Benchmarking Systems Approach

BBeenncchhmmaarrkkiinngg:: AA
SSyysstteemmss AApppprrooaacchh ffoorr
CCoonnttiinnuuaall IImmpprroovveemmeenntt
Presented by:
Robere & Associates
©Robere & Associates (Thailand) Ltd. Course: 20BDMK.01-S 1

WWeellccoommee ttoo ““BBeenncchhmmaarrkkiinngg””....
• GGeett ttoo kknnooww eeaacchh ootthheerr
• GGeett ttoo kknnooww yyoouurr
iinnssttrruuccttoorr
• SShhaarree wwiitthh yyoouurr
ccllaassssmmaatteess
• AAsskk qquueessttiioonnss
• HHaavvee ffuunn!!

FFoorrwwaarrdd......tthhiiss ccoouurrssee wwaass::
• Created to provide guidelines on the art and
science of Benchmarking
• Developed from 20 different approaches from
government and industry
• Designed around R&A Quality Philosophy
• Designed to link to other organizational
Quality programs.

CCoonntteennttss::
• What is Benchmarking
• Why Benchmark
• Types of Benchmarking
• The R&A Benchmarking Model
• Guidance for Conducting a
Benchmarking Study
• Supporting Materials

Team Exercise: 15 Minutes
This is a course in "Benchmarking". As a team, discuss:
1. What is Benchmarking?____________________________________________
2. How could Benchmarking help my company? _____ _____________________
3. Does anyone in your "team" have any experience in Benchmarking? If so, what?
_______
4. What are the three (3) major questions I want answered from this course?
Put your answers on the flip chart provided.

DDeeffiinniittiioonnss ooff BBeenncchhmmaarrkkiinngg ::
XXeerrooxx
Benchmarking is the continuous
process of measuring products,
services and practices against the
toughest competitors or those
companies recognized as industry
leaders.

DDeeffiinniittiioonnss ooff BBeenncchhmmaarrkkiinngg ::
KKooddaakk
A continuous learning process for
understanding and measuring our own
operations, comparing them to other
organizations which are recognized as
having superior practices, and
implementing plans to adapt and
change our operations, to meet and
surpass those practices

BBaacckkggrroouunndd..
• Xerox – late 1970’s with it’s copier
duplicator manufacturing division.
• Others have seen the benefits..
– Ford, Alcoa, Milliken, AT&A, DuPont, IBM,
Johnson & Johnson, Kodak, Motorola,
Texas Instruments and others..

BBeenncchhmmaarrkkiinngg wwiillll hheellpp uuss....
• find out what is the “best in class”
process..
• assess performance over time
• helps us with our objectives
• increase customer satisfaction
• become a better company..

BBeenncchhmmaarrkkiinngg -- WWhhaatt iitt iiss
• Meeting Customer Requirements
• A Goal-Setting Technique
• An Ongoing Learning Process

BBeenncchhmmaarrkkiinngg iiss....
• an assortment of tools to help us
identify areas of improvement (one of
the major requirements of
ISO9000:2000, QS9000, ISO14000,
CIP, TQM,
• a culture of wanting to do better..by
comparison to others.

BBeenncchhmmaarrkkiinngg -- WWhhaatt iitt iiss NNoott
• Only suitable for large projects
• The latest corporate fad
• Market research
• Industrial tourism - 80 to 90%
• Copying or stealing

BBeenncchhmmaarrkkiinngg -- WWhhaatt iitt iiss NNoott
• A magic bullet
• A one shot program
• A one person effort
• Competitive intelligence

WWhhyy BBeenncchhmmaarrkk??
• An objective evaluation of a company’s
business processes against similar processes
in other organizations
• Serves as a vehicle to source for
improvement ideas from other organizations
• Broadens an organization's experience base
by providing insights into methods that work
and those that don’t

WWhhyy BBeenncchhmmaarrkk??
• Identify strengths and weaknesses for
improvement
• More improvement ideas to supplement
those of employees
• To remain competitive and achieve total
customer satisfaction

TTeeaamm eexxeerrcciissee:: 2200
MMiinnuutteess
Now that your team has had a discussion of
Benchmarking, discuss and complete the
following Questions:
• Benchmarking is important to companies because____
• My "New" definition of Benchmarking is: _____
• Some examples of successful benchmarking projects are:
• Some reasons why I would want to benchmark some
processes in my company are: __

TTyyppee ooff BBeenncchhmmaarrkkiinngg
• Internal Benchmarking – a comparison
inside the company
• Competitive Benchmarking – competitor
to competitor
• Functional Benchmarking – similar or
identical practices
• Generic Benchmarking – unrelated
business processes or functions

IInntteerrnnaall BBeenncchhmmaarrkkiinngg
• Inside processes
• Can acquire the “best internal” practice
• Many examples of success: US Navy,
DOD, DOT, retail food chain
• Many advantages, but limits options for
growth.

