CH-9

Benchmarking

Chapter

9
9-1

Benchmarking

Copyright 2010, G Nagalingappa, Manjunath V S

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Introduction
Benchmarking best industry practices is one of the popular quality management methodologies used by organizations all over the world. Xerox was the first organization which initiated benchmarking

concept and it went on to win Malcolm Baldrige National Quality

Award. Many other organizations have used benchmarking as a tool for

quality and productivity improvement.

Cont.
Copyright 2010, G Nagalingappa, Manjunath V S

9-2

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Benchmarking
Is the systematic & continuous process of determining what the best performances & underlying skills of leading are in their of excellence, & based on this, of stimulating the organization's own latent capabilities for excellent performance at all organizational levels. (Camp). Benchmarking is an important strategic tool of total quality management (TQM). Benchmarking enhances transparency and performance.
9-3 Total Quality Management
Text and Cases

Copyright 2010, G Nagalingappa, Manjunath V S

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Benchmarking

Organizations current performance

Performance of best companies or industry leaders

Adaptation from learning

Best in the class performance

Copyright 2010, G Nagalingappa, Manjunath V S

9-4

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Types of Benchmarking
1. 2. 3. Competitive benchmarking: product or services of a competitator. Generic benchmarking: evaluating process or business function. Strategic benchmarking: long term strategies, approaches to better

performance. 4. 5. 6. Process benchmarking: specific critical process improvement. Functional benchmarking: functional areas to improve performance. Internal benchmarking: business units or within department.

7.
8.

External benchmarking: learn form other organization.

International benchmarking: best practices outside the country.
Copyright 2010, G Nagalingappa, Manjunath V S

9-5

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Reasons for Benchmarking

1. Learning from best practices from any industry and incorporating them
for improvement 2. Helping an organization to understand its current performance

3.
4. 5.

Encouraging for continuous improvement projects

Improved customer satisfaction Improves competitiveness

6.
7. 8.

Enhances productivity
Helps in thinking out of box Stimulates motivation among the employees.
Copyright 2010, G Nagalingappa, Manjunath V S

9-6

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Deciding what to Benchmark?

Benchmarking can applied to any business process or function of the organization.

Process of Benchmarking
Deciding what to benchmark

Understanding current performance

Planning

Studying others

Learning from the data

Using the findings for improvements

Cont.
Copyright 2010, G Nagalingappa, Manjunath V S

9-7

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Xerox 10-step Process of Benchmarking Planning

1. Identify benchmark subject 2. Identify benchmark partner 3. Determine data collection method and collect data

Analysis
4. Determine competitive gap 5. Project future performance

Integration
6. Communicate results 7. Establish functional goals

Action 8. Develop action plans

9. Implement plans and monitor results 10. Recalibrate benchmarks
Copyright 2010, G Nagalingappa, Manjunath V S

9-8

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Kaizen
Kaizen means improvement.

The Kaizen strategy is the single most important concept in Japanese

management. It is the key to Japanese competitive success. Kaizen The Definition Kaizen (Ky ' zen) is a Japanese term that means continuous improvement, taken from words 'Kai', which means continuous and 'zen' which means

improvement.

Copyright 2010, G Nagalingappa, Manjunath V S

9-9

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books

CH-9

Benchmarking

Kaizen-umbrella
l l l l l l l l

Customer Orientation TQC Robotics QC Circles Suggestion Systems Automation

l l l l l l l l

Kanban Quality Improvement Just-In-Time Zero Defects Small Group Activities Cooperative Labour Management Relations Productivity improvement New Product Development

Discipline in the work place TPM

Copyright 2010, G Nagalingappa, Manjunath V S

9-10

Total Quality Management

Text and Cases

G Nagalingappa, Manjunath V S

Excel Books