BENCHMARKINGby kuldeep mathur

m.b.a. jiwaji university gwalior

Benchmarking

DefinitionBenchmark: 1. A surveyor’s mark…that

has a known position and altitude: benchmarks are used as reference points in determining other altitudes…2. A standard or point of reference in measuring or judging quality, value, etc.

-Webster’s New Universal Unabridged Dictionary

Benchmarking for Best Practices

Benchmarking is the practice of being humble enough to admit that someone else is better at something, and being wise enough to learn how to match and even surpass them at it.

Benchmarking is a systematic and continuous process of searching, learning, adapting and implementing the best practices from within own organization or from other organizations towards attaining superior performance

- National Productivity Corporation, Malaysia

Types of Benchmarking

Benchmarking

Market related(Competition analysis)

Internal Benchmarking External Benchmarking

Generic ProcessesAcross Industries

(Best Practice)

Branch related(Trend research)

Plant related

e.g., safety performance measures

4 Steps of Benchmarking

1.The Plan2.Collect Information3.Analyze Information4.Adapt and Implement

My Benchmarking Plan

Planning and collecting stages should consume ½ of your benchmarking time.

Choose the function to benchmark. Depict how you do the function. Choose the benchmarking team. Analyze the industry Evaluate organizations to

benchmark.

Collect Information Use a common definition for the process. Do not implement all parts of the process. Look for common threads among facilities. Look for bright, refreshing new ideas for

implementation. Analyze the performance factors—those that

are significant. Assign numerical values to each performance

factor.

Analyze the Information

Measure the gap between you and your competitor.

Be objective; do not place blame for performance difficulties.

Plot the key performance factors. Gain buy-in from employees. Know the outcome you want to

achieve.

Adapt and Implement Go deeply into detail when reviewing

processes. Take variables into account. Prepare your Action Plan. Provide for continuous improvement. Test the improved system. Provide for yearly updates.

Benchmarking as a Continuous Process

Changes in industry

environment

Process Improvement

Raising the standard

Reviewing processes for improvement

Importance of Benchmarking

Objective Without Benchmarking With Benchmarking

To become more adaptive Evolutionary Change Understanding of competition ideas from proven practices

Implement Industry best practices

Few solutions, Frantic catch up activity

Many options, Superior performance

Defining customer requirements

Based on history, Gut feeling or Perception

Market reality, objective evaluation

Establishing effective goals & objectives

Lacking external focus, Reactive

Credible unarguable, Proactive

Developing true measures of productivity

Pursuing projects, strength/weaknesses not understood, Route of least resistance

Solving real problems, Understanding output based on industry best practices

Benefits of Benchmarking

Improves organizational quality Leads to lower cost Creates buy-in for change Exposes employees to new ideas Broadens organization’s 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

“If you know neither yourself nor your enemy, you will succumb in every battle.

If you know yourself but not the enemy, for every victory gained you will suffer a defeat.

If you know yourself and your enemy, you need not fear of a hundred battles.” - Sun Tzu

Benchmarking Model Phase 1

BENCHMARK

Start

1. Agree On Benchmarking Topic

2. Finalise On Scope; Measures & Definitions

3. Data Collection : Survey

4. Share Strengths

Phase 3IMPROVEMENT

New Area

9. Plan to Adapt Best Practices

10. Implement Best Practices

11. Monitoring Result

12. Standardization

13. Daily Control

Continue Existing Project?Yes

No

Phase 2BEST PRACTICES

5. Plan for Site Visit

6. Data Collection

7. Recommend Improvement

8. Share Findings

Yes

2nd Site Visit (Focus

Visit)