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Dr.K.Baranidharan

Present by

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RECOGNITION/REWARD/ PERFORMANCE

APPRAISAL

Presented by

Dr.K.Baranidharan

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ECE

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BENCH MARKING

http://images.google.co.in/imgres?imgurl=http://www.bygirlsforgirls.org/2002/images/anorexia.jpg&imgrefurl=http://www.bygirlsforgirls.org/2002/eatingconcernsa.html&h=340&w=225&sz=32&hl=en&start=5&tbnid=nCzJ-4aCFV7HCM:&tbnh=119&tbnw=79&prev=/images?q=girl+looking+into+mirror&gbv=2&hl=en

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The word benchmark is a reference ormeasurement standard used forcomparison. Benchmarking is the process of

determining who is very best, who setsthe standard, and what that standard is. Benchmarking is a systematic method by

which organisations can measurethemselves against the best industrypractices.

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Measuring an organisations performanceagainst that of best-in-class companies,determining how the best-in-class achievedthose performance level. It is a tools for continuous improvement. The process of identifying, understanding,and adapting outstanding practices andprocesses from organisations anywhere in the

world to an organisation to improve itsperformance.American Productivity andQuality Centre (APQC)

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Benchmarking is the search forindustry best practices that lead to

superior performance

by Robert Camp

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Benchmarking

Valuable TQM tool which accomplishes objectives of

customer satisfaction and continuous improvement.

Motivates an organization & fosters a new in-depth

understanding about the functioning of theorganization.

Reduces cycle time as small or big tasks get done

faster.

Constantly redefines standards which must be

achieved to remain competitive.

Increases productivity.

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OBJECTIVE

To determine what and whereimprovements are called for

To analyze how other organizationsachieve their high performance

levels, and

To use this information to improve

performance.

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Purpose of Benchmarking

Comparing an organizations performance

to the best organizations performance

Comparing an organizations business

process with similar process

Comparing product and services

Identify the best practices to implement Projecting trends

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The Evolution of Benchmarking

Evolved in the early 1950s, when W. EdwardDeming taught the Japanese the idea of

quality control.

Example

Toyota Motor Corporations following the

footsteps of Ford Motor Corporation with theadaptation of the Fords Just-in-case System

into Toyotas Just-in-Time System.

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Term Benchmarkingemerged in

1980s byROBERT CAMP, logisticsengineer who initiated Xeroxs

benchmarking program.

Use of benchmarking worldwide

continues to grow since Robert

Camp wrote the first book onbenchmarking in 1989.

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Benchmarking Process Model

Search

Observe

Analyze

Adapt Plan

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Steps in Bench Marking Process

1. Plan

Select the process

Form Team

Understand & document process

Establish performance measure

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2. Search

Listing Criteria for partner selection

Conduct general / secondary

research

Decide the level to Benchmark

Identify potential partners & contact

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3. Observe

Questionnaire sent to partner

Telephone contact

Direct observation / site visit

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4. Analyze

Sort information & data

Quality control information & data

Normalize data if necessary

Identify gaps in performance Level

Identify causes for gaps

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5. Adapt

Identify improvement

opportunities

Set target for improvement

Develop implementation plan,

monitor the progress

Write final report

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Customer service levels

Inventory management

Inventory control

Purchasing

Billing and collection

Purchasing practices

Quality process

Warehousing and distribution

Trans ortation

AREAS TO BENCHMARK

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Types Of Benchmarking

Internal

External

Performance or CompetitiveFunctional

Generic

StrategicProcess

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Internal Benchmarking

Comparison of similar functions in different

operating units within the organization

Example

Tata Steels Colliery divisions benchmarking

their maintenance practices with that of the

Maintenance division inside the Steel Worksat Jamshedpur.

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External Benchmarking

Comparison of organization

functions and key processes

against external good practice

organization.

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Performance or Competitive

Organizations using performance

measures to compare themselves against

similar organizations

Example

FMCGs comparing with each other for

Market share, Retention rates, profits,costs.

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Functional Benchmarking

Comparison of similar functions against

external best in any industry

Example

Hindustan Max GB Ltd , a

pharmaceutical company, benchmarkingtheir maintenance function with that of

Tata Steel.

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Generic Benchmarking

Comparison of functions which are genericin nature in any industry

Examples

Hospital in the U.S. routinely benchmark

their patient management against hotels

guest management.

Airlines benchmark their customers

service with 5 star hotels.

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Strategic Benchmarking

Used where organizations seek to

improve their overall performance by

focusing on specific strategies or

processes

Example

Benchmarking against organizationswhich have won awards or some other

distinctions

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Process Benchmarking

Focus on specific operations or processes

Examples In higher education - Enquiry

Management, Enrolment

In Logistics - Delivery, Safety.

In hotels - Housekeeping, Customer Care.

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Issues in Benchmarking

Finding suitable partners.

Difficulties in comparing data (50%

of organizations found this)Resource constraints (Time, Finance

and Expertise)Staff resistance.

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Benchmarking Tools

Matrix technology

Comparison tables

Graphs: Pie chart, Bar chart /Histogram

SWOT analysis Potential/resources-analysis

Price/performance ratio

Potential analysis

Life cycle analysis

market growth/market share portfolio

http://en.wikipedia.org/wiki/Histogramhttp://en.wikipedia.org/wiki/Histogramhttp://en.wikipedia.org/wiki/Pie_charthttp://en.wikipedia.org/wiki/Bar_charthttp://en.wikipedia.org/wiki/Histogramhttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/Price/performance_ratiohttp://en.wikipedia.org/wiki/Potential_analysishttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Market_growthhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Market_growthhttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Potential_analysishttp://en.wikipedia.org/wiki/Potential_analysishttp://en.wikipedia.org/wiki/Price/performance_ratiohttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/Histogramhttp://en.wikipedia.org/wiki/Bar_charthttp://en.wikipedia.org/wiki/Pie_chart

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market attractiveness

Portfolio attractiveness customer

Technology/resource strength

Market position

Contribution margin

customer satisfaction portfolio

Revenue share

Spider web diagram

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Benefits of Benchmarking Improves organizational quality

Leads to lower cost Creates buy-in for change

Exposes employees to new ideas

Broadens organizations perspective

A catalyst for learning

Increase employee satisfaction

Test the internal operating target

Raise the level of potential performance

Sharing of best practices

Understanding world-class performance in-depth

Encourage and stimulate innovation

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Pitfalls and Criticisms ofBenchmarking The most persistent criticism of

benchmarking comes from the idea ofcopying others.

Benchmarking isnt very helpful if it isused for processes that dont offer much

opportunity for improvement.

Benchmarking is also not a substitute for

innovation

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Disadvantages of Benchmarking

Increase the diversity ofinformation so the potential for

information overload

May reduce managerial motivation

when comparing with a better

resourced rival Confidentiality of data may be a

risk

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EjemplosXerox, Hewlett Packard, Ford y General

Motors

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Dr.K.Baranidharan

THANK YOU