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BENCHMARKIN

GLEARNING FROM OTHER’S SUCCESS

Nitesh Singh101203067

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What is Benchmarking?Process

Adopting

ImplementingMeasuring performance

Best-in-ClassImprove

WHYBENCHMARK?

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WHY BENCHMARK?

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To Obtain an External Perspective of What Is Possible

To Assist in Setting Strategic TargetsTo Promote Improvements in PerformanceTo Establish a Competitive Edge

To Enhance Customer Satisfaction

To Reduce Costs

To Improve Employee Morale

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Types of Benchmarking

TYPES OF BENCHMARKING•Comparison: (Partner Selection)•Internal – Best in Firm•Competitive – Best in Industry•Functional•Generic•Form:•Performance Benchmarking•Process Benchmarking•Strategic Benchmarking

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Selecting Benchmarking Partners

Benchmarking Type

Internal

External

Functional

Generic

Potential Benchmarking Partners

Comparable sites, branches, sections, departments within the business

Within the same industry sector

Same function across all industry fields

All industry fields

•Comparisons between yourself and similar operations within your own Organization

ADVANTAGES:• “Sharing” - Communication• Data easy to get• Good results, immediate

benefit• Good practiceDISADVANTAGES:

• Limited focus• Internal bias• External Ideas blocked

Internal Benchmarking

EXTERNAL BENCHMARKING• Comparison with external organisations to discover new ideas, methods, products and services. • The gap between internal and external practices displays the way where to change and if there is any need to change.

Advantages•Directly relevant•Comparable practices &

technologiesDisadvantages•Data collection

difficulties• Ethical issues

FUNCTIONAL BENCHMARKING:

Comparative research to seek world-class excellence by comparing business performance not only against competitors but also against the best businesses operating in different industry

Advantages:•Discovering

innovative practices

Disadvantage:•Not suitable for every

organisation•COST

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Benchmarking Methodology

BEST PRACTICEOVERLAP

Competitive• Industry leaders• Top performers with

similar operatingcharacteristics

Functional• Top performers

regardless of industry• Aggressive innovators

utilizing newtechnology

Internal• Top performers

within company• Top facilities

within company

GENERIC BENCHMARKING

• Break the company into generic functions

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• Advantages• Breakthrough ideas• Network development• High potential for

innovation• Disadvantages:• Hard to do!• Some information not

transferable• Time consuming

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• Performance benchmarking enables managers to assess their competitive positions through product and service comparisons.

• Process benchmarking focuses on discrete work processes and operating systems, such as the customer complaint process, the order-and-fulfillment process, or the strategic planning process.

• Strategic benchmarking examines how companies compete and is seldom industry-focused. It roves across industries seeking to identify the winning strategies that have enable high-performing companies to be successful in their marketplaces.

Other Types Of Benchmarking

PLANNING A BENCHMARKING EXERCISEPrincipal Requirements for Success•Strong Commitment From Senior

Management•Willingness to Act on Any Major

Opportunities for Improvement Revealed by Benchmarking•Resources•Staff Capable of Running a

Benchmarking Project•Time for Employees to Spend on

Benchmarking Activities14

THE BENEFITS OF BENCHMARKING Cultural Change

Benchmarking allows organizations to set realistic, rigorous new performance targets, and this process helps convince people of the credibility of these targets.

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THE BENEFITS OF BENCHMARKING

Performance Improvement Benchmarking allows the organization to

define specific gaps in performance and to select the processes to improve.

It provides a vehicle whereby products and services are redesigned to achieve outcomes that meet or exceed customer expectations.

The gaps in performance that are discovered can provide objectives and action plans for improvement at all levels of the organization and promote improved performance for individual and group participants.

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THE BENEFITS OF BENCHMARKING

Human Resources Benchmarking provides a basis for training.

Employees begin to see the gap between what they are doing and what best-in-class are doing.

Closing the gap points out the need for personnel to be involved in techniques of problem solving and process improvement.

Moreover, the synergy between organization activities is improved through cross-functional coop eration. 17

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BENCHMARKING: IS/IS NOTIS

•Continuous process• Provides valuable

information•Learning•Time-consuming•Viable tool,

generically applicable

IS NOT•One-time event•Provides simple

answers•Copying, imitating•Quick & easy•A buzzword, or fad

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A SIMPLE BENCHMARKING MODEL

Plan The

Project

Form The

Teams

Collect The Data

Analyse the data

Take Action

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XEROX – CASE STUDY Benchmarking can be called the management tool that revived Xerox. The Xerox oftoday is not the Xerox of the sixties and seventies. During that time period the organizationexperienced market erosion from competitors, primarily Japanese. They looked at all aspects of their business.Identifying the best processes used by others, Xerox adapted them for their own use. This is how they regained their core competency and strategic advantage in the photocopying industry

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Phase 1: Planning1. Identify what to benchmark;2. Identify comparative companies;3. Determine data collection method & collect

data. Phase 2: Analysis

4. Determine current performance gap;5. Project future performance levels.

Phase 3: Integration6. Communicate finding and gain acceptance;7. Establish functional goals.

The Xerox 12-Step Benchmarking Process

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The Xerox 12-Step Benchmarking Process (continued)

Phase 4: Action 8. Develop action plans; 9. Implement specific actions & monitor

progress;10. Recalibrate benchmarks.

Phase 5: Maturity11. Attain leadership position ;12. Fully integrate practices into processes.

ConclusionNow a days, more than 60% companies

in the world uses this technique for fixing their target for continuous improvement. For them it is an important tool. But to be effective it must be used properly. Finally, benchmarking is not a substitute for innovation; however, it is a source of ideas from outside the organization.

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