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Benchmarking for Superior Performance (Xerox Benchmarking Methodology)

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Benchmarking is the process of continually searching for the best methods, practices and processes, and either adopting or adapting their good features and implementing them to become the “best of the best.” To become the best-in-class, organizations need to implement the right process to get there.

Based on the world renowned Xerox Benchmarking Process model pioneered by Robert C. Camp, this presentation deck covers the benefits of benchmarking, various types of benchmarking, identifying what to benchmark, and provides a detailed step by step guidance on how to systematically carry out a benchmarking project. It also includes useful tips on benchmarking, benchmarking etiquettes and the critical success factors.​

​LEARNING OBJECTIVES

1. Gain a broad understanding of the key concepts of benchmarking.
2. Learn how to identify, assess and implement various types of benchmarking projects to meet the your organization’s goals based on the Xerox Benchmarking model.
3. Gain awareness of the code of conduct for benchmarking and make preparations to get the most out of a site visit.
4. Define the critical success factors in benchmarking implementation.
5. Kick-start benchmarking projects that are aligned to your company’s strategic goals.

CONTENTS

Introduction to Benchmarking​
The Xerox Benchmarking Process
Step 1: What to benchmark?
Step 2: Whom to benchmark?
Step 3: Data collection
Step 4: Determine current performance “gap”
Step 5: Project future performance levels
Step 6: Communicate findings and gain acceptance
Step 7: Establish goals
Step 8: Develop action plans
Step 9: Implement actions and monitor progress
Step 10: Re-calibrate benchmarks
Benchmarking Roles and Responsibilities
Benchmarking Inspection Checklist (Toll-gate Review)
Benchmarking Etiquette
Benchmarking Site Visit
Benchmarking Pitfalls & Success

To download this complete presentation, please visit: http://www.oeconsulting.com.sg

Published in: Business

Benchmarking for Superior Performance (Xerox Benchmarking Methodology)

