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Benchmarking
Introduction
Where companies want to stay on top of latest quality and management practices, visits to world class/best-in-class organizations can be helpful for stimulating new and fresh ideas. Benchmarking can be defined as measuring your 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 your own company’s targets, strategies and implementation. The process helps a company to: Critically assess its strengths and weaknesses Develop awareness as to the strengths and weaknesses of industry leaders Sharpen internal attitudes as to the new frontiers of knowledge and management/engineering practice Sow the seeds of a critical mass for instituting positive change within the organization
Benchmarking Process
Step-1: Deciding What to Benchmark: The first step may seem obvious but it is necessary to have a clear picture as to the object of the exercise. Questions such as the following guide the benchmarking team: Is the topic important to the customers? Does the topic reflect an important business need? Is the topic significant in terms of costs or key nonfinancial indicators? Is the topic an area where additional information could influence plans and actions? Step-2: Plan the Benchmarking Project: A team leader needs to be identified who is responsible for doing initial planning and contacting. Adequate authority needs to be provided so that others will co-operate during the benchmarking and for implementation of various ideas based on the benchmarking information obtained. A team is created ensuring a broad range of skills is brought to the project. Step-3: Understand Current Performance: The benchmarking team should satisfy itself as to the key performance indicators that are central to their organization to establish not only baseline data but to ensure that the right things are examined during field visits. Key performance indicants might be cycle time, uptime/downtime, absenteeism, grievance levels, etc. Step-4: Study Others: Having generated a list of potential benchmarking candidates, the list is narrowed to a few select candidates. General and specific questions are created and catalogued along with the best way to get the questions answered. Field visits are conducted with notes accumulated and edited while in the field. Team debriefings occur during lunch, dinner or in the evening.The benchmarking team should NOT restrict or limit itself to organizations in their industry. Step-5: Learn from the Data: Data and information are collected and organized into some appropriate form (binders) for review. Action reports emerge from various aspects of the research. Remaining gaps are identified with intent to conduct last visits. Step-5: Use the Findings: The team will work with the project sponsor or champion to make the best use of the information and implementation plans. Other areas of the company may be identified as beneficiaries of the completed benchmarking study.
Benchmarking Mistakes
Too often companies decide that benchmarking is the way to go and head off half cocked about how to do this vital activity properly. Benchmarking is much more than a few days of organized tourism. It needs to be planned and executed with care. Too broad in scope – everyone seems to want to take on the world Too many questions – start with a small list; it will grow quickly as project unfold Team not prepared – benchmarking may not be rocket science but it does take some skills and preparation Haste makes waste – some mistake spped for quality; better to take time to do it right Metrics vs. practices – you need the numbers but focus on practices Partners too similar – the farther afield you look, the more likely you are to learn Famous company fixation – they may be good in some things, but few are world class at everything