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Wisdom
that has time travelled over centuries is the CEO’s
most potent tool for leaping to world-class standards
today. It is, on the surface, a disarmingly uncomplicated
concept. To improve, set your sights on a standard
of attainment far above yourself. Measure the gap.
And then, bridge it - or, even better it, beat it.
Benchmarking in this precision-engineered algorithm,
is as the formal definition states, "the process
of identifying, understanding and adopting outstanding
practices and processes from organisations anywhere
in the world to help your organisation improve it’s
performance." Don’t be lured by the lucidity
into believing that it is a well-greased process
that, once begun, cruises on auto-pilot until it
delivers the gigantic improvements that it is supposed
to. For, successful benchmarking begins in the mind,
with the acceptance of being a pupil - not a master.
To the CEO who can really glean it’s benefits,
benchmarking, according to the unauthorised definition,
is "the practice of being humble enough to
admit that someone else is better at something,
and wise enough to learn how to match, and even
surpass, them at it."
What
makes this technique, which would have been dismissed
as industrial espionage in another era, so powerful
is it’s ability to catalyse a concentration
of best practices from around your company, your
industry, around every other industry, and around
global businesses - big or small. A structured route
for learning from, even imitating, great ideas legally,
benchmarking will enable you to seek out the best
- standard set by business in everything that your
company does. Crucially, it doesn’t mean following
the practices of just one or two companies ; all
the world’s businesses can be your teacher.
Benchmarking
is the process of identifying , understanding and
adapting outstanding practices from within the same
organisation or from other businesses to help improve
performance.
This
involves a process of comparing practices and procedures
to those of the best to identify ways in which an
organisation can make improvements. Thus new standards
and goals can be set which, in turn, will help better
satisfy the customer’s requirements for quality,
cost,product and service.
In
this manner , organisation can add value to their
customers and distinguish themselves from their
competitors.
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WHY
BENCHMARKING IS NEEDED
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Benchmarking
helps organisations focus on the external environment
and improve
process efficiency.
Benchmarking
promotes a climate for change by allowing employees
to gain an understanding of their performance -
what they are achieving now and how they compare
to others - in order that they become aware of what
they could achieve.
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THE
BENEFITS OF BENCHMARKING
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Benchmarking
brings many advantages to an organisation.
-
It
sets performance goals.
-
It
helps accelerate and manage change.
-
It
improves processes.
-
It
allows individuals to see ‘outside the
box’.
-
It
generates an understanding of world-class
performance.
Benchmarking
is an ongoing process which requires a systematic
approach.
PLANNING
The
objective of this phase is to prepare your plan
for Benchmarking :
-
What
is the subject area to be benchmarked ?
-
Identify
the Benchmark companies / partners ?
-
Finalising
the data collection method ?
-
Collecting
the data ?
ANALYSIS
This
phase looks at :
INTEGRATION
The
objective of this phase is to use the data gathered
to define the goals necessary to gain or maintain
superiority and to incorporate these goals into
your formal planning process :
ACTION
During
this phase, the strategies and action plans are
established, implemented and assessed.
MATURITY
When
you have attained a leadership position and Benchmarking
has become an essential, ongoing element of the
management process.
TYPES
OF BENCHMARKING
There
are four types of benchmarking which can be undertaken
by an organisation :
INTERNAL
BENCHMARKING
The
continuous effort at establishing good practices
uniformly and company wide by comparing what takes
place in all the various operations of business.
Centre
Parcs, the leisure company,benchmarks its facilities
in the UK with 11 continental sites. When one unit
shows a significantly better performance, the others
learn how this was achieved.
COMPETITIVE
BENCHMARKING
Aims
at comparing specific products, functions and processes
with main competitors.
ICL
benchmarks more than 20 of its competitors both
on company performance and on product technology.
The information it gleans is distributed throughout
the company to ensure that every function is aware
of how it compares.
FUNCTIONAL
BENCHMARKING
Compares
specific functions with the best in the industry
and best in class.
BAA
administers seven British airports. In addition
to benchmarking itself against foreign airports,
it has learned from companies in similar industries
with similar problems, for example, Wembley Stadium
and Ascot racecourse. All of these organisations
must move, park and feed thousands of people in
a confined space within a short period.
GENERIC
BENCHMARKING
Perhaps
the ultimate in terms of Benchmarking application.
It applies to all areas of business operations.
It is the comparision of cross-functional,core business
processes with those best in the class.