  1. 1. © Operational Excellence Consulting. All rights reserved. 1 Benchmarking for Superior Performance
  2. 2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives 1.  Gain a broad understanding of the key concepts of benchmarking. 2.  Learn how to identify, assess and implement various types of benchmarking projects to meet the your organization’s goals based on the Xerox Benchmarking model. 3.  Gain awareness of the code of conduct for benchmarking and make preparations to get the most out of a site visit. 4.  Define the critical success factors in benchmarking implementation. 5.  Kick-start benchmarking projects that are aligned to your company’s strategic goals.
  3. 3. © Operational Excellence Consulting. All rights reserved. 3 Outline 1.  Introduction to Benchmarking 2.  The Benchmarking Process 3.  Benchmarking Roles & Responsibilities 4.  Benchmarking Inspection Checklist 5.  Benchmarking Etiquette 6.  Benchmarking Site Visit 7.  Benchmarking Pitfalls & Success NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: http://www.oeconsulting.com.sg
  4. 4. © Operational Excellence Consulting. All rights reserved. 4 “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” – Sun Tzu The Art of War, 500 B.C. Introduction to Benchmarking
  5. 5. © Operational Excellence Consulting. All rights reserved. 5 Time Performance Continuous Improvement Performance Gap Customer Expectation Dilemma Introduction to Benchmarking
  6. 6. © Operational Excellence Consulting. All rights reserved. 6 Xerox Benchmarking Chronology Year Activities 1979 Benchmarking as a competitive strategy introduced 1981 U.S. and Japan manufacturing studies initiated 1982 Benchmarking in non-manufacturing units begins 1983 Benchmarking integrated as part of a “Leadership-Through- Quality” strategy 1984 Corporate-wide competitive benchmarking network formed 1984-89 Benchmarking application internalized 1989 Baldrige award winner 1990+ Benchmarking totally integrated at all levels Introduction to Benchmarking
  7. 7. © Operational Excellence Consulting. All rights reserved. 7 Xerox – Benchmarking Results §  Winner of the Baldrige award in 1989 §  78% decrease in the number of defects per 100 machines §  40% increase in product reliability (unscheduled maintenance) §  27% drop (nearly 2 hours) in service response time §  First in the industry to offer a 3-year product warranty §  “Leadership Through Quality” strategy as a means to drive continuous improvement Introduction to Benchmarking
  8. 8. © Operational Excellence Consulting. All rights reserved. 8 “Insanity is doing the same thing, over and over again, but expecting different results.” Albert Einstein Introduction to Benchmarking
  9. 9. © Operational Excellence Consulting. All rights reserved. 9 Exercise: True or False? 1.  Obtaining “metrics” (or “benchmarks”) is the most important facet of benchmarking. 2.  The SQA winners are always good organizations to participate in a benchmarking study. 3.  The first step in benchmarking study is data collection. 4.  The best studies are those that have well-known name organizations participating. 5.  The most important goal in benchmarking study is to select the right “target” organizations. Introduction to Benchmarking
  10. 10. © Operational Excellence Consulting. All rights reserved. 10 Why Benchmark? 1.  Productivity improvement 2.  Meeting customer requirements 3.  A goal-setting technique 4.  An on-going learning process Introduction to Benchmarking
  11. 11. © Operational Excellence Consulting. All rights reserved. 11 Benchmarking – With & Without Without Benchmarking With BenchmarkingVS Introduction to Benchmarking Source: Adapted from Benchmarking, Robert C. Camp Internally focused Concrete understanding of competition Not invented here Proactive search for change Few solutions Many options Evolutionary change New ideas of proven practices and technology Average of industry progress Business practice breakthrough Frantic catch up activity Superior performance
  12. 12. © Operational Excellence Consulting. All rights reserved. 12 Selecting Benchmarking Topics Back Burner Do It! Don’t Do It! Benchmarking Topics Low High Current Difficulty in Achieving Needed Performance Improvement High Low Impact of Performance Improvement Introduction to Benchmarking
  13. 13. © Operational Excellence Consulting. All rights reserved. 13 Objective of Benchmarking §  The primary objective of benchmarking is to understand those practices that will provide a competitive advantage; target setting is secondary Introduction to Benchmarking
  14. 14. © Operational Excellence Consulting. All rights reserved. 14 “Benchmarking is the search for industry best practices that lead to superior performance.” Robert C. Camp Introduction to Benchmarking
  15. 15. © Operational Excellence Consulting. All rights reserved. 15 Differences Between Approaches for Market Research, Competitive Analysis and Benchmarking Market Research Competitive Analysis Benchmarking Generic purpose Analyze industry markets, customer segments or product acceptance Analyze competitive strategies Analyze what, why and how well competition or leading companies are doing Usual focus Customer needs Competitive strategies Business practices which satisfy customer needs Application Products and services Marketplace and products Business practices as well as products Usually limited to How customer needs are met Marketplace activities Not limited; competitive, functional and internal benchmarking are used Information sources Customers Industry analysts, etc. Industry leaders as well as competitors Introduction to Benchmarking