CCoommppeettiittiivvee BBeenncchhmmaarrkkiinngg
• Competitor to competitor
• Helps to know yourself and competitor better
• Can contrast others styles of operation for a
comparison
• Difficult in Thailand because “trade secrets
• Relatively low performance improvement

FFuunnccttiioonnaall BBeenncchhmmaarrkkiinngg
• compares similar or identical practices
• find others to do similar practices better
• good use of international databases
(i.e. www.tbe.com)
• takes more time than internal or
competitive

GGeenneerriicc BBeenncchhmmaarrkkiinngg
• looks for unrelated business processes that
are practiced in the same way
– transferring funds, order fulfillment
– bar coding, admissions, warehousing, etc.
• a broad look at how “generic” processes
compare
• high payoff - but high cost
• can compare to world-class but they have
many request...(internet may help)

TTeeaamm EExxeerrcciissee:: 1155
mmiinnuutteess
As a team, you are to explain to Management the four type of
Benchmarks that your company might use. You will:
• Select a process within your company (in any department)
and select the best method to use to "benchmark" your
process.
• Explain why you've selected this method; why you think that
it is the best approach for your project
• What do you (your team) feel will be a problem using this
approach?

RR&&AA BBeenncchhmmaarrkkiinngg MMooddeell
• Based on more then 20 benchmarking
models
• A “10-step” process using a “PDCA” (PDSA)
cycle common in ISO9000:2000
• The model is in-line with TQL approach
• Uses teams to identify, quantify, evaluate and
report on the benchmark initiative.
• Uses the Strategic Plan as input to the
system

SSttaarrtt
• Develop an action plan
• Recalibrate
AAcctt
SSttuuddyy DDoo
• Select a process to
evaluate
• Select and prepare team
• Identify benchmarking
partners
PPllaann Progress
• Collect and analyze the
data
• Determine performance
gaps and strengths
• Take a systems view
• Communicate
benchmarking findings
• Establish functional goals

PPllaann PPhhaassee:: SStteepp 11
SSeelleecctt tthhee pprroocceessss ttoo bbeenncchhmmaarrkk
• Look at the strategic plan
• Examine significant business
processes
• Create a process owner team (QMB)
• Identify type of benchmarking to use.
• Identify the goals of improvement

WWhhaatt ddoo yyoouu wwaanntt ttoo bbee??
World Class
The Best-in-Class
A best practice
An improvement over
current practices
A practice similar to the
current practices
©Robere Associates (Thailand) Ltd. Course: 20BDMK.01-S 26

SSeelleecctt aanndd pprreeppaarree tthhee BBMMKK TTeeaamm
• Create the team
• Clarify the roles and responsibilities
• Flowchart the process to be
benchmarked

IIddeennttiiffyy bbeenncchhmmaarrkkiinngg ppaarrttnneerr((ss)) ffrroomm
bbeesstt-iinn-ccllaassss
• Research information for best
practice
• Rank the potential partners (5-
15)
• Select final partners (1-5)
• Know and use benchmarking
guidelines for ethical conduct

Team Exercise ffoorr pphhaassee 11::
PPllaannnniinngg ((1155 MMiinn))
The planning process is very important to
any project. In this planning phase of a
benchmarking program, what activities would you
do and why?

DDOO PPhhaassee:: SStteepp 44
CCoolllleecctt aanndd AAnnaallyyzzee tthhee DDaattaa
• Determine the data collection
plan
• Collect and rank the data.
• Train BMK team in TQ
skills/tools as necessary

DDOO PPhhaassee:: SStteepp 55
DDeetteerrmmiinnee ppeerrffoorrmmaannccee ggaappss aanndd ssttrreennggtthhss
• Analyze performance gaps and
strengths
• Produce a benchmarking report

Team EExxeerrcciissee:: TThhee ddoo
PPhhaassee:: ((1155 MMiinn))
As with the previous exercise, define what activities
you would do in the do phase of the benchmarking
process.
_____________________________________________
How does this activity relate to the planning phase of
the process?
_____________________________________________

SSTTUUDDYY PPhhaassee:: SStteepp 66
TTaakkee aa SSyysstteemmss VViieeww
• Study the BMK Teams report in
a “broader context”
• Top Management (ESC) makes
the final recommendations

CCoommmmuunniiccaattee bbeenncchhmmaarrkkiinngg ffiinnddiinnggss
• Communicate widely and deeply
through the organization.
• Collect and analyze any
input/feedback