The
Rover Group recognises the opportunities gained
by looking outside at world-class practices in all
fields to expand the organisation’s vision
of what is possible. The need for benchmarking,
prevalent throughout Rover, has been highlighted
by a number of factors, including the increasingly
competitive world market and the introduction of
Japanese car plants across Europe.
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STEPS
FOR A GLOBAL BENCHMARKING EXERCISE
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STEP
1 : IDENTIFY YOUR PROCESSES.
STEP
2 : IDENTIFY WHAT AND WHO TO BENCHMARK.
-
Knowledge
about Benchmarking
-
Knowledge
about the Benchmarked Processes
-
Ownership
towards the exercise
-
A
strong Team
To
acquire the above, the following are essential :
STEP
3 : COLLECT THE DATA.
After
the teams have undergone training they should chalk
out the manner in which they want to proceed with
the exercise.
-
Who
will collect the information - when.
-
They
should prepare questionnaires and checklist
for data collection.
STEP
4 : ANALYSE DATA AND IDENTIFY GAP.
STEP
5 : PLAN AND ACTION IMPROVEMENTS.
STEP
6 : REVIEW.
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STRATEGIC
BENCHMARKING QUESTIONNAIRE
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Instructions
>> You are asked to answer all questions,
leaving none blank.
>> If for some reason, an item is not applicable
for your business unit, mark "na" and
indicate the reason.
>> Similarly, if you don’t know or cannot
determine an answer for a particular question, please
check or mark "don’t know".
SECTION
A
Business
Unit / Manufacturing Profile
1.
Check the one category that best
describes the business unit for which you
are responding to this questionnaire.
COMPANY
[ ] DIVISION [ ] PLANT [ ] OTHER (Specify)________
a)
What is the name of the business unit for which
you are responding ?
____________________________________________________________________
b)
What is the name of the highest level parent corporation
of which the business unit is a part.
___________________________________________________________________________
c)
Please briefly describe the primary product / family
of the business unit.
___________________________________________________________________________
2.
Check the one item below that best characterizes
the basic thrust of the business unit over the next
two years. ( Check one only ) :
Build
market share [ ]
Hold (defend) market share [ ]
Harvest ( maximise cash flow, sacrifice share
) [ ]
3.
Check the one item below to describe who understands
the goals, strategies and overall business plans
in the business unit. ( Check one only0 ) :
Top
management only [ ]
Top and most middle management [ ]
Top and some middle management [ ]
Every manager and supervisor [ ]
Every manager, supervisor and worker [ ]
4.
For each competitive ability on the next page, circle
the number on the left hand scale that indicates
the degree of importance to the business unit in
competing in the marketplace over the next 5 years.
On
the right hand scale, circle the number that best
describes your business unit’s current competitive
strength relative to the competitor who does it
best in the industry.
Note
that if y ou circle the same number for two items,
it implies that the two items are of approximately
equal importance.
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Degree
of importance
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Degree
of Strength Relative to Best Competitor
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Very
Unimportant
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Very
Important
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Competitive
Abilities
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Weak
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Strong
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1
2 3 4
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5
6 7
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PRICE
Ability
to profit in price competitive markets
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1
2 3 4
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5
6 7
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1
2 3 4
|
5
6 7
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FLEXIBILITY
Ability
to make changes in design and introduce new
products quickly
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1
2 3 4
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5
6 7
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1
2 3 4
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5
6 7
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Ability
to make rapid volume changes
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1
2 3 4
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5
6 7
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|
1
2 3 4
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5
6 7
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Ability
to make rapid product mix changes
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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Ability
to offer a broad product line
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1
2 3 4
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5
6 7
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1
2 3 4
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5
6 7
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QUALITY
Ability
to offer consistent quality
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1
2 3 4
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5
6 7
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1
2 3 4
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5
6 7
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Ability
to provide high-performance products or product
amenities
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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Ability
to provide reliable products
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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DELIVERY
Ability
to provide fast deliveries
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1
2 3 4
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5
6 7
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1
2 3 4
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5
6 7
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Ability
to make dependable delivery promises
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1
2 3 4
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5
6 7
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1
2 3 4
|
5
6 7
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SERVICE
Ability
to provide effective after sales service
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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Ability
to provide product support effectively
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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Ability
to make products easily available ( Broad
distribution )
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1
2 3 4
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5
6 7
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|
1
2 3 4
|
5
6 7
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Ability
to customise products and services to customer
needs
|
1
2 3 4
|
5
6 7
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BENCHMARKING
CASE STUDIES
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