Benchmarking

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Why & Why Not?

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Benchmarking

  1. 1. Benchmarking Why & What to do? Anand Subramaniam
  2. 2. <ul><li>“Opportunities multiply as they are seized.&quot; </li></ul><ul><ul><li>- Sun Tzu </li></ul></ul>
  3. 3. Highlights <ul><li>Overview </li></ul><ul><li>Benchmarking Steps </li></ul><ul><li>Sample Documents </li></ul>
  4. 4. Overview
  5. 5. <ul><li>“ 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 ”. </li></ul><ul><ul><li>- Source - APQC </li></ul></ul>What is Benchmarking?
  6. 6. Benchmarking is not.. <ul><li>Just a “study” </li></ul><ul><li>Quick and easy </li></ul><ul><li>“ Number crunching” </li></ul><ul><li>Spying or espionage </li></ul><ul><li>Only Comparative Analysis </li></ul><ul><li>Just “copying” or “catching up” </li></ul><ul><li>Site briefings and industrial tourism </li></ul><ul><li>A process improvement tool or continuous improvement effort separate or apart from the organisation’s mission, goals, and objectives </li></ul>
  7. 7. An ongoing process.. <ul><li>Understand your organisation and processes performed </li></ul><ul><li>Compare processes, practices, and results: </li></ul><ul><ul><li>Inside and outside your organisation </li></ul></ul><ul><ul><li>With world-class organisations </li></ul></ul><ul><ul><li>Inside your industry or functional area </li></ul></ul><ul><ul><li>Outside your industry or functional area </li></ul></ul><ul><li>It supplements any existing continuous improvement system in place </li></ul><ul><li>It motivates your organisation or functional area to take action to match/exceed the best </li></ul>
  8. 8. Types <ul><li>Internal Benchmarking </li></ul><ul><li>Competitive Benchmarking </li></ul><ul><li>Process Benchmarking </li></ul><ul><li>Strategic Benchmarking </li></ul>
  9. 9. Why Benchmark.. <ul><li>Reduce costs </li></ul><ul><li>Increase productivity </li></ul><ul><li>Changing customer needs </li></ul><ul><li>Provide a sense of urgency </li></ul><ul><li>Develop and implement strategic goals </li></ul><ul><li>Create a better understanding of the industry </li></ul><ul><li>Establish realistic actionable plans, goals, and objectives </li></ul><ul><li>Encourage striving for excellence and promotes “out of the box” creative thinking </li></ul>
  10. 10. Success Criteria <ul><li>Choose the right partner </li></ul><ul><li>Senior leadership support </li></ul><ul><li>Agree to a code of conduct </li></ul><ul><li>Know your own process first </li></ul><ul><li>Verify the results of implementation </li></ul><ul><li>Choose and empower the right teams </li></ul><ul><li>Be committed to implement the results </li></ul><ul><li>Do the study that will give high value in return </li></ul><ul><li>Ensure benchmarking efforts are manageable </li></ul><ul><li>Test adaptability of practices and enablers </li></ul>
  11. 11. Some Common Mistakes <ul><li>Insufficient homework </li></ul><ul><li>Scope parameters too broad </li></ul><ul><li>Wrong benchmarking partners </li></ul><ul><li>Leaving your own process unexamined </li></ul><ul><li>Ignoring comparisons outside your industry </li></ul><ul><li>Failure to follow up and implement findings </li></ul><ul><li>Lack of management commitment / support </li></ul><ul><li>Metrics vs. processes (targeting the results instead of the enablers) </li></ul>
  12. 12. Benchmarking Steps
  13. 13. Process Overview Best Practice picture Improvement Plans Implemented improvements! As-Is picture Process Maps KPIs, Performance data Current Practices Scope Best Practice features Best Practice performance data Gap Analysis 1 Gap Analysis 2 Comparisons
  14. 14. Process Mapping Select the process Get the right people together Establish process boundaries List steps, activities and decisions Map the “as-is” process Simplify the process Collect Data Is the process stable? No Yes Is it capable? No Yes Perform root cause analysis Map and implement the new process Collect Data Is the process stable? Perform root cause analysis Is it capable? No Yes Yes Yes Benchmark the process Institutionalise the process
  15. 15. “The Big Picture” - Plan <ul><li>Identify customers </li></ul><ul><li>Determine customer essential factors and measure level of satisfaction </li></ul><ul><li>Identify core processes that impact the above factors </li></ul><ul><li>Prioritise and select the processes that have the greatest impact </li></ul><ul><li>Determine whether benchmarking is appropriate </li></ul><ul><li>Identify resources </li></ul><ul><li>Communicate findings / update steering committee </li></ul>
  16. 16. Scope <ul><li>Form benchmarking team </li></ul><ul><li>Document the process </li></ul><ul><ul><li>Identify the focus area </li></ul></ul><ul><ul><li>Identify the essential factors for the area </li></ul></ul><ul><ul><li>Develop measures for these factors </li></ul></ul><ul><li>Establish the scope of benchmarking study </li></ul><ul><li>Develop final purpose statement </li></ul><ul><li>Brainstorm criteria for benchmarking partners </li></ul><ul><li>Formulate options for data collection </li></ul><ul><li>Communicate findings </li></ul>
