

 Try not to benchmark too many things to begin with.

 Not waste time to benchmark things that are less important.

 Define what needs to be precisely measured.

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BENCHMARKING
Plan for Benchmarking:
• It is perhaps possible to benchmark almost any activity that can be
measured.
• In practice’ however, one would want to start with those things, an
organization is really good at to be successful in the benchmarking
processes or activities.

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BENCHMARKING FEATURES

Change
Measurement Review

BENCHMARKING FEATURES
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FOCUSING BENCHMARKING

Mission

BENCHMARKING
Critical
Processes

Critical Success
Factors

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THE MAIN CHARACTERISTICS OF
BENCHMARKING
The main characteristics of benchmarking are:
• It is a corporate wide applicable tool.
• It is process-driven and not individually focused.
• It comes in various forms and can focus on “what, where, how”
(practices) and “how much, how big, how small” (metrics).

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THE MAIN CHARACTERISTICS OF
BENCHMARKING
• It is based on continuous improvement and therefore is an integral
component of total quality management.
• It is a useful practice for bringing about a positive change in an
organization.
• It is knowledge based and brings in state of the art thinking all the
time.

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SELECTING BENCHMARKING
PARTNERS
Benchmarking
Benchmarking
Potential benchmarking partners
Type
Type

Comparable sites, branches, sections, departments

Internal
within the business

Competitor Within the same industry sector

Functional Same function across all industry fields

Generic All industry fields

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FOUR MAIN TYPES OF BENCHMARKING

There are four types of benchmarking:

1) Internal Benchmarking:
a) It is the continuous effort of establishing good practice
uniformly and company wide by continuously comparing
what takes place in various operations of business
organizations.

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FOUR MAIN TYPES OF BENCHMARKING

b) The main advantage of this type of benchmarking is the

ease of implementation with a low requirement in terms
of resources and time.
c) The disadvantage is that it is directed only to an internal
standard of performance.

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FOUR MAIN TYPES OF BENCHMARKING

2) Competitive Benchmarking:
a) It aims at comparing specific models or junctions with
main competitors.
b) It is also described as reverse engineering since the
starting point in most cases has been the product and
looking at its characteristics and functionality.

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FOUR MAIN TYPES OF BENCHMARKING

c) The advantage of this type of benchmarking is the direct

comparison with main competitors.
d) But the disadvantage is – the competitors’ data may not
point to best practices.

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FOUR MAIN TYPES OF BENCHMARKING

3) Functional Benchmarking:
a) This type of benchmarking compares specific functions
with best in industry and best in class.
b) It is a positive approach in benchmarking because it is
only related to specific functions.
c) It may not be of benefit to other operations in the
business organizations concerned.

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FOUR MAIN TYPES OF BENCHMARKING

3) Generic Benchmarking:
a) This is the ultimate in terms of benchmarking
applications.
b) This approach applies to all functions of business
operations and encourages the continued effort of
comparing functions and processes with those of best in
class.

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DEFINITIONS OF BENCHMARKING

Definitions of benchmarking are many but an analysis of each reveal's

similar characteristics:
1) An enabler for achieving and maintaining high levels of
competitiveness.
2) The measurement of business performance against the best of the
best through a continuous effort of constantly reviewing processes,
practices and methods.

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DEFINITIONS OF BENCHMARKING

3) Benchmarking is a process which can be characterized by a standard

(an excellence point obtained) and variables (expectations,
performance and measurements).
4) The continuous process of measuring our products, services and
business practices against the toughest competitors and those
companies recognized as industry leaders.

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DEFINITIONS OF BENCHMARKING

5) Improving by comparing with the best by continuously

implementing change and measuring performance.

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