2. What do we mean by the voice of the market?
• The marketplace includes immediate customers as well as
competitors, the customers of competitors, potential
competitors, and potential customers.
• Customers can be good source of information about
competitors, the data should include the strengths and
weaknesses, by understanding the competitors we begin to
understand the marketplace.
3. What do we mean by the voice of the market?
• Customer’s data may be useful for targeting weaknesses,
improving products and services, and improve the
performance of suppliers.
Strategic Quality Planning Model
Company Mission
Strategic Plan
Competitive forces Strategic Quality Plan customer needs
4. Gaining insight through benchmarking
• A benchmark is an organization recognized for its
exemplary operational performance (best practices).
• Examples: Toyota for process, Intel for design, Scandinavian
airlines for service, and Honda for rapid product
development.
• Benchmarking is the sharing of information between
companies so that both can improve.
5. Benchmarking
• There are two parties to each benchmarking relationship:
1. initiator firm: initiates contact and studies another firm .
2. Target firm(benchmarking partner): is the firm being studied
,and enters into a reciprocal agreement to observe the
initiator firm.
3.Types of benchmarking: process, financial, performance,
product, strategic, functional.
6. Process banchmarking
• The initiator firm focuses its
observation and
investigation on business
processes, including:
process flows, operating
systems, process
technologies, the operations
of target firm or
department.
Financial benchmarking
• To perform financial
analysis and to compare the
results with the overall
competitiveness.
• The interaction will be
between the initiator and a
third party that gathers this
information.
• EX: the internet.
7. Performance benchmarking Product benchmarking
• Allows initiator firms to
assess their competitive
position by comparing
product and services with
those of target firms.
• Performance issues include:
cost structures, productivity
performance, speed of
concept to market ,quality
measures.
• When designing new
product or upgrade to
current products, including:
reverse engineering, or
dismantling competitor’s
products to understand the
strengths and weaknesses of
their design, and develop
new ideas for product and
service design.
8. Strategic benchmarking functional benchmarking
• Involves observing how
others compete.
• firms go outside their own
industries to learn lessons
from companies and
organization in different
industries
• This involves target firms
that have won prestigious
honors such as: Malcolm
baldridge award, Shingo
prize, the Deming prize.
• Where a company focuses
its benchmarking efforts on
a single function to improve
the operation of this
function.
• Ex: purchasing managers ,
marketing department,
human resource function,
and others in many
organization.
10. Benchmarking purposes and quality maturity
Best in
the
world
National
leadership
Best in
class
Beating
industry
standards
Best
in firm
Borrowin
g ideas
Learning
from
successes
Quality
maturity
11. Commonly Benchmarked Performance Measures
• The measures a firm chooses depend on the key business
factors(KBFs).
• KBFs: are factors related to the business success of the firm,
• Ex: if customer satisfaction might be related to market share,
then a company would be very interested in tracking its
customer satisfaction.
12. Benchmarked performance measures:
Financial ratio:
such as return on assets (ROA) or
return on investments (ROI), which are
the easiest to obtain and compare.
All is needed is an income statement
and a balance sheet.
Operating Results:
are important for monitoring and
tracking the effectiveness of a company.
Might include cycle times, waste
reduction measures, value-added
measures, and lead time, setup time.
Productivity ratios:
is measuring the extent to which a firm
effectively uses scarce resources.
Human resources measures:
provide important insights into how
effectively the business is being run.
Employee satisfaction is significantly
related to business performance in
many firms.
Customer-Related Results:
Include customer satisfaction and
comparisons of customer satisfaction
relative to competitors.
•Good indicator of financial
performance.
Quality measures:
include conformance-based quality
information such as reject rates,
capability and performance information,
scrap and rework measures, percentage
of defectives, field repairs, costs of
quality.
13. Benchmarked performance measures:
Market share data:
are an essential indicator of business
success. Market share does not
encompass only a single measure,
because markets are segmented ,market
share includes shares in the different
markets served by the firm.
Structural measures:
include objectives, policies , and
procedures followed by a firm. They include
also safety, production, accounting,
financial, engineering.
14. Why collect all these measures?
• Management by fact: lead to that decisions are made based on
the sound collection and analysis of data.
• Performance measures or indicators are measurable
characteristics of products, services, processes, operations the
company uses to track and improve performance.
15. Why collect all these measures?
• The measures should be selected to best represent the
factors that lead to improved customer, operational
and financial performance.
• Measures support goals.
16. Key measures:
the metrics that need to be
monitored to measure the
health of the business.
Critical success factors:
factors that help to
determine the success of
the firm.
18. Robert camp’s business benchmarking process
• Step 1: Decide what to benchmark.
• Step 2: Identify whom to benchmark.
• Step 3: Plan and conduct the investigation.
• Step 4: Determine the current performance gap.
• Step 5: Project future performance levels.
19. Robert camp’s business benchmarking process
• Step 6: Communicate benchmark findings and gain acceptance.
• Step 7: Revise performance goals.
• Step 8: Develop action plans.
• Step 9: Implement specific actions and monitor progress.
• Step 10: Recalibrate the benchmarks.
20. Leading and managing the benchmarking effort
• Benchmarking is a managed process.
• Managing the benchmarking process involves establishing,
supporting, sustaining the benchmarking.
• To begin the management process ,a strategy statement
outlining the goals and strategies to be used is developed.
• In strategy statement Management sets expectations for
performance.
21. Leading and managing the benchmarking effort
• Other activity for management include training.
• Training is a key to success in all quality management
approaches.
• Many of these training courses are available from many
different consulting organizations.
22. Baselining Reengineering
• Baselining: requires the
monitoring of key internal
firm performance measures
over time to identify trends
such as improvement to
inform managerial decision
making.
• Involve identifying measures,
time frames, gathering and
analyzing data.
• A fundamental rethinking and
redesign of business processes.
two factors to achieving success
through reengineering:
• breadth refers to the impact of
the reengineering process to the
entire organization.
• Depth refers to organizational
elements such as responsibilities
, measurements information
technology and skills.
