Benchmarking

Benchmarking

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  1Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS TQM TOOLS BENCHMARKING REASONS TO BENCHMARK PROCESS OF BENCHMARKING PITFALLS AND CRITICISMS OF BENCHMARKING CONCLUSIONS REFERENCES
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  2Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS Benchmarking is a systematic method by which organizations can measure themselves against the best industry practices. Benchmarking is a systematic search for the best practices, innovative ideas, and highly effective operating procedures
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  3Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS REASONS TO BENCHMARK : It is a tool to achieve business and competitive objectives It can inspire managers (and Organizations) to compete It is time and cost effective It constantly scans the external environment to improve the process Potential and useful technological breakthroughs can be located and adopted early
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  4Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS PROCESS OF BENCHMARKING The following six steps contain the core techniques of Benchmarking 1. Decide what to benchmark Benchmarking can be applied to any business or production process The strategy is usually expressed in terms of mission and vision statements Best to begin with the mission and critical factors Choosing the scope of the Benchmarking study Pareto analysis – what process to investigate Cause and Effect diagram – for tracing outputs back 2. Understand current performance Understand and document the current process Those working in the process are the most capable of identifying and correcting problems While documenting, it is important to quantify Care should be taken during accounting information
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  5Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS 3. Plan A benchmarking team should be chosen Organizations to serve as the benchmark need to be identified There are three types of benchmarking a.Internal b.Competitive c.Process 4. Study Others Benchmarking studies look for two types of information How best the processes are practiced Measurable results of these practices Three techniques for conducting the research are Questionnaires Site visits Focus groups
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  6Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS 5.Learn from the data Answering a series of questions like Is there a gap between the organization’s performance and the performance of the best-in- class organizations? What is the gap? How much is it? Why is there a gap? What does the best-in-class do differently that is better? If best-in-class practices were adopted, what would be the resulting improvement? Benchmarking studies can reveal three different outcomes Negative gap Parity Positive gap 6. Using the findings The objective is to close the gap. For this Findings must be communicated to the people within the organization Action plans must be developed to implement new processes Groups that must agree on the change Process owners Upper management
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  7Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS Steps for the development and execution of action plans are 1.Specify tasks 2.Sequence tasks 3.Determine resources needs 4.Establish task schedule 5.Assign responsibility for each task 6.Describe expected results 7.Specify methods for monitoring results
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  8Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS PITFALLS AND CRITICISMS OF BENCHMARKING : Idea of copying others It is not a cure or a business philosophy Some process have to be benchmarked repeatedly It is not a substitute for innovation
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  9Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS CONCLUSION Benchmarking improves performance by identifying and applying best demonstrated practices to operations and sales. Managers compare the performance of their products or processes externally with those of competitors and best-in-class companies, and internally with other operations that perform similar activities in their own firms. The objective of Benchmarking is to find examples of superior performance and understand the processes and practices driving that performance. Companies then improve their performance by tailoring and incorporating these best practices into their own operations—not by imitating, but by innovating.
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  10Prepared by: PURUSHOTHAMAN.R.,M.E.,M.B.A,AP/EEETQM TOOLS REFERENCES: 1. Gilbert, G. (1992). “Quality Improvement in a Defense Organization.” Public Productivity and Management Review, 16(1), 65- 75. 2. Hyde, A. (1992). “The Proverbs of Total Quality Management: Recharting the Path to Quality Improvement in the Public Sector.” Public Productivity and  Management Review, 16(1), 25-37. 3. Martin, L. (1993). “Total Quality Management in the Public Sector,” National  Productivity Review, 10, 195-213. 4. Swiss, J. (1992). “Adapting TQM to Government.” Public Administration  Review, 52, 356-362. 5. Tichey, N. (1983). Managing Strategic Change. New York: John Wiley & Sons. 6. Hill Stephen, 1991. “Why Quality Circles Failed but Total Quality Management Might Succeed.” British Journal of Industrial Relations, 29(4), 541-568. 7. Ishikawa, K, 1985.What Is Total Quality Control? The Japanese Way. Englewood Cliffs, New Jersey, Prentice- Hall. 8. Smith, AK, 1993. “Total Quality Management in the Public Sector.” Quality  Progress, June 1993, 45-48.