  17. 17. Collect Information <ul><li>Strategy for data collection </li></ul><ul><li>Secondary research </li></ul><ul><ul><li>Sources of data used in data collection effort </li></ul></ul><ul><ul><li>Secondary research steps </li></ul></ul><ul><ul><li>The logic of secondary research </li></ul></ul><ul><ul><li>Research for best practices </li></ul></ul><ul><ul><li>Assessing benchmarking partners’ information from secondary research </li></ul></ul><ul><li>Evaluate results and identify potential partners </li></ul><ul><ul><li>Partner profile </li></ul></ul><ul><ul><li>Contact and screening </li></ul></ul><ul><li>Develop data collection instruments </li></ul><ul><ul><li>surveys </li></ul></ul><ul><ul><li>Site visits </li></ul></ul><ul><ul><li>Data collection instruments </li></ul></ul>
  18. 18. Analyse Data <ul><li>Compare your current performance data with your partner’s data </li></ul><ul><li>Identifying Gaps </li></ul><ul><li>Formulate Implementation Strategy </li></ul><ul><li>Produce Final Report </li></ul>
  19. 19. Adapt Findings <ul><li>Develop the plan </li></ul><ul><li>Implement the plan </li></ul><ul><li>Monitor and report progress </li></ul><ul><li>Recalibrate and recycle </li></ul>
  20. 20. Sample Documents
  21. 21. Using PDCA Cycle
  22. 22. Checklist <ul><li>Can your team clearly state the specific goals (End State) of the reengineering study and benchmarking effort? </li></ul><ul><li>Does your team have the management support needed, to continue the reengineering study and the benchmarking effort? </li></ul><ul><li>Have you estimated the resource requirements needed to do a benchmarking effort within the framework of your reengineering study? </li></ul><ul><li>Do you have the needed resources to do a benchmarking effort within the framework of your reengineering study? </li></ul><ul><li>Has your team become totally familiar with the topic of the benchmarking effort? </li></ul><ul><li>Has your team completed the process maps for the process (es) identified for benchmarking? </li></ul><ul><li>Has your team completed all measurement for the process (es) identified for benchmarking? </li></ul>
  23. 23. Project Schedule
  24. 24. Process Analysis <ul><li>Waiting time </li></ul><ul><li>Delayed approvals </li></ul><ul><li>Unnecessary red tape </li></ul><ul><li>Rework, Sloppy work </li></ul><ul><li>Moving things and people </li></ul><ul><li>Unread documents / memos </li></ul><ul><li>Long chains of approval & command </li></ul>
  25. 25. Identify Waste <ul><li>Customer delays </li></ul><ul><li>Delayed response times </li></ul><ul><li>Excessive “transition” time </li></ul><ul><li>Queuing time; moving time </li></ul><ul><li>Redundant checking; re-checking </li></ul><ul><li>Repeated meetings and phone calls for coordination </li></ul>
  26. 26. Questionnaire <ul><li>How do you define this process? Please describe </li></ul><ul><li>What resources are required to support this process? </li></ul><ul><li>Is there a flow chart for this process? </li></ul><ul><li>What is the measure of quality for the process? </li></ul><ul><li>What are the criteria that you use to define excellence in process performance? </li></ul><ul><li>What process improvements have given you the best return in performance improvements? </li></ul><ul><li>What lessons have you learned that would be valuable to pass on? </li></ul><ul><li>Have you researched any new technologies for future implementation? If yes, please explain. </li></ul><ul><li>What company, excluding yours, do you believe is the best in performing this process? </li></ul>
  27. 27. Focus On.. <ul><li>Process & Outcomes Linkage </li></ul><ul><li>Process Measurement and Metrics </li></ul><ul><li>Process Empowerment; Process Teams </li></ul><ul><li>Process Owners; Organisation Structure </li></ul><ul><li>Process Mapping; Process Benchmarking </li></ul><ul><li>Process Transfer; Process Implementation </li></ul><ul><li>Process Improvement & Process Innovation </li></ul><ul><li>Change Mgmt. and Continuous Improvement </li></ul>
  28. 28. Tips <ul><li>Think “outside the box” </li></ul><ul><li>Pay importance to Change Management </li></ul><ul><li>Use process mapping & process management </li></ul><ul><li>Focus should be “Enterprise-Wide” (all functions & processes ) on Waste Elimination (non value add) </li></ul><ul><li>Create a Process Measures Database – for KPIs, Gap Analysis, Best Practices </li></ul><ul><li>Organise an Improvement System, not just an Accountability System </li></ul><ul><li>Create an Empowerment System at all levels, for all employees, with authority, time, resources, measures of performance. </li></ul>
  29. 29. <ul><li>“ In the end, everything is a gag.&quot; </li></ul><ul><ul><li>- Charlie Chaplin (1889-1977 </li></ul></ul>
  30. 30. <ul><li>Good Luck </li></ul><ul><li>http://www.linkedin.com/in/anandsubramaniam </li></ul>

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