Bench Marking - Copy

8/2/2019 Bench Marking - Copy

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Prepared By

Sajna AbdulRasheed


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Benchmarking is the process of

improving performance bycontinuously identifying,understanding, and adaptingoutstanding practices found inside

and outside the organization.


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Benchmarking is not a method for'copying' the practices ofcompetitors, but a way of seekingsuperior process performance bylooking outside the industry.

When Benchmarking aSystem,

Adapt What You Find,Dont Just Copy It


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1.Plan:

It is necessary to select and definethe process that is to be studied andbenchmarked and then to identifythe measures of process

performance, followed by anevaluation of own capability at thisprocess and determine whichcompanies should be benchmarked

against.


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2.Do:

Conducting primary and secondary

research. Learning as much as

possible about the target company'sparticular process through publicdisclosures in press and trade

publications. Direct communicationmay include telephone interviews,interviews, written surveys or sitevisits.


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3.Check:

In this step all the gatheredinformation is analysed to determine

study findings and recommendationsand identifying process gaps andenablers that contribute to improve

performance and develop the ownbest practice


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4.Act:

Communicate, adapt and monitor the

new process. The objective ofbenchmarking is to change anorganisation in a way that improvesits performance. Finally, recalibratebenchmarking and look for newOpportunities.


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The term benchmarking was firstused by cobblers to measure

people's feet for shoes. They wouldplace someone's foot on a "bench"and mark it out to make the

pattern for the shoes.


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Benchmarking was originallydefined by D.T. Kearns, theCEO of Xerox Corporation, in 1981

as the continuous process ofmeasuring products, services, andpractices against the toughest

competitors or non-competitors whois the leader in their industry


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Benchmarking gives us the chance ofgaining:

Better Awareness of Ourselves (Us)

What we are doingHow we are doing it

How well we are doing it

Better Awareness of the Best (Them)What they are doing

How they are doing it

How well they are doing it


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On the basis ofWhatis beingcompared with other organizationsand Who is being compared with

our organization, we can classifybenchmarking.

Whatis

beingcompared withother

organizations

vs.Who is being

compared withour

organization


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On the basis ofWhatis beingcompared with other organizationswe have four main types. These four

major types of benchmarking are

Product

Performance

ProcessStrategic


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On the basis ofWho is beingcompared with our organization, wehave these categories:

Internal vs. External

Generic

International

Best in Class

Best of the Best


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Many firms perform productbenchmarking when designing newproducts or upgrades to currentproducts. This process cansometimes involve reverse

engineering which is taking apartcompetitors products to findstrengths and weaknesses.


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Performance benchmarking allowsthe initiator firm to assess theircompetitive position by comparing

products and services with those oftarget firms.


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Process benchmarking focuses onthe day-to-day operations of theorganization. It is the task of

improving the way processesperformed every day. Someexamples of work processes that

could utilize process benchmarkingare the customer complaint process,the billing process, the order

fulfillment process, and the


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Strategic benchmarking deals withtop management. It deals with longterm results. Strategic benchmarking

focuses on how companies compete.This form of benchmarking looks at

what strategies the organizations are

using to make them successful.(Japanese firms)


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Sharingopinions

betweendepartments

within thesame

organization.

Advantage:Easier to

implementEasier to accessdataDisadvantage:External ideasblocked


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The gap between

internal andexternal practicesdisplays the waywhere to change

and if there is any

need to change.

Advantage:Helps to measure ones ownperformanceHelps to search for bestpractices

Disadvantage:Takes timeRequires supportLegal/ethical issuesIndustrial espionage


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Comparisons of business process orfunctions that are very similar,

regardless of industry.


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Best practitioners are identified andanalysed elsewhere in the world,

perhaps because there are too fewbenchmarking partners within thesame country to produce valid

results.


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After becoming a best-in-class firm, itmay be difficult to gain new insight and

information from direct competitors.Therefore, the next level of

improvement is called best-of-the bestor best-in-the-world.


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Time Costs - Members of thebenchmarking team will be investingtime in researching problems, findingbest practice companies to study,

visits, and implementation. This willtake them away from their regulartasks for part of each day so

additional staff might be required.


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Visit Costs - This includes hotel

rooms, travel costs, meals, a tokengift etc.

Benchmarking Database Costs -Organizations that institutionalizebenchmarking into their dailyprocedures find it is useful tocreate and maintain a database ofbest practices and the companiesassociated with each best practice

now.


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There are international organizationsspecialized in benchmarkingservices, e.g.,

Global Benchmarking Council

American Productivity and Quality

Center Asian Benchmarking Clearing house

Hong Kong Benchmarking Clearing

house


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Xerox: is photocopiers manufacturer.

L.L. Bean: is mail order clothingcompany relays heavily on logistics.

In 1980s, Xerox performance ofwarehouse and logistics was behindtechnology, Xerox faced financial

difficulty due to the Japanesecompetitors.


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There was potential for theelimination of the bottleneck in the

warehouse.Technology was thought to be a key,

but there was insufficient data to

confirm any of the theories. L. L.Bean was thought to have the bestperformance, but its function was

totally manual.Xeroxs order filling procedures were

Benchmarked against L. L. Beans

and found to pose the greatest


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Through a series of follow-up interviewsand site visits, Xerox determined that L.

L. Bean organised its warehouse so thatthe fast moving inventory (shirts,promotional items, etc.) were locatednear the loading dock. This minimised

the amount of time it took to pick anorder and get it loaded on a truck

Additionally, incoming inventory wasstored using an automated system for

maximizing space more efficiently. Xerox took these findings and

implemented them at their

warehouses. Its overall order fillingefficienc im roved and costs were


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