BENCH MARKING

By:
Anurag Gupta
IBS Kochi
Benchmarking is the search for
industry best practices that lead to
superior performance

by Robert Camp
The Evolution of Benchmarking
Evolved in the early 1950s, when W. Edward Deming
taught the Japanese the idea of quality control.

Example
Toyota Motor Corporations following the footsteps
of Ford Motor Corporation with the adaptation of the
Fords Just-in-case System into Toyotas Just-in-Time
System.

Term Benchmarking emerged in 1980s by ROBERT
CAMP, logistics engineer who initiated Xeroxs
benchmarking program.
Use of benchmarking worldwide continues to grow
since Robert Camp wrote the first book on
benchmarking in 1989.
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 the
organization.
Reduces cycle time as small or big tasks get done
faster.
Constantly redefines standards which must be
achieved to remain competitive.
Increases productivity.

Benchmarking process
Benchmark Practices
How to close the Gap
Improved Knowledge
Improved Practices
Improved Process
Employee participation
Organization
Communication
Management Commitment
Benchmark Gap
How much
Where
When
Benchmarking Standards
Benchmarking Process Model
Search
Observe
Analyze
Adapt
Plan
Steps in Bench Marking Process
1. Plan
Select the process
Form Team
Understand & document process
Establish performance measure
2. Search
Listing Criteria for partner selection
Conduct general / secondary research
Decide the level to Benchmark
Identify potential partners & contact

3. Observe
Questionnaire sent to partner
Telephone contact
Direct observation / site visit
4. Analyze
Sort information & data
Quality control information & data
Normalize data if necessary
Identify gaps in performance Level
Identify causes for gaps


5. Adapt
Identify improvement opportunities
Set target for improvement
Develop implementation plan, monitor the progress
Write final report

Types Of Benchmarking
Internal
External
Performance or Competitive
Functional
Generic
Strategic
Process


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 Works at Jamshedpur.
External Benchmarking
Comparison of organization functions and key
processes against external good practice
organization.

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.

Functional Benchmarking
Comparison of similar functions against external best
in any industry
Example
Hindustan Max GB Ltd , a pharmaceutical company,
benchmarking their maintenance function with that
of Tata Steel.

Generic Benchmarking
Comparison of functions which are generic in 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.

Strategic Benchmarking
Used where organizations seek to improve their
overall performance by focusing on specific
strategies or processes
Example
Benchmarking against organizations which have won
awards or some other distinctions
Process Benchmarking
Focus on specific operations or processes

Examples
In higher education - Enquiry Management, Enrolment
In Logistics - Delivery, Safety.
In hotels - Housekeeping, Customer Care.

Issues in Benchmarking
Finding suitable partners.
Difficulties in comparing data (50% of organizations
found this)
Resource constraints (Time, Finance and Expertise)
Staff resistance.

Thanks