Week-10-Benchmarking.ppt

7/28/2019 Week-10-Benchmarking.ppt

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Total Quality Management - Spring 2010 - IUG 1

Total Quality Management

Week # 10

Benchmarking

Prepared by: Khalid DahleezFaculty of Commerce the Islamic University of Gaza

This material was collected from different sources


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Benchmarking

Benchmarking is the process of continually searching for the bestmethods, practices and processes, and either adopting or adaptingtheir good features and implementing them to become the best ofthe best.

Measuring your performance against that of the best-in-classcompanies, determining how the best-in-class achieve thoseperformance levels, and using the information as a basis for your owncompanys targets, strategies, and implementation.

Compare performance of an existing process against othercompanies best-in-class practices Determine how those companies achieve their performance

levels

Improve internal performance levels


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Why Benchmark?

To Obtain an External Perspective of What Is Possible

To Assist in Setting Strategic Targets

To Promote Improvements in Performance

To Establish a Competitive Edge

To Enhance Customer Satisfaction

To Reduce Costs

To Improve Employee Morale

To Achieve Quality Awards

To Survive


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Benchmarking in the Context of TQM

TQM Key principles include:

Comparisons with best practice

A Strong emphasis on meeting the needs ofthe customer (internal and external)

The importance of efficient, effectivebusiness processes

The need for continuous improvement

Enhances a TQM program


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Competitive

Industry leaders Top performers with

similar operatingcharacteristics

Functional

Top performers

regardless of industry Aggressive innovators

utilizing newtechnology

Internal

Top performerswithin company

Top facilitieswithin company

Best PracticeOverlap

BenchmarkingMethodology


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Benchmarking Framework

Measurement

Change

Review

Benchmarking Framework


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Mission

Critical

Processes

Critical Success

Factors

Benchmarking

Benchmarking processes or activities, which do not support any of these

statements, should be disregarded, as the benefits will be limited compared to

those that could be achieved by deploying resources to other areas.


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Types of Benchmarking

Comparison: (Partner Selection) Internal Best in Firm

Competitive Best in Industry

Functional

Generic

Form:

Performance Benchmarking Process Benchmarking

Strategic Benchmarking


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Selecting Benchmarking Partners

Benchmarking

Type

Internal

Competitor

Functional

Generic

Potential Benchmarking Partners

Comparable sites, branches, sections, departments

within the business

Within the same industry sector

Same function across all industry fields

All industry fields


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Performancebenchmarking enables managers to assesstheir competitive positions through product and servicecomparisons.

Performancebenchmarking usually focuses on elementsof price, technical quality, product or service features, speed,reliability, and other performance characteristics.

Reverse engineering, direct product or service comparisons,

and analysis of operating statistics are the primary techniquesapplied during performance benchmarking.

Performance Benchmarking


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Processbenchmarking focuses on discrete work processesand operating systems, such as the customer complaint

process, the order-and-fulfillment process, or the strategicplanning process.

Processbenchmarking seeks to identify the most effectiveoperating practices from many companies that performsimilar work functions.

Its power lies in its ability to produce bottom-line results. Ifan organization improves a core process, for instance, it canthen quickly deliver process improvement

Process Benchmarking


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Total Quality Management - Spring2010 - IUG 15

Critical Success Factors

Critical Success Factors (CSFs) Are the Key Indicators

That Inform Us That a Particular Task, Activity, Process,Event, Function, Service or Endeavour Is Successful

CSFs Are a Feature of All Levels of Business Activity;From the Company As a Whole Down to the Activities of

Individuals in It

How Will Success Feel?


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Benchmarking Critical Success Factors

Adopt, Adapt, and Advance: A well-designedperformance measurement and benchmark system isessential, but there are other critical success factors:

Senior management support; Benchmarking training for the project team;

Useful information technology systems;

Cultural practices that encourage learning;

Resource dedication - especially in the form of time,funding, and useful equipment.


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Strategicbenchmarking examines howcompanies compete and is seldom industry-focused. It roves across industries seeking to

identify the winning strategies that have enablehigh-performing companies to be successful in theirmarketplaces.

Strategicbenchmarking influences the longer-term competitive patterns of a company.Consequently, the benefits may accrue slowly.

Strategic Benchmarking


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Planning a Benchmarking Exercise

Principal Requirements for Success Strong Commitment From Senior Management

Willingness to Act on Any Major Opportunities for

Improvement Revealed by Benchmarking Resources

Staff Capable of Running a Benchmarking Project

Time for Employees to Spend on BenchmarkingActivities


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THE BENEFITS OF BENCHMARKING

Cultural Change

Benchmarking allows organizations to setrealistic, rigorous new performance targets,

and this process helps convince people ofthe credibility of these targets.

This tends to overcome the not invented

here syndrome and the were differentjustification for the status quo.


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Performance Improvement

Benchmarking allows the organization to definespecific gaps in performance and to select theprocesses to improve.

It provides a vehicle whereby products and servicesare redesigned to achieve outcomes that meet orexceed customer expectations.

The gaps in performance that are discovered canprovide objectives and action plans for improvementat all levels of the organization and promoteimproved performance for individual and groupparticipants.


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Human Resources

Benchmarking provides a basis for training.Employees begin to see the gap between what theyare doing and what best-in-class are doing.

Closing the gap points out the need for personnelto be involved in techniques of problem solving andprocess improvement.

Moreover, the synergy between organizationactivities is improved through cross-functionalcooperation.


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AT&T Benchmarking Process


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Xerox12-StepBenchmarkingProcess

Phase 1: Planning

1. Identify what to benchmark;

2. Identify comparative companies;

3. Determine data collection method & collect data.

Phase 2: Analysis

4. Determine current performance gap;

5. Project future performance levels.

Phase 3: Integration

6. Communicate finding and gain acceptance;

7. Establish functional goals.


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The Xerox 12-Step Benchmarking Process(continued)

Phase 4: Action

8. Develop action plans;

9. Implement specific actions & monitor progress;

10. Recalibrate benchmarks.

Phase 5: Maturity

11. Attain leadership position ;12. Fully integrate practices into processes.


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Attributes of Benchmarking Studies:

Success vs. Failure

Success FailureProcess 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 ExistingQuality 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


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ManagementsBenchmarkingChallengeCommit required resources to key projects;

Provide focused training / facilitation to projectparticipants;

Proactively manage the direction and momentum ofbenchmarking within the organization;

Create visibility of the benchmarking process;

Recognize benchmarking team efforts.

Documents

Week-10-Benchmarking.ppt