  16. 16. © Operational Excellence Consulting. All rights reserved. 16 Four Phases of Benchmarking Phase 1: Planning Phase 2: Analysis Phase 3: Integration Phase 4: Action Benchmarking Process
  17. 17. © Operational Excellence Consulting. All rights reserved. 17 Benchmarking Process Steps 1. IDENTIFY WHAT IS TO BE BENCHMARKED 2. IDENTIFY COMPARATIVE COMPANIES 3. DETERMINE DATA COLLECTION METHOD AND COLLECT DATA 4. DETERMINE CURRENT PERFORMANCE “GAP” 5. PROJECT FUTURE PEROFMANCE LEVELS 6. COMMUNICATE BENCHMARK FINDINGS AND GAIN ACCEPTANCE 7. ESTABLISH FUNCTIONAL GOALS 8. DEVELOP ACTION PLANS 9. IMPLEMENT SPECIFIC ACTIONS AND MONITOR PROGRESS 10. RECALIBRATE BENCHMARKS v  LEADERSHIP POSITION ATTAINED v  PRACTICES FULLY INTEGRATED INTO PROCESSES Phase 1: PLANNING Phase 2: ANALYSIS Phase 3: INTEGRATION Phase 4: ACTION MATURITY Benchmarking Process Source: Business Process Benchmarking, Robert C. Camp
  18. 18. © Operational Excellence Consulting. All rights reserved. 18 Step 1: What to Benchmark? Identifying the Subject for Benchmarking Basic Question: §  Determine the significant area/activities that will improve performance and enable the business units to achieve operation vision and objectives Step 1: What to Benchmark?
  19. 19. © Operational Excellence Consulting. All rights reserved. 19 Selecting What to Benchmark Using the Process Model Approach §  What is supplied §  Sequence of work steps §  Best practices at each step §  What is delivered §  Performance measure Market Customer inquiries Problem resolution process Satisfied customers Percent customer repurchasing Produce Customer requirements Product development process Product features Unit manufacturing cost Deliver Orders Order picking process Order complete Percent accuracy Service Maintenance request Broken call (for parts) process Uptime increased % parts filled from service-person’s inventory Invoice Completed orders Billing process Billing quality Percent invoices error free Step 1: What to Benchmark? Source: Business Process Benchmarking, Robert C. Camp Inputs OutputsProcess Feedback Results
  20. 20. © Operational Excellence Consulting. All rights reserved. 20 Examples of Critical Success Factors Level 1 Level 2 Level 3 Manufacturing cost Assembly cost Maintenance cost Employee satisfaction Recognition Schemes to attract technical staff Quality Billing % of error-free invoices Customer satisfaction Call center Average call waiting time Innovation Product development % of ideas implemented Step 1: What to Benchmark?Step 1: What to Benchmark?
  21. 21. © Operational Excellence Consulting. All rights reserved. 21 Activity 1: Brainstorming what to benchmark 1.  Brainstorm ideas (subjects or topics) on what to benchmark. 2.  Group similar ideas together. 3.  Define a set of prioritization criteria to select the most important subjects or topics. 4.  List your ideas on the flip chart. 5.  Present your ideas to the class. Step 1: What to Benchmark? 15 mins Step 1: What to Benchmark?
  22. 22. © Operational Excellence Consulting. All rights reserved. 22 Summarize Purpose of Study §  A brief statement of the purpose of study §  The subject of study §  The measurement involved §  Indicate how output will help run the business Step 1: What to Benchmark?Step 1: What to Benchmark?
  23. 23. © Operational Excellence Consulting. All rights reserved. 23 Value of Information-Gathering Methods (5 = most favorable; 1 = least favorable) Selecting Methods of Conducting Research Mail Phone Visit Focus Group Amount of data 2 3 5 5 Accuracy of data 2 4 5 5 Sample size 5 3 2 3 Response rate 2 4 5 5 Cost per interview 5 4 2 3 Time requirements 2 5 2 1 Flexibility 1 4 5 1 Special skills 3 4 5 1 Administration 5 4 2 1 Step 3: Data Collection
  24. 24. © Operational Excellence Consulting. All rights reserved. 24 Example – Presenting Benchmarking Data Benchmark (“World-class” from another industry with similar activity) Best Competitor Industry Average Step 3: Data Collection
  25. 25. © Operational Excellence Consulting. All rights reserved. 25 COMPANY A COMPANY B COMPANY C Operational Definition Calculation Formula Operational Definition Calculation Formula Operational Definition Calculation Formula 1. Asset Utilization “Financial” Equipment Utilization Earned Hrs/total available hrs Machine uptime included No WIP (Manufacturing Time * 100% + Billable Engineering + Billable Retest + Billable QA ) / Total Time The measure of how efficiently a company asset is utilize (Total Available Hrs - Total Downtime)/Total Available Hrs Earned Hrs = Actual Starts/Pure UPH Pure UPH = 3,600/(Test Time + Index Time) 2. OEE Overall Equipment Effectiveness %In-use x % Consumption Efficiency Overall Equipment Efficiency (Availability% * Performance Efficiency%) – Retest% OEE is an all-inclusive measurement of semiconductor equipment and manufacturing OEE = Availability * Performance productivity. OEE approaches the problem of equipment manufacturing complexity with a (less yield) In-use = % of hrs used for testing fresh units methodology to deduce and implement permanent productivity improvement Consumption Efficiency = Actual UPH / Pure UPH 3. Availability “Equipment Availability” is the Total Time per week excludes Planned and Unplanned Downtime (168hrs – (PD+UD))/ 168hrs Total time excluded Scheduled and unscheduled downtime (Total Time – Downtime) / Total Time Total available time Equipment is available for use (Total Available Hrs – Total Equipment Downtime)/ Total Available Hrs For OEE calculation, we are using % In-use Partial Questionnaire Showing Comparison of Definitions and Formulas ILLUSTRATIVE Step 3: Data Collection