EEssttaabblliisshh ffuunnccttiioonnaall ggooaallss
• Write functional goals based on
best practices
• Have performance standards
and budget allocations reflect
new organizational goals

Team eexxeerrcciissee ffoorr tthhee
ssttuuddyy pphhaassee ((1155 mmiinn))
• Phase three (3) of our benchmarking process
deals with Study. What are we studying?
• Why are we studying these fact and data?___
• What will be the result of our study? How will
it help us to improve our company?_____

AACCTT PPhhaassee:: SStteepp 99
DDeevveelloopp aann aaccttiioonn ppllaann,, iimmpplleemmeenntt
pprroocceedduurreess aanndd mmoonniittoorr pprrooggrreessss
• Develop suggestions on how to
implement, measure and monitor
results
• Get top-level approval of the
plan
• Celebrate successes

AACCTT PPhhaassee:: SStteepp 1100
RReeccaalliibbrraattee
• Monitor the benchmark process
• Repeat the cycle...(1-10)

Team EExxeerrcciissee ffoorr aacctt
pphhaassee ((1155 MMiinn))
What action have we taken?
_____________________________
How does this phase relate to the study phase and
to the future of the benchmarking program?
______________________________________________
______________________________________________

Examples ooff BBeenncchhmmaarrkk
PPrroojjeeccttss
• “On-the-Job”
Training
• Hospital
• Hotel

OOnn--TThhee--JJoobb
TTrraaiinniinngg

WWhhaatt ttoo BBeenncchhmmaarrkk??
TThhee OOJJTT PPrroocceessss
Job Identification
Conduct of Task Analysis
Identification of Trainee Needs
Schedule of OJT
Preparation for OJT
Trainee Coaching
Review of OJT Program

WWhhaatt ttoo BBeenncchhmmaarrkk??
• Performance measures
– Cost of OJT per worker
– % trained on OJT
– % moved up the skills ladder
– Cost of wastage as % of sales revenue
– Cost of rework as % of sales revenue
– Changes in output per worker
– Changes in cycle time

WWhhoomm ttoo BBeenncchhmmaarrkk
• Criteria for Selection
– not more than 1,000 employees with a
turnover of $100 million or less
– Production, customer service,
maintenance, and security functions should
be included
– Structured OJT program
– Recommended by PSB or ITE

WWhhoomm ttoo BBeenncchhmmaarrkk
• Best Practice Companies
– Delifrance Singapore Pte Ltd
– Scotts Holding Ltd
– TIBS Motors Pte Ltd
– YCH Distripark Pte Ltd
• Sent questionnaire

KKeeyy FFiinnddiinnggss oonn OOJJTT PPrraaccttiicceess
• OJT System
• Trainer
Preparation
• Trainee
Coaching

Xerox Practices Changed Best Practices Found
Computerized system for L.L. Bean
picking warehouse orders
Seamless cylinder for copier
photoreceptor Canon
Product Marketing Procter Gamble
Service training practices IBM
Just-In-Time” methods Hewlett-Packard
Total Quality Management Toyota, Fuji Xerox
Billing Collection American Express
Employee Suggestion Milliken

BBeenncchhmmaarrkkiinngg
• Hospital program “Learning from the
Best”
• Learnt from the best practices of
leading organizations such as 5-star
hotels and airlines
– Accident and emergency cases
– Hot food

BBeenncchhmmaarrkkiinngg
• Leading hotel
• Benchmarked a guest’s first 10 mins
contact, the check-in process
• Benchmarked against leading U.S.
hotel chain

KKeeyyss ttoo SSuucccceessss
• Well-defined scope
• Stay within the scope
• Gain leadership concurrence
• Rigorous research to identify best
practices
• Know your performance
• Focus on improvements that will pay
and are visible

TThhee GGuuiiddaannccee DDooccuummeennttss::
• The step
• The input..
• Guidance Information
• The Output
• QA Checklist

TTeeaamm EExxeerrcciissee aanndd PPrreesseennttaattiioonn
• On the worksheet forms provided you are to
create a fictitious (make believe)
benchmark study.
• The steps of this study will include the
steps taken, the input-output of each step,
the results and the anticipated benefits.
• The Documented study will be presented to
management (the rest of the class) as you
would your own management... be prepared
to answer any questions.

CCoonncclluussiioonn......
• Benchmarking is only a “tool” that we
use to continually improve our
company...it is not the “end-result”
• To improve...we must measure
ourselves against a “benchmark”
• Benchmarking leads us to other
quality improvement tools...they all
must work together.

QQuueessttiioonnss??

Benchmarking Systems Approach

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