Benchmarking is the practice of being humble enough to admit that someone else is better at something and wise enough to try and learn how to match and even surpass them at it.
Benchmarking - is the process of determining who is the very best, who sets the standard, and what that standard is.
organizations evaluate various aspects of their processes in relation to best practice
Benchmarking is a powerful management tool because it overcomes paradigm blindness
Benchmarking gets people out of their comfort zones and generates closed loop change processes
Benchmarking the Japanese way
Employee selection based on potential
Importance of the individual
II. Work style
Top management involved in quality
Very important to have an inquiring mind
Attitude to Excel under challenge
III. Product Quality
Zero defect policy
Quality supersedes production
Just in Time inventory
Company takes interest in development of suppliers
Attention to detail
The Xerox story
Invented as a formal process by Rank Xerox
Benchmarking initiative taken as a part of its ‘Leadership Through Quality’ program.
The program encouraged Xerox to find ways to reduce their manufacturing costs.
The key findings by Xerox
Twice as long as its japanese competitors to bring a product to market
Five times the number of engineers,
Four times the number of design changes
Three times the design costs...
all the Japanese copier companies put together had only 1,000 suppliers, while Xerox alone had 5,000.
Cooperation between the company and the vendor extended to just-in-time production scheduling,
Highly satisfied customers for its copier/duplicator and printing systems increased by 38% and 39% respectively
Customer satisfaction with Xerox's sales processes improved by 40%, service processes by 18% and administrative processes by 21%...
Steps for benchmarking
Identify your problem areas
Identify organizations that are leaders in these areas
Determine measurement methods, units, indicators and data collection method
Analysis of the discrepancies
Present the results and discuss implications / improvement areas and goals
Make improvement plans or new procedures
Monitor progress and plan ongoing benchmark
www.a2zmba.com Benchmarking :- Stages of improvement World Class Recognized as the best. Benchmarked by others even in other sectors Best in Class Exceeds customer expectations,outperforms all competitors and has clear competitive edge Efficient Meets all internal requirements for cost margins, asset utilization,cycle-time and measures of excellence Incapable Is ineffective , inefficient and at the risk of failing. Needs major redesign Effective Satisfies all customer requirements
Staff are benchmarked in five key areas: productivity, cost and structure, compensation and benefits, hiring, and retention.
It is the first Indian BPO company to get an ISO 9002 certification and in December 2001 was awarded with COPC-2000 certification by COPC (Customer Outsourcing Performance Centre), an authority in contact centre operations.
LEVELS OF BENCHMARKING
Strategic Benchmarking - using best practices to develop corporate, program, product strategies and results.
Operational Benchmarking - assessing and implementing the best practices of industry or public service leaders to improve processes to the extent possible to meet organizational goals.
Types of Benchmarking
1. Internal benchmarking -benchmark within a corporation, for example between business units
2. Competitive benchmarking - benchmark performance or processes with competitors
3. Functional benchmarking -benchmark similar processes within an industry
4. Generic benchmarking - comparing operations between unrelated industries
5. Collaborative benchmarking - carried out collaboratively by groups of companies (e.g. subsidiaries of a multinational in different countries or an industry organization).
Energy Star benchmarking - dramatically reduce energy costs while reducing pollution - top Energy Star company in the telecommunications industry
Process benchmarking of software engineering models and the processes followed for CMMI certification
Energy use benchmarking
Energy-use benchmarking process for the company's central office buildings