  26. 26. © Operational Excellence Consulting. All rights reserved. 26 1. Organize Data §  Do not… •  Over analyze the data (“analysis paralysis”) •  Be overly precise §  Most important is... •  To recognize the factor and its significance by estimating the relative value or effect of these unique factors Step 4: Determine the Current Performance Gap
  27. 27. © Operational Excellence Consulting. All rights reserved. 27 4. Check for Gap 0 20 30 40 50 Yesterday Today THEM US Tomorrow Future gap = 42% Current gap = 39% Step 4: Determine the Current Performance Gap
  28. 28. © Operational Excellence Consulting. All rights reserved. 28 Projection of Gap Years Summary Measure BIC Practice Your Practice Superior Performance Benchmark Gap Today End-Point Step 5: Project Future Performance
  29. 29. © Operational Excellence Consulting. All rights reserved. 29 Spider or Radar Chart M1 M6 M4 M5 M7 M3 M2M8 Total customer satisfaction (ultimate goal) Best of best (benchmark) Current performance (baseline) Step 5: Project Future Performance
  30. 30. © Operational Excellence Consulting. All rights reserved. 30 Guidelines for Organizing Analysis Information §  Executive summary •  Key results •  Conclusions •  Recommendations §  Study process •  Respondent selection •  Methods employed to gather data •  Analysis techniques Step 6: Communicate Findings & Gain Acceptance
  31. 31. © Operational Excellence Consulting. All rights reserved. 31 BENCHMARK PROJECTS IMPLEMENTED BENCHMARK PRACTICES FINDING INCORPORATED Mission Planning Principles Performance Goals Strategies Implementation Tasks Goal Setting, Action Planning Process & Relationship to Benchmarking Step 8: Develop Action Plan
  32. 32. © Operational Excellence Consulting. All rights reserved. 32 Ways of Implementing Benchmark Practices §  Line Management §  Project Team §  Process Manager §  Work Team Step 9: Implementing Action & Monitoring Progress
  33. 33. © Operational Excellence Consulting. All rights reserved. 33 Benchmarking Roles & Responsibilities §  Customers of benchmarking •  Functional managers •  Vice presidents •  Process owners §  Suppliers of benchmarking •  Corporate benchmarking competency •  Division benchmarking competency •  Benchmarking networks •  Functional benchmarking representatives Benchmarking Roles & Responsibilities
  34. 34. © Operational Excellence Consulting. All rights reserved. 34 Benchmarking Protocol Policy regarding benchmarking protocol should be communicated to all employees involved, prior to contacting external organizations. Guidelines should address the following areas: §  Misrepresentation – do not misrepresent your identity in order to gather information §  Information requests – a request should be made only for information your organization would be willing to share with another company §  Sensitive / proprietary information – avoid direct benchmarking of sensitive or proprietary information §  Confidentiality – treat all information as confidential Benchmarking Etiquette
  35. 35. © Operational Excellence Consulting. All rights reserved. 35 Site visit IS NOT “Industrial Tourism” Benchmarking Site Visit
  36. 36. © Operational Excellence Consulting. All rights reserved. 36 Sample Summary Processes A B C D E F G Senior executive leadership of quality efforts ++ ++ ++ ++ + - ++ Change management ++ ++ ++ ++ ++ - ++ Corporate identity and embedded values ++ ++ ++ ++ ++ = ++ Clear constancy of purpose in quality initiatives ++ ++ ++ ++ ++ = + Self-assessment as a business driver ++ ++ ++ ++ ++ + ++ Policy deployment ++ ? ++ -- ++ + = Explicit commitment to learning and training + ++ ++ ++ ++ + ++ Disciplined use of benchmarking (strategic & teams) ++ ++ ++ ++ ++ + ++ High performance work organizations + ++ + + + = = Use of common measures to reinforce focus + ? + ++ ++ = = ++ Significantly better than XYZ + Better than XYZ = Essentially equal to XYZ - Worse than XYZ -- Significantly worse than XYZ Benchmarking Site Visit
  37. 37. © Operational Excellence Consulting. All rights reserved. 37 Attributes of Benchmarking Studies: Success vs. Failure Success Failure Process Owner Involvement Customer Driven Objectives Linked to Strategic Plan Best Practices & Enablers Consider Cultural Attributes Disciplined Methodology Quantum Change Clear Project Life Cycle Integrated with Existing Quality Efforts Sponsorship Uncertain Amorphous Objectives No Strategic Integration Performance Metrics Only “Hard” Data Only Arbitrary / Casual Approach Incremental / No Change Keep Going and Going and ….. A la carte Program Benchmarking Pitfalls & Successes
  38. 38. © Operational Excellence Consulting. All rights reserved. 38 About Operational Excellence Consulting §  Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. §  The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. §  OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg
  39. 39. © Operational Excellence Consulting. All rights reserved. To download this presentation, please visit us at: www.oeconsulting.com.sg END OF PREVIEW

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