Dr. ZargariWhat is Benchmarking?At its simplest, benchmarking means:"Improving ourselves by learningfrom others."
WHAT IS BENCHMARKING? Benchmarking is the process of improvingperformance by continuously identifying,understanding, and adapting outstandingpractices found inside and outside theorganization.Company SCompany P Company RCompany TCompany UClientCompanyACompanyBCompanyCCo.DCement IndustryMining Industry
Dr. ZargariWhat is Benchmarking?Benchmarking is the process of comparing onesbusiness processes and performance metrics toindustry bests and/or best practices from otherindustries. Why are others better ? How are others better ? What can we learn ? How can we catch up ? How can we become thebest in our industry ?ClientCompanyACompanyBCompanyCCo.DCement Industry
BENCHMARKING FEATURESBenchmarking has three main features:
A benchmark is an organization recognized for itsexemplary operational performance. There are many benchmarks in the worldincluding:ProcessesDesignTrainingServiceRapid product development
Value ChainValue Chain InboundInboundLogisticsLogisticsOperationsOperationsOutboundOutboundLogisticsLogisticsMarketingMarketing&Sales&SalesServiceServiceFirm InfrastructureFirm InfrastructureHuman Resource ManagementHuman Resource ManagementTechnology DevelopmentTechnology DevelopmentProcurementProcurementSSUUPPPPOORRTTAACCTTIIVVIITTIIEESSPrimary ActivitiesPrimary ActivitiesMarginMarginMarginMarginWhat to Benchmark?Identifying Resources and Capabilities That Can Add Value
Dr. ZargariContinuous and Breakthrough ImprovementTimeImprovementContinuousImprovementBreakthroughImprovementContinuousImprovementHighlyCompetitiveSituationBenchmarkingAcceleratesInnovationand Change
Dr. ZargariWhy Benchmarking?Traditional performance improvement trendsseem not to be sufficient for the highlycompetitive markets. In other words externalenvironment and market conditions changerapidlyCustomers’ expectations are highly liquid and aredriven by standards set by best performer. Anyproduct or service just below these standards maynot catch the eyes of customer.Prevents the “Re-inventing the wheel”.
Dr. ZargariWhy Benchmarking? Benchmarking gives us the chance of gaining: Better Awareness of Ourselves (Us)What we are doingHow we are doing itHow well we are doing it Better Awareness of the Best (Them)What they are doingHow they are doing itHow well they are doing it
Dr. ZargariWhy BenchmarkBenchmarking is a more efficient way to makeimprovements. Managers can eliminate trials anderrors.Benchmarking speeds up organization’s ability tomake improvements. Today, time is of theessence.Benchmarking has the ability to bring yourperformance up as a whole significantly.Learn from others’ experiencesSet realistic but ambitious targets
THREE MAJOR ADVANTAGES OFBENCHMARKINGProduct and Process Improvement:By implementing benchmarking activity,organizations can improve their operation processTime & Cost Reduction:Bench marking is time and cost efficient because itinvolves imitation and adaptation rather than pureinvention.Competitive StrategyBy implementing benchmarking activity,organizations can improve their operation process.
Dr. ZargariCompetitive Strategy Build core competencies that will help to sustaincompetitive advantage Access to a variety of markets Perceived benefit of product or service will increase Product or service is hard to imitate Low-cost leader Target specific shift in strategy Entering new markets Developing new products To create a firm more adaptable to change
Dr. Zargari23Disadvantages What is best for someone else may not suit you Poorly defined benchmarks may lead to wastedeffort and meaningless results. Incorrect comparisons Reluctance to share information
INTERPRETATION Two groups must agree on the change: Process owners (those who run the process) Upper Management (incorporating changesand providing resources) Communicate Benchmark findings andrecommendation and get approval. Establish Functional Goals
ACTION Generic steps of Action Plans:1. Specify tasks2. Sequence tasks3. Determine resource needs4. Establish task schedule5. Assign responsibility for each task6. Describe expected results7. Specify methods for monitoring results
The next step is to repeat thebenchmarking process The benchmarking processmust be used continuously topursue emerging new ideasRECALIBRATION
Dr. ZargariTypes of Benchmarking On the basis of “What” is being compared withother organizations and “Who” is being comparedwith our organization, we can classifybenchmarking.“What” is beingcompared withotherorganizationsvs.Who” is beingcompared withour organization
Dr. ZargariTypes of Benchmarking On the basis of “What” is being compared withother organizations we have four main types.These four major types of benchmarking areevolutionary beginning with product, through tofunctional (performance), process and strategicbenchmarking.ProductPerformanceProcessStrategic
Dr. ZargariTypes of Benchmarking On the basis of “Who” is being compared with ourorganization, we have these categories:Internal vs. ExternalGenericInternationalBest in ClassBest of the Best