About UCI Applied Innovation:
UCI Applied Innovation is a dynamic, innovative central platform for the UCI campus, entrepreneurs, inventors, the business community and investors to collaborate and move UCI research from lab to market.
About the Cove @ UCI:
To accelerate collaboration by better connecting innovation partners in Orange County, UCI Applied Innovation created the Cove, a physical, state-of-the-art hub for entrepreneurs to gather and navigate the resources available both on and off campus. The Cove is headquarters for UCI Applied Innovation, as well as houses several ecosystem partners including incubators, accelerators, angel investors, venture capitalists, mentors and legal experts.
Follow us on social media:
Facebook: @UCICove
Twitter: @UCICove
Instagram: @UCICove
LinkedIn: @UCIAppliedInnovation
For more information:
cove@uci.edu
http://innovation.uci.edu/
2. Startup Difficulty
Forecasting the unknown is very difficult
The less information the higher the risk
Seek all the help and advice you can get
2
3. 3
The Wrong Assumptions by CEO's
Our idea/concept/product will win because
it is unique and covered by IP's
Marketing is nothing more than obtaining
a very small percentage in a growing market
Our company will beat out competitors because
we are 1st to market
There is little to learn from other companies
Comparing (Benchmarking) other companies
is a waste of time and effort and stifles innovation
4. 4
Benchmarking,
the Underutilized Measuring Tool
4
Benchmarking is a "must" for growth
What is Benchmarking?
Why Benchmark?
Who is Benchmarked?
How to get other company's Benchmarking data?
What performance factors to Benchmark
What are the methods of Benchmarking?
How will Benchmarking improve existing processes?
What not to do with Benchmarking
5. 5
Benchmarking,
the Underutilized Measuring Tool
5
What is Benchmarking?
A method of comparing a company's business processes
and Key Performance Indicators (KPI's) to industry best practices.
A method of comparing company's business processes
and KPI's to competitors.
A method of comparing company's business processes
and KPI's to other industries.
A marketing tool to find where competitors are not fulfilling
customers unfulfilled needs or wants
A method of validating your company's value proposition
6. 6
Benchmarking,
the Underutilized Measuring Tool
6
Why Benchmark?
Gap analysis - compare company's actual vs.
potential performance
To strengthen core competencies
To improve business processes
To achieve incremental performance gains
To achieve a sustainable competitive advantage
To provide a foundation for growth
To provide a foundation for growth
As part of a Strategic Plan – SWOT (Strength – Weakness – Operations
– Threats) analysis
Can be foundation for business and marketing plans
Pick a revenue level to define the organization to get there
7. 7
Examples of SWOT’s
Strengths Weaknesses
(What lies ahead)
Financial
Intellectual
Location
Customer service
Efficiency
Infrastructure
Quality
Staff
Management
Price
Delivery time
Cost
Capacity
Get to know your company
in depth
Relationships with customers
Brand strength
Local language knowledge
Ethics
Principles
Patents & IP
Strong brand names
Good reputation among customers
Cost advantages from proprietary know-how
Exclusive access to important resources
Favorable access to distribution networks
Time to Market
Board of Directors and/or Advisors
8. 8
Examples of SWOT’s
Opportunities and Threats
(What lies ahead)
Political/Legal
Market trends
Economic condition
Strategic alliances
Expectations of stakeholders
Get to know your company in
depth
Technology
Public expectations
Competitors and competitive actions
Bad PR
Global Markets
Regulations
9. 9
Benchmarking,
the Underutilized Measuring Tool
9
Why Benchmark?
• Gap analysis - compare company's actual vs. potential performance
• To strengthen core competencies
• To improve business processes
• To achieve incremental performance gains
• To achieve a sustainable competitive advantage
• To provide a foundation for growth
• As part of a Strategic Plan - SWOT analysis
• Can be foundation for business and marketing plans
• As a tool for "Thinking out of the box"
• As a breeding ground for innovation
• Quantum leaps (breakthroughs)
• To learn "how to" from other more experienced companies
• To determine what is needed to become a Best In Class
10. 10
Benchmarking,
the Underutilized Measuring Tool
10
Who should be Benchmarked?
• Employees
• Partners
• Competitors – Cornerstone
• A Roll Model worthwhile following
• Best in Class
• Larger Public companies – PEP example $25 - $100 million
11. 11
Benchmarking,
the Underutilized Measuring Tool
11
How to get other company's Benchmarking data?
From private Companies
• From their Customers
• From their Vendors/Suppliers – C
• Job applicant Interviews
• Focus Groups
• Roundtables
• Trade Shows
• Trade journals
• News Releases
• Internet
• Example –Bob G.
• Networking
• your accounting and law firms
• Investment Bankers
• Consultants
• From their Board of Directors
• Advisors (EIRS)
• Dunn and Bradstreet
• Google/Facebook
12. 12
Benchmarking,
the Underutilized Measuring Tool
12
How to get other company's Benchmarking data?
