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 enchmarking
enchmarking 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 ³best of the best.´

Use benchmarking both for comparison of performance as well as to

understand the potential for improvement

ow is benchmarking used?
‡ ompare performance of an existing process against other
companies¶ best-in-class practices
‡ etermine how those companies achieve their performance
levels
‡ mprove internal performance levels ¦
a    
ompetitive enchmarking
Functional enchmarking
nternal enchmarking
Product enchmarking
Process enchmarking
est Practices enchmarking

trategic enchmarking
Parameter enchmarking

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hecklist
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å
elect process and define defect and opportunities
å
easure current process capability and establish
goals
å Understand detailed process that needs
improvement

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å putline industries/functions which perform your
process
å Formulate list of world class performers
å ontact the organization and network through to
key contact

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å esearch the organization and ground yourself
in their processes
å evelop a detailed questionnaire to obtain
desired information
å
et up logistics and send preliminary documents
to organization

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å Feel comfortable with and confident about
your homework
å Foster the right atmosphere to maximize
results
å onclude in thanking organization and ensure
follow-up if necessary

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å eview team observations and compile report of
visit
å ompile list of best practices and match to
improvement needs
å
tructure action items, identify owners and
move into mprove phase

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å eport out to business management and 6ı

leaders
å Post findings and/or visit report
å nter information on benchmarking project
database

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åPolicy regarding benchmarking protocol should be
communicated to all employees involved, prior to
contacting external organizations. uidelines should
address the following areas:
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enchmarking ompliance |`
 enchmarking ompliance
å voiding inappropriate communication and
contacts with competitors.

å ever propose, enter, or engage in a discussion

related to any agreements with a competitor to fix
prices, in terms or conditions of sale, costs, profit
margins, or other aspects of the competition.

å eep communications with competitors to a

minimum ± make sure there is a legitimate
business reason for all such communications
|¦
 enchmarking
ù& he process of identifying and learning from best
practices anywhere in the world is a powerful tool in the quest
for continuous improvement.

ù& he systematic process of searching for best practices,

innovative ideas, and highly effective operating procedures that
lead to superior performance.

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 enchmarks & enchmarking:

anaging hange
‡ 
     can be described as
the process of seeking out and studying the best internal and
external practices that produce superior performance.
â on¶t reinvent what others have learned to do better!
â orrow shamelessly!
â dopt, adapt, advance!
â mitate creatively!
â dapt innovatively!

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 Process enchmarking
‡
  !  focuses on discrete work processes
and operating systems, such as the customer complaint
process, the order-and-fulfillment process, or the strategic
planning process.
‡
  !  seeks to identify the most effective
operating practices from many companies that perform
similar work functions.
‡ ts power lies in its ability to produce bottom-line results. f
an organization improves a core process, for instance, it can
then quickly deliver process improvement

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‡ 2

represents a versatile process management
tool that helps organizations identify and understand what
constitutes best operating practices.
‡ 2

are the operating statistics or measures that
define the achievement level of any given practice or system.
‡ hese are not in and of themselves enough since they
provide J
J into the root causes of performance
differences.
‡   
  

reflects full process or
system capabilities. Performance indicators may include
dimensions such as cost, productivity, cycle time, yields,
error rates, waste and turnover. |ü
 esigning
uccessful enchmarks:
ffective Performance enchmarks eflect the
ost mportant
pperating imensions of a usiness Process,
ystem, or Function.

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  enchmark esign rchitecture
Ma   in designing a performance
benchmark system is to 


  that will
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 management to achieve the organization¶s
strategic objectives.

Ma    in designing a benchmark

architecture requires managers to 


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 describing performance
measurement in your organization.

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 the performance measures.
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 usiness Process Performance
easures
 simple process analysis model can help identify your
organization¶s most important workflows. his model
reveals that all work can be viewed in
four sequential stages:
1. m

ùincluding those from both employees & suppliers);
2. 

ùincluding internal operations & support services);
3. 
ùyour organization¶s products, services, and
documentation); and
4. 
  
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n the following graphic ù
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  ) we begin with
inputs that can be 
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component products) or J
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delivered to the   , which transforms them into some final
output which might be a product or service. he goal of the `
is to
create 
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People esign of
Products/ 
aw
aterials
ervices Products (

omponents Production of
ervices
Products 

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ustomer Performance  

equirements of
ervices
esults 
apital elivery of "$
Products/ 

ervices

nput-putput Process
odel `|
  )  a 

arketing nformation apture; ustomer ngagement; irect usiness;

arketing
election; nventory

gt. & Logistics; Plan usiness;
equirements; Product esign / ngineering; evelop Processes;
ardware/
oftware evelopment; Product
aintenance;
anage Process pperations;

ervice evelopment; echnology
aintenance; Provide Personnel
upport;
Production; Production & pperations
gt.
arket Products &
ervices;
ustomer Fulfillment/ elationship;
arketing
anagement; Provide ustomer
ervice;

ervice ustomer Feedback;
upplier
anagement;
anage Products &
ervices;

arketing; nformation
anagement; Provide onsultancy
ervices;

olution ntegration; usiness
anagement; Plan the etwork;
Financial nalysis; uman esources
anagement; pperate the etwork;
Plan ntegration; Leased & apital sset
gt. Provide
upport
ervices;
ccounting; Legal;
anage nformation esource;
uman esources Financial
anagement.
anage Finance;
 nfrastructure Provide echnical &

xamples of ey usiness Processes ``

 
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upport services are activities and operations that
enable your organization¶s core production and
delivery processes.

hey include functions such as finance, software

services, marketing, public relations, information
services, purchasing, legal services, and facilities
management.

xamples for various areas follow.

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 enchmarking
ritical
uccess Factors
M÷  ÷  
÷

 +  well-designed
performance measurement and benchmark system is
essential, but there are other critical success factors:
å
enior management support;
å enchmarking training for the project team;
å Useful information technology systems;
å ultural practices that encourage learning;
å esource dedication - especially in the form of
time, funding, and useful equipment. `·
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MFrom the
trategic Planning nstitute¶s ù
P)
ouncil on enchmarking has developed the
following model:
1. Launch
2. prganize
3. each put
4. ssimilate
5. ct
`ü
werox 12-
tep enchmarking Process
M
 |+

1. dentify what to benchmark;
2. dentify comparative companies;
3. etermine data collection method & collect
data.
M
 `+  
4. etermine current performance gap;
5. Project future performance levels.
M
 ¦+ 
6. ommunicate finding and gain acceptance;
7. stablish functional goals. `*
 he werox 12-
tep enchmarking Process
ùcontinued)

M
 D+  
*. evelop action plans;
9. mplement specific actions & monitor progress;
10. ecalibrate benchmarks.

M
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11. ttain leadership position ;
12. Fully integrate practices into processes.

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Process pwner nvolvement
ponsorship Uncertain
ustomer riven pbjectives morphous pbjectives
Linked to
trategic Plan o
trategic ntegration
est Practices & nablers Performance
etrics pnly
onsider ultural ttributes ³ ard´ ata pnly
isciplined
ethodology rbitrary / asual pproach
Quantum hange ncremental / o hange
lear Project Life ycle eep oing and oing and «..
ntegrated with xisting  la carte Program
Quality fforts

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Mommit required resources to key projects;
MProvide focused training / facilitation to project
participants;
MProactively manage the direction and momentum of
benchmarking within the organization;
Mreate visibility of the benchmarking process;
Mecognize benchmarking team efforts.
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