Chapter 10 BenchmarkingIntroduction To BenchmarkingWhat Is Benchmarking?Benchmarking DefinedReasons to BenchmarkWhat Is “Best Practice”?What Benchmarking Is NOTWhat Benchmarking is NOTSlide 9To Benchmark SuccessfullyTypes of BenchmarkingBenchmarking ProcessSlide 13Benchmarking Process SummaryDeciding What To BenchmarkQuiz ScoresSlide 17Slide 18Approaches to BenchmarkingSlide 20Slide 21Slide 22Slide 23Example of Benchmarking ResultsUnderstanding Current ProcessPlanningStudying OthersLearning the DataSlide 29Using FindingsPitfalls & CriticismsSlide 32SummaryClass ExercisesTEC 5133 - TQSBenchmarking - Chp 10 1Chapter 10BenchmarkingTeam #1: John Boyd, Greg DeYoung, Tusi Marshall and Dave WilsonTEC 5133 - TQSBenchmarking - Chp 10 2Introduction To BenchmarkingIt is a tool that is used by many businessesTo gauge their performance with best-in-class businesses within their own industryThis tool allows for the standardized measurement of business and organizational metricsTo use this comparison with best-in-class business and organizational metricsTEC 5133 - TQSBenchmarking - Chp 10 3What Is Benchmarking?Can yield great benefits in the education of executivesAnd in the realized performance improvements of operations In addition, benchmarking can be used to determine strategic areas of opportunity In general, it is the application of what is learned in benchmarking that delivers the marked and impressive results so often noted The determination of benchmarks allows one to make a direct comparison: any identified gaps are improvement areas.TEC 5133 - TQSBenchmarking - Chp 10 4 Benchmarking Defined "Benchmarking is the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized as industry leaders (Best in Class)"Source: The Xerox CorporationTEC 5133 - TQSBenchmarking - Chp 10 5Reasons to BenchmarkTo identify, understand and implement Best PracticesTo overcome complacencyTo build and reinforce broad commitment to changeTo achieve quantum leaps in improvementTEC 5133 - TQSBenchmarking - Chp 10 6What Is “Best Practice”?Documented strategies and tactics employed by highly admired companies These companies are not "best-in-class" in every area - such a company does not existBut due to the nature of competition and their drive for excellence, the profiled practices have been implemented and honed to help place their practitioners as the most admired, the most profitable, and the keenest competitors in business.TEC 5133 - TQSBenchmarking - Chp 10 7What Benchmarking Is N OTMerely competitor analysis: Benchmarking is best undertaken in a collaborative way. Comparison of league tables: The aim is to learn about the circumstances and processes that underpin superior performance.TEC 5133 - TQSBenchmarking - Chp 10 8What Benchmarking is N OTA quick fix, done once for all timeBenchmarking projects may extend over a number of months and it is vital to repeat them periodically so as not to fall behind as the background environment changes.TEC 5133 - TQSBenchmarking - Chp 10 9What Benchmarking Is N OTCopying or catching up In rapidly changing circumstances, good practices become dated very quickly. Also, the fact that others are doing things differently does not necessarily mean they are better.TEC 5133 - TQSBenchmarking - Chp 10 10To Benchmark SuccessfullyA shared, common vision of the performance improvement goals and objectives Open and committed high level support The commitment of all stakeholders in the process to progress and change Ability to critically examine ONE’S own practices The ability and willingness to co-operate and share information and expertise with othersAble to learn from others’ best practicesFlexibility to implement the necessary changesProcedures to monitor subsequent progressTEC 5133 - TQSBenchmarking - Chp 10 11Types of BenchmarkingInternalExternal (competitors)External (same industry)External (generic)TEC 5133 - TQSBenchmarking - Chp 10 12Benchmarking ProcessIdentify activities and practices to benchmark Collect data from organizations that have recognized accomplishments in the activitySuitable "benchmarkers" may include primary competitors, other divisions in a larger organization, and "world class" performers in a particular area Be prepared to share as much information as you receive from benchmarking partners.TEC 5133 - TQSBenchmarking - Chp 10 13Benchmarking ProcessIntegrate and analyze the data Act on the information collected by implementing features that can be adapted to your own organization Monitor improvements and conduct ongoing benchmarkingTEC 5133 - TQSBenchmarking - Chp 10 14Benchmarking Process SummaryDecide what to benchmarkUnderstand current performancePlanStudy othersLearn from the dataUse the findingsTEC 5133 - TQSBenchmarking - Chp 10 15Deciding What To BenchmarkDiversity in “Best of Class” levelsWhere are you?TEC 5133 - TQSBenchmarking - Chp 10 16Quiz ScoresExcellent! Your company is at the creative vanguard. We're going to do two things right now: buy some of your stock, and see if you have any job openings. TEC 5133 - TQSBenchmarking - Chp 10 17Quiz ScoresNot bad! The firm is probably attracting enough good people and generating enough creative thinking to stay in the game. It sounds like management is at least trying, so maybe you should pitch in and help this crew move up the scale.Get out of Dodge, pardner. The Surgeon general has determined that the company you work for is hazardous to your physical and mental health. TEC 5133 - TQSBenchmarking - Chp 10 18Quiz ScoresNahh....Can't be! Those (d) answers were supposed to be jokes. You know, jokes, like the pointy-haired guy in that comic strip?Deficient – Soon, the board is going to send in a turnaround team. Let’s hope they turn it around in the right direction. Update your resume & don a life jacket.Very good – Your company gets it (or most of it, anyway). You’d have to look long and hard to find a better place to work.TEC 5133 - TQSBenchmarking - Chp 10 19Approaches to BenchmarkingAT&T 12-step Process:Determine who the clients are – who will use the information to improve their processAdvance the clients from the literacy stage to the champion stageTest the environment. Make sure the clients can
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