UNIT-4Bench marking. Need, Advantages, Limitations, Levels and Types of Benchmarking and process of benchmarking . Quality Function Deployment. Definition, Benefits and Process of QFD. Failure Mode and Effect Analysis. Explanation Examples and Steps in FMEA. ISO 900, ISO 14000 .
BenchmarkingBenchmarking is defined as” 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.”
Evolution of BenchmarkingBenchmarking is not a new concept. The practice of benchmarking can be seen in early 1800s when a New England industrialist, Francis Lowell travelled to England to study manufacturing at the best British factories.
Reasons for Benchmarking To develop strengths and reduce weakness To achieve business and competitive objectives. It is a powerful and effective tool when used for right reasons.
Advantages of bench marking It promotes a thorough understanding of the company’s own process. It involves adaption of the practices of superior competitions. It helps in identifying non value added activities. It enables comparison of performance measures in different dimensions. It focuses on performance measures and not on products. It helps organizations to set realistic goals
It allows organization to define specific gaps in performance. It provides a basis for training human resources.
Limitations Best in class performance is a moving target. Benchmarking is not a panacea It is not instant
Why benchmarking fails? If employees fail to get involved If process improvement is not related to competitive positioning Gathering data before clearly understanding the firm’s process. If assumed benchmarking as just one time process If the scope of companies studied is narrow. If the set goals do not bridge the gap between what is and what can be If they do not empower employees to achieve improvements If benchmarking is not perceived to process improvement.
Levels of Benchmarking Internal benchmarking Competitive benchmarking Non-competitive benchmarking -related process in the industry with a firm -a related process in a different industry -an unrelated process in a different industry World-class benchmarking
Types of benchmarking1. Performance benchmarking or operational benchmarking.2. Process benchmarking or functional benchmarking.3. Strategic benchmarking.
Areas to benchmark1. Customer service levels2. Inventory management3. Inventory control4. Purchasing5. Billing and collection6. Purchasing practices7. Quality process8. Warehousing and distribution9. transportation
Guidelines to benchmarking Do not go on a fishing expedition Use company people Exchange information Legal concerns Confidentiality
Four Phases of Benchmarking Planning Analysis Integration Action