From public companies
• From Public company quarterly and yearly reports
• From analysts reports
• From Competitors– EM - Drives
13. 13
Benchmarking,
the Underutilized Measuring Tool
13
What performance factors to Benchmark – when needed
The Surface Factors
Quality as measured by customer
Time to produce product/service
Cost of product/service
Price of product/service
Financial data
Revenue
Gross Margin
Profit
The Deep Dive Factors -in time
Cash conversion cycle
Days Outstanding
RFQ capture rate
Time to deliver prototypes/1st articles
Sales per employee – Yelp
Added value per employee
Organizational arrangements
Competitors customer lists
Strategic plans
Productivity and Efficiency
Analytics
14. 14
Benchmarking,
the Underutilized Measuring Tool
14
Formatting your Benchmark
Comparison to Competition
Profit Gross Margin
Operating cost Marketing Cost R&D cost
Inventory level Hiring – Great to be a leader
PP&E level
15. 15
$ million Change
Company Ticker Product Q1-09 Q2-07 to Q1-09
AVX Corp AVX Diversified Electronics $271.81 -29.1%
Checkpoint Systems Inc CKP Security & Protectuion Service $158.95 -18.8%
Coherent Inc COHR Scientific & Technical Instruments $105.40 -26.1%
CTS Corp CTS Diversified Electronics $118.10 -30.4%
Dolby Laboratories Inc DLB Diversified Electronics $204.10 70.7%
Littelfuse Inc LFUS Industrial Elecrical Equipment $84.40 -34.6%
Methode Electronics Inc MEI Diversified Electronics $89.80 -28.3%
MTS Systems Corp MTSC Scientific & Technical Instruments $107.70 2.4%
National Instruments NATI Technical & Systems Software $157.80 -12.1%
OSI Systems Inc OSIS Semiconductor Equipment 7 Materials $144.10 -5.7%
PLEXUS Corp PLXS Printed Circuits Assembly $388.90 2.4%
Rogers Corp ROG Plastic & Printed Circuit material $65.50 -33.1%
Scansource Inc SCSC Computer Wholesale $389.80 -25.7%
Trimble Navigation Ltd TRMB Scientific & Technical Instruments $289.00 -11.8%
TTM Technologies INC TTMI Printed Circuit Boards $149.00 -8.0%
Peer Group Max $389.80 70.7%
Peer Group 75% $237.96 -6.9%
Peer Group Average $181.62 -12.5%
Peer Group Median $158.38 -12.3%
Peer Group 25% $106.55 -28.7%
Peer Group Min $65.50 -34.6%
MFLEX MFLX FPC & Assembly $174.10 67.2%
MFLEX % Rank 66.6% 99.6%
Revenue
MFLEX – Companies in Base
— Change During Recession —
17. 17
Benchmarking,
the Underutilized Measuring Tool
17
Benefits of Performance comparison charts
Normalizing the data allows comparison of different size companies
Shows position of your company in field of companies
Shows how your position changes from one time period to the next
By charting many parameters you can focus on the ones needing improvement
18. 18
Name Price Added
Value
Quality Technology Assembly
MFS L K K K J
Global L J J J J
Nitto J J L L J
Foxcon
n
L L J J L
How does M-FLEX compare to the Flex competitors:
How does M-FLEX compare to the EMS competitors:
Name Price Added
Value
Quality Technology Flex
FoxConn L L J J K
Pemstar L J J J J
Flextronics K L J J J
19. 19
Benchmarking,
the Underutilized Measuring Tool
Trends derived by plotting one financial parameter versus another
often exhibits a company's strategy
often exhibits a company's barrier
Benefits of graphic comparisons
By selecting appropriate financial parameters in a graph
the relative position of your company in the field of competitors is evident
there is an indication of what your company needs to change to grow
20. 20
Benchmarking,
the Underutilized Measuring Tool
20
How will Benchmarking improve existing processes?
• Quality improvement
• Cycle time reduction – S
• Learn industries best practices
• Align strategic planning
• Competitor analysis
• Customer satisfaction determination
• Performance measurement
• Reward and recognition
• Organization restructuring
• Create Value
• Marketing research
• Partnership sources
• M&A sources
• Create Innovation
• Evaluate company's Barriers
• Needed for Strategic Planning
21. 21
Benchmarking,
the Underutilized Measuring Tool
21
What not to do with Benchmarking
Settle for the median or average level
Should not be used to copy competitors (2nd best strategy)
Wrong Model – P & C
22. 22
Summary
Benchmarking is a method of comparing performance to others
There are many parameters, other than Sales and profit, to Benchmark
Benchmarking can use graphic and analytical methods of comparison
Benchmarking is a source of productivity and profit improvement
Management learning and experience accelerates by Benchmarking
Benchmarking teaches you what to do and what not to do
If growth is your plan, Benchmarking is a must
Where to start
23. Dick Dadamo
dickd@cox.net
Dadamo Small Business Observer
Startup Knowledge Base
www.richarddadamo.com
Reservoir information “You Know I Am
There”
Time Management
Advisory Board
23