Benchmarking TQM

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Benchmarking TQM

  1. 1. Presented By: Amarjeet Gorai Neha Albina Ekka Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 1
  2. 2. What is Benchmarking? Benchmarking is the process of measuring an organization’s internal processes then identifying, understanding, and adapting outstanding practices from other organizations considered to be best-in-class. Definition “measuring our performance against that of best-in- class companies, determining how the best-in-class achieve those performance levels and using the information as a basis for our own company’s targets, strategies and implementation .” Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 2
  3. 3. The Essence of Benchmarking “moving from where we are to where we want to be” Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 3
  4. 4. Why Benchmarking?          To Obtain an External Perspective of What Is Possible To Assist in Setting Strategic Targets To Promote Improvements in Performance To Establish a Competitive Edge To Enhance Customer Satisfaction To Reduce Costs To Improve Employee Morale To Achieve Quality Awards To Survive Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 4
  5. 5. When Benchmarking?  If the company’s QMS is not properly developed, documented and implemented.  If company’s great strength areas are not measured.  If company’s great weakness areas are not measured.  If company’s great opportunities are not measured.  If customer needs are not assessed and rectified . Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 5
  6. 6. Benchmarking in the Context of TQM TQM Key principles include: Comparisons with best practice. A Strong emphasis on meeting the needs of the customer (internal and external). The importance of efficient, effective business processes. The need for continuous improvement . Enhances a TQM program . Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 6
  7. 7. Levels Of Benchmarking In Competitive Environment  Internal benchmarking - Within one’s org.  Competitive benchmarking - Analysis the performance and practices of best in class companies.  Non-competitive benchmarking - Is learning something about a process a company wants to improve by benchmarking.  World class benchmarking - Ambitious and looking towards recognized leader. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 7
  8. 8. Benchmarking Methodology Best Practice Overlap Competitive • Industry leaders • Top performers with similar operating characteristics Functional Internal • Top performers regardless of industry • Aggressive innovators utilizing new technology Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur • Top performers within company • Top facilities within company 8
  9. 9. Types Of Benchmarking Performance or operational benchmarking: It involves – pricing, technical quality, features and other quality. Process or functional benchmarking: It involves processes such as billing, order entry or employee training. Strategic benchmarking: Examines how companies compute and seeks the winning strategies that have led to competitive advantage and market success. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 9
  10. 10. Areas Of Benchmarking Operational Strategies: Supply chain management: • Inventory management • Inventory control • Warehousing and distribution • Transportation Marketing management: H.R. Practices: • Customer service levels • Purchasing • Billing and collection • Purchasing practices • Talent Acquisition / Search • Training and Development • Compensation management etc. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 10
  11. 11. Guidelines to Benchmarking Do not go on a fishing expedition.  Use company people.  Exchange Information.  Legal Concerns.  Confidentiality. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 11
  12. 12. Five Phases Of Benchmarking  Planning: Identify the product, service or process to be benchmarked  Analysis: Determine the gap between the firm’s current performance and that of the firm’s benchmarked and identify the causes of significant gaps.  Integration: Establish goals and obtain the support of managers who must provide the resources for accomplishing the goals  Action: Develop action plans, and team assignment, implement the plans, monitor progress and recalibrate benchmark as improvements are made.  Maturity: Leadership position attended, best practices fully integrated into process. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 12
  13. 13. Benchmarking Process In Motorola Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 13
  14. 14. Benchmarking Strategy Decide what to benchmark.  Select companies to benchmark.  Obtain data and collect information.  Analyze data and forms action plans.  Recalibrate and start the process again. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 14
  15. 15. The Seven Step Benchmarking Model Activity What is included Step 1: Identify what to benchmark  Clarify the benchmark objectives  Decide whom to involve  Define the process  Consider the scope  Set the boundaries Agree on what happens in the process  Flowchart the process Step 2: Determine what to measure  Examine the flow chart  Establishes the process measures  Verify that measures match objectives Step 3: Identify who to benchmark  Conduct general research  Choose level to benchmark Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 15
  16. 16. The Seven Step Benchmarking Model Step 4: Collect data  Use a questionnaire  Conduct a benchmark site visit Step 5: Analyze data and determine the gap  Quantitative data  Qualitative analysis Step 6: Set goals and develop an “Action Plan”  Set performance goals  Develop an action plan Step 7: Monitor the process  Track the changes  Make benchmarking a habit Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 16
  17. 17. Factors For Success Of Benchmarking  Benchmarking must have the full support of senior management and they should actively involve with this process.  For Benchmarking, team and process training is very imp.  Benchmarking should be a team activity.  Benchmarking is an ongoing process.  Benchmarking efforts must be organized, planned, and carefully managed.  Correct use of benchmarking can lead you to the competitive edge in today’s business market place. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 17
  18. 18. Advantages  Benchmarking is a systematic method by which organizations can measure themselves against the best Industry practices.  It promotes superior performance by providing an organized framework through which organization learn how the “ best in class” do things.  Intensive studies of existing practices often lead to identification of non-value added activities and plans for process improvement.  It helps for continuous improvement.  Benchmarking inspire managers (and organization) to compete.  Through Benchmark process organization can borrow ideas, adopt and refine them to gain competitive advantages.  Benchmarking provides a basis for training human resources. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 18
  19. 19. Disadvantages  The most resistant criticism of Benchmarking comes from the idea of copying others.  It is not a strategy nor is it intended to be a business philosophy. Therefore, it is a time taking technique.  Benchmarking is not “instant pudding”. It will not improve performance if proper infrastructure of Total Quality Management is not in place. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 19
  20. 20. Conclusion Now 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. It breaks down (waste money, time and energy and some times morale too) if process owners and managers feel threatened or do not accept and act on the findings. Finally, benchmarking is not a substitute for innovation; however, it is a source of ideas from outside the organization. Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 20
  21. 21. Thank you and Have a Nice Day… Tuesday, January 14, 2014 Xavier Institute of Management, Jabalpur 21

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